Brazil, Guyana, have lion’s share of Latin American oil production

December 24, 2022

“The region’s two exploration hotspots, Brazil and Guyana, will anchor production growth in 2023, and could add 3.6 million bbl/d [barrel per day] between 2023-2027.”

This growth will come from the installation of six new floating production storage and offloading (FPSO) units next year, and 15 more over the following four years. New production from the two emerging countries, among others, will provide some assistance to a global energy market still rattling from the loss of Russian supply, sanctioned after its invasion of Ukraine in early 2022.

Notwithstanding, Latin America will continue to encounter formidable headwinds, such as rising energy costs, despite an abundance of resources due to a high dependency on imports from LNG to refined petroleum products, which will continue to stoke inflation, the article said.

“While Brazil and Guyana will garner the most investor attention and capital spend, other Latin American countries such as Colombia, Mexico and Venezuela could also boost production over the near-term, if above-ground risks mainly related to political uncertainties are kept to a minimum.”

“Guyana continues to ride a wave of successful exploration in its prolific offshore Stabroek Block. There, an Exxon Mobil-led consortium that includes Hess Corp. and China’s CNOOC has found gross recoverable resources estimated at around 11 Bboe [billions of barrels of oil equivalent]. The three companies will continue with exploration efforts in Stabroek while other integrated oil companies (IOCs) explore other blocks. A recently announced offshore bid round for 14 blocks is likely to attract old and new IOCs and national oil companies (NOCs) seeking to replicate Exxon’s feats in Stabroek.”

In Guyana, a “newcomer” to the Latin America oil production and exporting club, Exxon’s first two developments in Stabroek, Liza I and Liza II, are producing around 360,000 bbl/d from the Liza Destiny FPSO (140,000 bbl/d) and Liza Unity FPSO (220,000 bbl/d), respectively. New production forecast for late 2023 will come from incorporation of the 220,000 bbl/d capacity Prosperity FPSO, which corresponds to the third development Payara. Two additional FPSO units (with 250,000 bbl/d capacity each) are forecast for 2025 and 2026 corresponding to the fourth and fifth developments of Yellowtail and Uaru, respectively.

 

 

India interested in long-term purchase of Guyana oil

January 17, 2023

His Excellency Dr. Mohamed Irfaan Ali said the Government of India expressed interest in the long-term purchase of Guyana’s oil, for which a proposal is expected to be submitted to the Government of Guyana for consideration.

President Ali said that government has not agreed to this deal and will first assess the proposal.

“This is nothing new, India has made it very clear that they have an interest in being one of the purchasers of Guyana’s oil…The technical teams will work and see what proposals India would forward.”

Oil ships operating offshore Guyana produced 102 lifts of one million barrels of crude oil and of that number, the government got 13 lifts and has earned more than US$1 billion in revenues from 11 of the 13 lifts.

This year, 136 lifts are expected and Guyana will get 17 of those lifts.

“It is not only in terms of lift, India’s interest is to see how they can work with us on the entire eco system surrounding our oil and gas.”

President Ali recently led a delegation including members of the private sector to India where the two countries discussed areas of cooperation including the oil and gas sector.

He encouraged India and its private sector to participate in Guyana’s auction process of 14 oil blocks.

“We made it clear that we are examining government to government relationship also, and government to government opportunities for exploration and production.”

To exploit Guyana’s oil and gas resources, in December 2022, the government launched the first auction for the development of 14 oil blocks in shallow and deep-water areas.

The bidding round is expected to close by April 14 and new contracts will be awarded by the end of May 2023.

IDB

Latin American exports lose momentum in 2022 and 2023

January 18th 2023 –

The Inter American Development Bank reported that value of Latin America and the Caribbean goods exported during 2022 rose at an estimated 18.8% rate, a downward trend in the region’s commerce figures of some 27,8% when comparing 2021 with 2022.

2022 export performance was mainly explained by higher prices, while volumes lost momentum. The latest edition of Trade Trends Estimates: Latin America and the Caribbean indicates that in the coming months, the export growth rate is expected to slow further in response to the downward trend in commodity prices, the war in Ukraine, restrictive monetary policies to reduce inflation in leading economies and the slowdown in global growth.

”After the recovery in 2021, a series of global shocks have sent exports from Latin America and the Caribbean into a slowdown that will continue into 2023. Reversing this trend will be key to shoring up economic growth in the region,” said Paolo Giordano, Principal Economist at the IDB’s Integration and Trade Sector, who coordinated the publication. The report was prepared by the Sector and its Institute for the Integration of Latin America and the Caribbean (INTAL).

External sales were driven by shipments to the United States, estimated to have grown by 21.3% in 2022. Demand from the rest of the region’s major trading partners slowed dramatically compared to 2021. Sales grew by 2% to PRC, 14% to the European Union, and 25.6% to Latin America and the Caribbean.

In 2022, the prices of most commodities exported by Latin America and the Caribbean climbed. Between January and November 2022, the year-on-year prices of oil (43%), coffee (29.1%), soybeans (13%) and sugar (5.5%) all increased. In contrast, the prices of iron ore and copper fell by 28.9% and 4.9% year-on-year, respectively. The shock caused by the invasion of Ukraine “further increased the prices of LAC’s main export commodities.” However, “in most countries, the uptrend changed direction in the middle of the year in response to slowing global demand, forecasts of low growth, and the appreciation of the US dollar.”

Exports are estimated to have grown by 18.2% in South America in 2022 after increasing by 36% in 2021. The upturn in commodity prices explained much of this performance, which benefited from the dynamism of intraregional trade and was particularly hard hit by the cooling of demand from PRC.

Exports from Mesoamerica increased by an estimated 18.8% year-on-year in 2022 after growing by 19.4% in 2021. Unlike the rest of the region, Mexico experienced a continuous increase in its export growth rate throughout the year due to the rise in volumes shipped to the United States. Although exports from Central America slowed significantly in 2022 in comparison with 2021 (26.6%), they nonetheless grew by 13.6%, boosted by demand from within the region and the United States.

Exports from the Caribbean rose by an estimated 38% in 2022 after growing by 44.4% in 2021. The United States accounted for most of the increase, followed by the European Union. Latin America and the Caribbean’s total imports increased at an estimated rate of 26.3% in 2022, after growing by 37.4% in 2021.

ECLAC

Latin America forecast to expand 1,3% in 2023, after growing 3,7% last year

January 4th 2023

In its annual report Preliminary Overview of the Economies of Latin America and the Caribbean, the UN Economic Commission for Latin America and the Caribbean, (ECLAC), projects that regional growth next year will be a third of the rate forecast for 2022. In a context of external uncertainties and domestic restrictions, the countries of Latin America and the Caribbean will grow by 3.7% in 2022, just over half of the 6.7% rate recorded in 2021. It is estimated that the deceleration in economic growth will intensify in 2023, giving rise to a 1.3% rate.

According to the preliminary report, unveiled by the Executive Secretary of ECLAC, José Manuel Salazar-Xirinachs – the monetary policy responses adopted worldwide in 2022, in a context of rising global inflation, have sparked greater financial volatility and increased risk aversion, and have thereby prompted fewer capital flows to emerging economies, including the region’s economies. Reduction in global inflation expected in 2023 will tend to moderate monetary policy rate hikes by the main central banks.

The document indicates that after dynamism in the first half of 2022, economic activity slowed, reflecting, an end to the rebound effect on the recovery from 2021 and the effects of restrictive monetary policies, greater limitations on fiscal spending, lower levels of consumption and investment and the deterioration of the external context.

The labor market recovery process underway in the first half of 2022 did not allow for eliminating the traditional gaps between men and women exhibited in indicators such as the labor force participation rate and the unemployment rate. An increase in informality has been observed in 2022 along with a decline in real wages.

In the fiscal sphere, although there has been a reduction in the primary deficit, debt levels continue to be high, which means that fiscal space can be expected to continue conditioning the trajectory of public spending. The risk of interest rate hikes, of currency depreciations and greater sovereign risk are seen hampering the financing of government operations in 2023.

One aspect that the report highlights is that changes seen in the trajectory of regional inflation in the second half of 2022, coupled with the deceleration in economic activity that is expected to continue next year, will reduce the pressure on monetary authorities in Latin America and the Caribbean to continue raising monetary policy rates.

ECLAC indicates that the current situation poses challenges for macroeconomic management. On fiscal matters, officials must avoid premature spending adjustments and expand fiscal space by reducing evasion and avoidance, reviewing tax expenditures, carrying out reforms to increase tax collection and the tax structure’s progressivity, and with multilateral support via the mobilization of global liquidity. It is also necessary to make progress on improving the efficiency and effectiveness of public spending to enhance fiscal policy.

In the monetary-financial realm, it is important to diversify the toolbox for facing the current scenario. Along with the monetary policy rate, officials should use macro-prudential and regulatory instruments that would help manage aggregate demand, minimizing the effects on growth and investment.

Finally, the report argues that it is critical to stimulate investment and productivity in order to address social demands, the creation of decent employment, to reduce informality, inequality and poverty, and move forward on climate change adaptation and mitigation. To that end, innovative public policies are needed on productive, financial, trade and social matters and on the care economy, to avoid another lost decade like that observed for the 2014-2023 period.

Venezuela

Bojan Lepic January 09, 2023

Despite assistance from ally Iran, Venezuelan oil exports last year declined due to infrastructure outages, U.S. sanctions and rising competition in its key Asia market

Reuters expects exports to get a lift this year after the United States relaxed oil sanctions by authorizing some partners of SOC PDVSA to resume taking Venezuelan crude. Iran expanded its role in Venezuela last year, sending supplies to boost exports and technicians to repair a refinery. Poor condition of ports, oilfields and refineries and harsh competition from Russia on crude supplies to PRC will limit export gains. PDVSA and its joint ventures exported 616,540 bpd of crude and refined products last year, a 2.5% drop from 2021 and slightly below 2020.

“Despite the increased Iranian help, the decline in net exports results from a combination of production stagnation and the increasing competition of Russian exports in the Chinese black market,” said Francisco Monaldi, a Latin American energy expert at Rice University’s Baker Institute.

The OPEC founder boosted its exports of petroleum coke, methanol and other oil by-products, which helped offset some revenue loss. Shipments of these lower-value products more than tripled to 4.36 million metric tons last year from 2021.

Reuters quoted figures from employee unions and said that PDVSA’s refineries began the new year processing 386,000 bpd of crude, less than 30% of their 1.3 million-bpd installed capacity. Refining shortages due to plant outages and delayed maintenance at year-end left the domestic fuel market with long lines of drivers waiting at gasoline stations.

The new gasoline crisis is emerging even though Venezuela tripled oil imports to 78,170 bpd, mainly from deliveries of crude and condensate from Iran, which helped produce exportable crude grades and motor fuels.

Venezuela’s crude production averaged some 721,000 bpd according to preliminary data for December and OPEC reports. Output rose 13% from the previous year and stood above pandemic levels but remained well below historic averages and fell short of PDVSA 2022 goal of 2 million bpd. Crude oil output is set to rise by about 100,000 bpd this year. Exports could recover if joint ventures can drain millions of barrels in inventories and if PDVSA is can compete more aggressively in Asia.

A U.S. license granted to Chevron to recover output and exports in Venezuela will take effect this year. Eni could also get a cargo of Venezuelan crude this month.

In 2022 Venezuela earned some $6 billion to $7 billion in oil cash after price discounts, shipping costs, fees, swaps and debt repayment. A global appetite for fuel alternatives boosted oil by-products exports, adding millions of dollars last year.

email bojan.lepic@rigzone.com

 

Chevron Expands Venezuelan Crude Sales to Other Oil Refiners

by Bloomberg|Lucia Kassai| January 16, 2023

Chevron Corp. sold a cargo of Venezuelan oil to another US refiner in the first such transaction since sanctions against the OPEC founder nation were eased less than two months ago. Phillips 66 bought half-a-million barrels of Hamaca, a type of sludgy oil, from Chevron. The crude will be processed at the refiner’s Sweeny, Texas, complex about 65 miles (105 kilometers) south of Houston.

Chevron is expanding Venezuelan crude sales beyond its own refining network weeks after US sanctions relief allowed the oil giant to return key managers to the country and resume drilling. Transactions appear to advance President Joe Biden’s dual objectives of re-engagement with the Nicolas Maduro regime and increasing crude supplies available to American fuel makers.

The cargo of Hamaca will be loaded onto the tanker Carina Voyager in Venezuela this month. Phillips 66 was one of the largest buyers of Venezuelan oil prior to the imposition of sanctions about four years ago.

Chevron followed the Phillips 66 deal with an agreement to sell Venezuelan Boscan oil to another US Gulf Coast refiner. Chevron, which first struck oil in Venezuela over a century ago, is set to export at least 1.5 million barrels this month. About half of those barrels will go to Chevron’s Pascagoula refinery in Mississippi.

Production of oil in Venezuela, once the largest supplier of crude to Gulf Coast refiners, dwindled amid US efforts to oust Maduro. Daily output slumped to 656,000 barrels in November from 1.8 million barrels in 2018.

Here is a list of tankers sailing between the US and Venezuela this month:

1. 1. 1. Sealeo, laden with 500,000 barrels of Hamaca crude, is expected to arrive in Pascagoula next week
      2. Kerala, carrying 250,000 barrels of Boscan oil, also is scheduled to arrive in Pascagoula next week
      3. UACC Eagle discharged about 600,000 barrels of US heavy naphtha in Venezuela last week
      4. ICE Fighter arrived in Lake Maracaibo where the Bajo Grande terminal is located
      5. Carina Voyager arrived in Venezuela to load 500,000 barrels of Hamaca oil, bound for Phillips 66 refinery

 

 

Chevron Venezuela activities picking up pace

January 4th 2023

Oil producer Chevron is to send the first shipment of Venezuelan crude oil to a US refinery in quite a while to its Pascagoula, Mississippi, refinery after obtaining a US license in 2022. The 500,000-barrel cargo of Hamaca heavy crude stems from the Petropiar joint venture.
Bahamas-flagged Caribbean Voyager was ready for loading near the PDVSA-run port of Jose.

The UACC Eagle, also chartered by Chevron, arrived in Venezuelan waters with about 500,000 barrels of heavy naphtha to help operate Petropiar’s crude upgrader.

In November 2022, Chevron won a 6-month license to expand its operations in Venezuela to encourage talks between the government of Nicolas Maduro and the political opposition.

Washington had previously authorized Italy’s ENI SPA and Spain’s Repsol SA to recover outstanding debts in Venezuela by taking Venezuelan crude for refining in Europe.

The report further noted that the authorized shipments could slightly boost Venezuela’s crude exports, which were almost unchanged year-on-year last year.

Martin Philipsen of Chevron Venezuela has been appointed as Petropiar’s general manager. The current general manager of US Chevron in Venezuela joined Petropiar on Dec. 8. It would be the first time that a Venezuelan official is not in charge of the management of an oil company as a whole since Venezuelan law establishes that PDVSA must maintain a majority shareholding.

Philipsen, an Engineering graduate from Boschveld University in Eindhoven, The Netherlands, holds a Master’s degree in Production and Energy Engineering from the Eindhoven University of Technology and another in Economics and Business Management from the French Petroleum Institute. In December 2022, Venezuela’s Petroleum Ministry, PDVSA and Chevron Venezuela signed four contracts to start operations in joint ventures: Petroboscan, Petroindependiente, Petropiar, and Petroindependencia after the US Treasury Department approved a new license allowing to Chevron to expand its operations.

Chevron CEO and president Mike Wirth on Jan. 4 said that the oil company is the only US company with a presence in Venezuela. Although the license alleviates sanctions, time was still needed to increase production.

“The Gulf Coast refineries were actually designed to process crude coming out of Venezuela. So we will see a flow of oil into the U.S. and get some cash. They owe us some money for loans and things we’ve done over the years there. So this is a first step to potentially be followed by others.”

Others citing the www.argusmedia.com website, report Chevron had already started loading Venezuelan oil on the charterer vessel Beauty One, although there was no confirmation that the US company was behind the deal. The Beauty One tanker had arrived in Bajo Grande on Dec. 21, Argus reported. However, it clarified that “ship tracking data does not confirm that Chevron is the charterer of the Beauty One.”

Argus also said that the UACC Eagle was due in José on Jan. 5 loaded with 620,400 barrels of naphtha according to Vortexa data. It “is a key diluent for extra-heavy Orinoco crude. Iran has been providing naphtha to Venezuela as part of an oil cooperation agreement.”

Chevron operated on a limited basis in Venezuela due to former President Donald Trump’s sanctions. Under Joseph Biden, things changed but it was not until last November that it was made official when Chevron was greenlighted to partially resume activities. Venezuela’s Petroleum Minister Tareck El Aissami (accused of drug trafficking, with a reward in the US for his capture), shook hands with US envoys.

At the same time, Eni and Repsol expect more concessions, according to the Venezuelan Oil Chamber (CPV), with Europe in need of energy in the absence of Russian supplies. President Maduro promised two years ago that PDVSA’s output would reach 1.5 million barrels per day (bpds). However, as of November 2022, it stood barely at 693,000 bpds, according to the Organization of Petroleum Exporting Countries (OPEC).

CEO Defends Chevron Profits

by Bloomberg|Kevin Crowley|, January 04, 2023

The 10 top-performing stocks in the S&P 500 Index last year were energy companies.
Chevron Chief Executive Officer Mike Wirth rejected claims by President Joe Biden that Big Oil’s record profits are being made on the back of the war in Ukraine and at the expense of the American people.

The industry’s highest-ever cash haul should not be viewed in isolation because only three years ago it was “losing billions of dollars as prices plummeted,” Wirth said on Bloomberg Television.

“Through the cycle, it’s an industry that generates 10%-ish returns on capital employed, which is I think, by the standards of many other industries, a pretty modest return.”

The 10 top-performing stocks in the S&P 500 Index last year were energy companies, with traditional oil and gas producers dominating the list, despite a chorus of investors, political leaders and civil society groups calling for a transition to clean energy. Chevron, the second-largest US oil company, is on course to report $37 billion in profit for 2022, 40% higher than its previous record set in 2011, according to  Bloomberg. The stock gained 53% last year, compared with a 19% drop in the overall index.

Biden spent much of last year criticizing the domestic oil industry and in October accused it of reaping a “windfall of war.” Democratic allies accused the industry of gouging consumers as gasoline prices reached a record high in 2022.

“I disagree with that characterization,” Wirth said, adding that the price of oil and gas are set by the market, not producers.

“As prices get high and it gets less affordable, you find people that are upset. And part of that is because we really haven’t necessarily been able to find the right balance” between energy affordability, energy security, and protecting the environment. “We need to have a balanced approach to energy.”

His comments reflect a growing frustration in the oil and gas industry that politicians, investors and consumers have focused on forcing large companies to reduce carbon emissions while taking affordable and reliable energy for granted. As gasoline prices soared to a nationwide average of $5 a gallon last summer, Wirth spent far more time than expected in Washington D.C. explaining the unintended consequences of policies being considered by the Biden administration.

“I do have to go to Washington. They’re detailed discussions. And we need to help regulators understand the potential consequences of some of the things they consider.”

Wirth was born in Los Alamos, New Mexico, where his father worked in the National Laboratory. He studied chemical engineering at the University of Colorado in Boulder before joining Standard Oil of California, which became Chevron, as a design engineer. His first roles were in projects that never saw the light of day: oil shale before fracking took off, a facility in California to bring oil from offshore that was sold at a huge loss, and a project in Africa that never happened because of a civil war.

“I began by specializing in spectacularly unsuccessful projects. And at some point, I said, “This doesn’t look like a great career path.”

Wirth moved into Chevron’s marketing business and progressed through the ranks to lead the company’s refining division and eventually taking over the top job from John Watson in 2018. Wirth lives just a few miles from Watson and his two other CEO predecessors and the group gets together for lunch “regularly,” he said.

“They’ve lived through wars, the fall of the Soviet Union, terrorist attacks, financial crises. They’ve seen oil markets go through gyrations. They’ve dealt with geopolitical surprises. And so their advice is really valuable. During COVID, the first thing I did was call each one of them and say, “What lessons did you learn during the crises you faced?”

Can the industry afford a windfall profits tax?

A windfall profits tax is not going to encourage more supply. It’s not likely to reduce prices; in fact, it could do quite the opposite. President Carter tried a windfall profits tax in 1980. It was rescinded several years later, had collected a lot less revenue than was expected and didn’t result in more investment. So normally, if you want less of something, you tend to put more taxes on it. If we want more energy production, we want more supply to bring prices down, putting taxes on energy production’s probably not a good idea.

Why do people love energy but they don’t love energy companies?

We’re a big company. The numbers are big. Sometimes big isn’t popular, big energy, big government, big tech. We need to have a balanced approach to energy. And that means we have to focus on affordability, because affordable energy is really essential for economic prosperity. Reliable supply for national security, because energy security and national security are linked. And then protecting the environment. And I think as prices get high and it gets less affordable, you find people that are upset. Part of that is because we really haven’t necessarily been able to find the right balance among those three.

What are you doing, to transition yourself to a renewable company?

We’re focused on leveraging our strengths to deliver lower carbon energy to a growing world. We’re reducing the emissions associated with oil and gas that the world needs today, needs very, very desperately. And at the same time, we’re building inherently lower carbon energy businesses for tomorrow. So things like renewable fuels, hydrogen, carbon capture and storage, geothermal are all technologies we’re investing in.

Is the war in Ukraine why oil companies are making big profits?

The war and the associated actions have definitely had an impact on energy markets. But if you step back and look at the the broader context, in 2020 we saw demand collapse with the pandemic when the world really locked down. Companies in our industry had to shut in wells and stop producing because there was no place to store the oil that wasn’t needed by the market. So investment levels came down. As the economy recovered, post the pandemic, we got vaccines, demand returned. The industry’s been struggling to keep up with the rate of growth, once again.

Are you resuming production in Venezuela?

We’re the last U.S. company that has any presence there. The sanctions were somewhat relieved but at the margin for a period of six months that will allow certain activities, primarily some crude, to flow from Venezuela to the U.S., which isn’t happening today. Gulf Coast refineries were actually designed to run the crude that comes out of Venezuela. So we’ll see some oil flow to the U.S. We’ll get a little bit of cash. We’re owed some money for loans and things that we’ve made over the years down there. So this is a first step to potentially be followed by others.

There’s a perception that when oil prices come down, gasoline prices don’t come down as fast. Is there any truth to that?

Independent businessmen will look at what they believe their future resupply costs to be. And if they think it might be higher, they tend to hold their street prices until they’re sure that their next load of fuel might be a lower cost to them, and then you start to see the prices come down.

When the President says ‘energy companies are gouging the American people’ I assume you don’t like it but you probably just accept it?

I disagree with that characterization. I don’t think it’s accurate. We’re an industry of price takers, not price makers. These are global commodity markets and prices go up, prices come down. Just two years ago, we were losing billions of dollars as prices plummeted. And so, through the cycle, it’s an industry that generates kinda 10%-ish returns on capital employed, which is, I think, by the standards of many other industries, a pretty modest return.

Kevin Crowley in Houston at kcrowley1@bloomberg.net

 

 

U.S. no longer recognizes Guaidó as Venezuela’s president

Dave Lawler, author of Axios World

Following the lead of Venezuela’s opposition lawmakers, the U.S. no longer considers Juan Guaidó as the country’s legitimate leader after the opposition-controlled National Assembly voted to dissolve the interim government.

Guaidó never held the levers of power in Caracas and his support with the public and within the fractured opposition had been slipping for years. U.S. policy and, crucially, the opposition’s claim to billions in Venezuelan assets overseas, were still based around the premise of Guaidó’s  legitimacy.

Opposition lawmakers voted 72-29 to pull the plug on the “interim presidency,” four years after the Trump administration and dozens of other countries backed Guaidó’s bid to displace Nicolás Maduro. Guaidó’s allies warned that the move would compromise the opposition’s international legitimacy and risk the overseas assets falling into Maduro’s hands. Others in the opposition claimed Guaidó’s government failed to produce democratic elections and was never intended to be permanent.

The step put the U.S. in an awkward position. While the Biden administration has softened its approach to Maduro and promoted dialogue with the regime, it had continued to treat Guaidó as its primary interlocutor — even as governments in Europe and Latin America stopped recognizing him. After the vote, U.S.officials said the U.S. recognized the National Assembly elected in 2015, which Guaidó had led, as Venezuela’s “only remaining democratically elected institution.”

A senior State Department official said “The 2015 National Assembly recognizes Guaidó as one of its members, not as Interim President, as the Interim Government no longer exists. So we’re following their lead. The National Assembly is currently making internal decisions regarding its own leadership, so we’re going to wait and see how that plays out.”

The U.S. will continue to communicate with Guaidó and other “likeminded” members of the opposition.

Guaidó’s presidency became a “self-perpetuating thesis,” said an analyst in Caracas. His mission to quickly replace Maduro had failed, he lost public confidence, and he lacked the support of three of the four major opposition factions. International backing and control of some government assets seemed to make him immovable. Finally, opposition lawmakers decided to “chop off the afflicted limb” and accept the “painful” consequences. It remains to be seen whether the dissolution of the interim government will have any bearing on court cases regarding gold reserves held in the U.K. or control of oil refiner Citgo.

The National Assembly, which convenes over Zoom because much of the opposition is now in exile, is expected to select its new leadership this week. While Guaidó derived his claim to the presidency on the assembly leader’s place in the presidential line of succession, that model has now been scrapped. The opposition remains divided and appears unlikely to rally around one single figure in the near term. There may be no clear opposition leader until candidates are selected for the presidential elections planned for 2024.

Talks between Maduro and representatives of the opposition are likely to continue, but Maduro has thus far “shown no willingness at any point to grant the kinds of concessions that might lead to free and fair elections.”

 

 

 

Venezuela closer to Mercosur and Argentina

December 27th 2022

Venezuela’s return to Mercosur, the resumption of flights between Buenos Aires and Caracas and an invitation to President Nicolás Maduro to attend the CELAC summit in Buenos Aires next month are some of the signs of the Argentine government’s rapprochement with Chavismo. In addition, a rise in bilateral trade of up to 60% is expected.

Maduro is expected to attend because by then Brazil will be represented by Luiz Inácio Lula Da Silva, who is said to favor Venezuela’s return to the bloc from which it was suspended in 2016 for failing to abide by the group’s democratic standards. Lula announced the resumption of diplomatic ties with Venezuela, interrupted by the administration of the outgoing Jair Bolsonaro. Since 2015 under then-President Mauricio Macri, Argentina lowered its diplomatic ties with Caracas to a chargé d’affaires until Oscar Laborde was again appointed this year as the country’s ambassador.

Also on the guests’ list for the Summit are Cuba’s Miguel Díaz Canel and Nicaragua’s Daniel Ortega.

However, Maduro has close ties with Vice President Cristina Fernández de Kirchner who in some ways is an opponent to President Alberto Fernández’s hopes for reelection. Maduro has been critical of Alberto Fernández for the seizure of the Emtrasur freighter aircraft and even called him a “puppet” of the [US] empire.

Aerolineas Argentinas stopped serving Caracas in August 2017 and the Venezuelan state-owned Conviasa resumed flights in early 2022 but lifted the route after the Emtrasur scandal a few months later. Privately-owned carriers of both countries are expected to resume air connectivity shortly.

After trade between the two countries became almost non-existent following the so-called “parallel embassy” scandal involving the Ministry of Planning, the revived Venezuelan-Argentine Chamber of Commerce (Cavernarg) estimates that this year exchanges will amount to around US$ 300 million.

“In the new turn in political and economic relations that is taking place between Venezuela and Argentina, the private sector will play a central role,” said Laborde, who is now seeking to focus on an economic agenda with a regime that has also embarked on a dialogue with the United States, another with Europe, and other economic reforms.

Laborde has already organized several trade missions to Caracas with the participation of companies such as Rizobacter, Tedeschi, Chemtec, Hersems, and Bernardín, involved in investment projects with Argentine capital and in strategic alliance with Venezuelan private companies for the development of agricultural production, with the transfer of knowledge, state-of-the-art technology inputs and updating of the production machinery from Argentina.

The second edition attended by the companies Biogénesis Bagó, La Lechera Santa Clara, and the pork producer ISOWEAN S.A., focused on the development of pork production in Venezuela. In order to start a large-scale pork industry, inputs and vaccines will be required, which would be exported from Argentina within the framework of a technology transfer program that would culminate with the change of Venezuela’s status to a country free of foot-and-mouth disease with vaccination.

Then there is another program known as “Venezuela and Argentina Hermanadas por la Producción” (“Venezuela and Argentina Twinning for Production”), through which a delegation of Venezuelan companies travelled, led by the Venezuelan-Argentine Chamber of Commerce, presided by businessman Benjamin Tripier, focused on the food, medicine, laboratories, technology, coffee, financial markets, and stock exchange, among others.

(Source: Clarín)

Cuba

MEGAN JANETSKY
January 4, 2023

HAVANA (AP) — Grappling with the biggest influx of Cuban migrants in decades, the United States reopened their long-closed legal pathway by resuming all visa services at its embassy in Havana.

Hundreds of thousands of Cubans desperate to leave the flailing economy and reunite with family in the U.S. but unable to get visas in their country were forced to fly to Central America and make tortuous journeys north, or navigate the Florida Straits in rickety vessels. The number of Cubans detained on the U.S. southern border is now second only to the number of Mexicans, according to Customs and Border Protection figures.

Hundreds gathered outside the embassy for visa appointments or waited outside for loved ones.

“This could help reduce illegal immigration, and make it so people can go to the United States in a safer way,” said a 59-year-old technician once deported from Panama, one of the Central American jumping-off points to U.S.-bound migrants in recent years.

Visa services were fully restarting for the first time since a virtual shutdown prompted by health incidents among staff slashed the American presence in Havana in 2017. The embassy gradually began to expand such services and diplomatic staffing in a limited capacity in May. Now the U.S. could give at least 20,000 visas a year.

The U.S. embassy said “the United States is working to ensure safe, legal, and orderly migration.”

In December, U.S. authorities reported stopping Cubans 34,675 times along the Mexico border in November, up from 28,848 times in October.

Growing migration is due to economic problems, discontent among Cubans and the relative ease with which Cuban migrants can obtain legal status in the U.S., another hangover from the Cold War.

Cubans travel fewer than 100 miles by sea to Florida, often arriving in precariously constructed boats packed with migrants. Recently, arrival of migrants by boat in the Florida Keys this week prompted temporary shutdown of Dry Tortugas National Park.

Full resumption of visa work at the embassy comes after a series of migration talks and visits by U.S. officials to Havana in recent months.

Recent small steps are a far cry from relations under President Barack Obama, who eased some decades-long sanctions during his time in office and made an historic visit to the island in 2016. But visa and consular services were closed on the island in 2017 after embassy staff were afflicted in a series of health incidents that remain publicly unexplained. Under President Joe Biden, the U.S. has eased some restrictions on remittances and family travel from Miami to Cuba but has fallen short of hopes that a Biden presidency would return the island to memories from the Obama era.

Restrictions on tourist travel to Cuba, and the imports and exports of many goods, remain in place.

Also kindling tensions has been the Cuban government’s harsh treatment of participants in the island’s 2021 protests, including hefty prison sentences of minors, a constant point of criticism by the Biden administration.

Cuban officials express optimism about talks with the U.S. and steps to reopen visa services. Cuban Deputy Foreign Affairs Minister Carlos Fernández de Cossío Domínguez said in November that ensuring migration through safe and legal pathways is a “mutual objective” by both countries.

He also blamed the flight of tens of thousands from the island on U.S. sanctions, saying that “there’s no doubt that a policy meant to depress the living standards of a population is a direct driver of migration.”

 

 

Colombia/Ecuador

Gran Tierra Energy operational and financial update

09 Jan 2023

Gran Tierra Met Production Guidance with 2022 Total Company Average Production of Approximately 30,800 BOPD

• Fourth Quarter 2022 Total Company Average Production of Approximately 32,600 BOPD, an Increase of 10% from Fourth Quarter 2021
• Strong Exit with Total Company Average Production During December 2022 of Approximately 33,800 BOPD
• Moqueta Development Campaign Underway with Second Development Well Spud
  First Moqueta Development Well Yielding Encouraging Results
• Bought Back 23 Million Gran Tierra Shares of Common Stock During 2022

Gran Tierra Energy announced an operational and financial update. All dollar amounts are in United States dollars, and production amounts are on an average working interest before royalties (‘WI’) basis unless otherwise indicated. Per barrel and bbl of oil per day amounts are based on WI sales before royalties.

Message to Shareholders

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: ‘We are excited to announce that our 2022 total Company average production was approx. 30,800 BOPD which was within our guidance despite several social disruptions and a delay in our Moqueta drilling program.

Our Moqueta development campaign is well underway with two of the five planned wells having been spud thus far. The initial production results of the first well are encouraging with a stable average rate of 1,312 BOPD. We are very excited for what 2023 holds for the Company and expect to build off the momentum from the strong finish to 2022.’

Operations Update:

Production

• During fourth quarter 2022, Gran Tierra’s total average production was approximately 32,600 BOPD.
• December 2022 total Company average production was approximately 33,800 BOPD.
• Gran Tierra’s total average production for the full year 2022 was approximately 30,800 BOPD which is within the Company’s prescribed guidance.

Colombia Development:

Moqueta Development Campaign:

• Testing began on the first Moqueta well which was spud on November 28, 2022.
• From December 23, 2022, to January 9, 2022, the Moqueta-24 well has been producing on a jet pump at a stable average rate of 1,312 BOPD (28-degree API gravity) and 193 bbl of water (‘BWPD’) with a gas-oil ratio of 170 standard cubic feet per stock tank bbl.
• On January 3, 2023, the Company spud its second development well in the Moqueta field. This well is expected to reach its planned total depth by mid-January 2023.

Acordionero Development:

• Waterflood success at Acordionero resulted in December 2022 total Company average production for this field of approximately 17,800 BOPD, the highest level since the second quarter of 2019.
• Water injection at Acordionero reached a new record of over 60,000 BWPD in December 2022.

Suroriente Development:

• As a result of the successful increase in water injection, expansion of facilities, and minimal disruptions, the Suroriente Block produced an average of 8,700 BOPD gross (4,500 BOPD WI) in the fourth quarter of 2022, the highest level since the second quarter of 2015 despite not drilling a well since the first quarter of 2018.

Shareholder Returns:

• Share Buybacks: Pursuant to Gran Tierra’s current normal course issuer bid, Gran Tierra purchased approximately 23 million shares during 2022, representing about 6.2% of shares outstanding as of June 30, 2022.
  Debt Repayment:
• As part of Gran Tierra’s focus on significant debt reduction, the Company reduced its total debt by $87.6 million in 2022 and by a further $122.5 million in 2021, for a reduction of total debt of $210.1 million over the past two fiscal years.

Corporate Presentation:

Gran Tierra’s Corporate Presentation is available on website www.grantierra.com.

Source: Gran Tierra Energy

 

 

Petrobras – CNOOC Deal For Natural Gas Flow And Processing

by Bojan Lepic, December 29, 2022

Brazilian state-owned oil and gas major Petrobras signed a contract for the integrated natural gas processing system (SIP) with PRC SOC CNOOC Petroleum Brasil.

Petrobras, together with Petrogal Brasil, Repsol Sinopec, and Shell – partners in the Santos Basin pre-salt offshore gas pipelines – concluded the process of CNOOC adhesion to the contracts regarding the integrated natural gas flow system in the Santos Basin.

With the signing of these contracts, CNOOC will be able to transport the natural gas from the Búzios field, located in the pre-salt of the Santos Basin, through any of the export routes and process it in the plants owned by Petrobras, enabling direct service to the natural gas market by CNOOC from January 1, 2023.

This is another step by Petrobras in building an open, competitive, and sustainable natural gas market and is part of the set of commitments assumed with the Administrative Council for Economic Defense in July 2019.

The Santos Basin natural gas flow system comprises Routes 1, 2, and 3 of the Santos Basin pre-salt pole and the SIP includes the processing plants connected to the Santos Basin flow system, owned by Petrobras, located in Caraguatatuba, São Paulo, Cabiúnas and Itaboraí.

In addition to Santos Basin flow system and the SIP, since 2022, Petrobras also shares the Natural Gas Flow System of Guamaré (SEG Guamaré) and the natural gas processing plant at UPGN Guamaré with Potiguar E&P, a subsidiary of PetroReconcavo.

bojan.lepic@rigzone.com

 

 

Exxon aims to block EU windfall tax on oil companies

By Euronews with Reuters • 28/12/2022

Exxon Mobil is suing the European Union in an attempt to force the bloc to scrap its new windfall tax on oil companies. The US oil giant argues Brussels has gone beyond its legal authority by imposing the levy.

Oil companies posted record profits this year, benefiting from soaring energy prices that helped spark a cost of living crisis across Europe. The windfall tax on profits is “counter-productive,” discourages investment and undermines investor confidence,  Exxon spokesperson Casey Norton said.

He warned that the oil company will factor the tax into future decisions on whether to channel multi-billion-euro investments into Europe’s energy supply and transition. “Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Norton said.

The Financial Times first reported the lawsuit

 

 

Africa Gas investments worth $245 billion risk becoming stranded assets

JANUARY 3, 2023, BY MELISA CAVCIC

Planned investments in gas infrastructure amounting to a massive $245 billion are in the pipeline across Africa in a bid to tackle Europe’s energy woes, due to the Ukraine crisis,

However, Global Energy Monitor reports these are in danger of turning into stranded assets, as they are designed as a short-term solution to Europe’s energy crisis.

This report outlines that planned investments across Africa, totalling $245 billion, for liquified natural gas (LNG) terminals, gas pipelines and power stations represent “an enormous stranded asset risk,” as much of this gas is intended to cushion and solve Europe’s short-term energy crisis, resulting from Russia’s invasion of Ukraine, rather than being used for domestic consumption.

Source: Don’t Gas Africa

“Planned investment in gas pipeline and LNG export infrastructure competes with domestic demand for gas and much needed renewable energy investment for Africa to realise universal access to clean, affordable, and reliable energy,” as highlighted in the Global Energy Monitor report.

Africa Gas Tracker’s data shows investments in planned LNG export terminals dwarf money for gas plants to power Africa with estimated capital expenditure for in-development LNG terminals being $103 billion, 92 per cent of which would be for LNG export terminals.

This is expected to increase the region’s 79.3 million tonnes per annum (mtpa) of LNG export capacity by 111 per cent while doing little to improve electrification on the continent, says the report.

While the planned gas plant buildout in Africa would require $62 billion in investment, only $9.7 billion is attributed to projects under construction, while $52.3 billion is attributed to proposed projects.

In addition, out of 64.1 GW of gas power plant capacity in development, only 10.5 GW is under construction, 17.3 GW is in pre-construction and 36.4 GW has been announced.

While Nigeria and South Africa have 22.5 GW and 16.6 GW of in-development gas plants, respectively, and both are gas-producing countries, each faces inadequate installed electricity generation capacity, underlined the report.

As much of the continent’s gas pipeline buildout has not yet secured investment, the planned gas pipeline buildup in Africa would require $89 billion in investment. However, only $4 billion is attributed to projects under construction, while $85 billion is attributed to proposed projects.

Global Gas Plant Tracker; Courtesy of Global Energy Monitor

Even though Africa has an estimated 23,932 km of gas pipelines in development, most projects remain in the proposal stage, with only 1,872 km currently under construction.

In line with this, South Africa and Mozambique lead in proposed gas pipelines, with 4,792 km and 4,352 km, respectively.

Christine Juta, Project Manager for the Africa Gas Tracker, remarked: “Investments in gas pipelines and LNG export projects compete with Africa’s need to achieve universal access to clean energy and meet domestic demand for gas. Without long-term financing and off-take agreements, African countries risk banking on what could well be a short-lived appetite for gas.”

According to the Africa Gas Tracker, 65 GW of gas plants, 75 mtpa LNG terminal capacity and 22,600 km of gas pipelines are identified to be in development. The report concludes that Europe’s reduced reliance on Russian gas has led to a renewed interest in African gas.

Global Gas Infrastructure Tracker; Source: Global Energy Monitor

“However, planned projects still face financing challenges, with many of them yet to begin construction. Without long-term financing and off-take agreements, these assets are likely to become stranded in the very near future once the European energy crisis abates,” as underscored by the findings within the report.

This report comes after campaigners called for an end to gas expansion in Africa during COP27. These calls used a report, analysing Rystad Energy data, which was published by environmental research group Urgewald, in partnership with multiple organisations across Africa and Europe, to call out those who have pushed the total capital expenditures (capex) for oil and gas exploration in Africa from $3.4 billion in 2020 to $5.1 billion in 2022.

Jan 4, 2023

 

 

PRC to boost pipeline imports of Russian gas by 47%

Throughput via the Russia-China pipeline will be ramped up to 22 billion cubic metres this year

4 January 2023
By Xu Yihe in Houston

PRC is ready to increase gas imports from Russia by 47% in 2023, after Russian gas giant Gazprom started production from the Kovykta field, its second major asset in East Siberia, in addition to the Chayanda field.

Song Fei, deputy chief engineer of PipeChina, which operates the Russia-China gas pipeline, said his company would take up to 22 billion cubic metres of pipeline gas import from Russia this year, up from 15 Bcm in 2022. Gas throughput via the pipeline has been ramped up to 61 million cubic metres per day as of 1 January compared to last year’s average of 50 MMcmd.

 

Davos 2023

Big Oil in sights of climate activist protests

Maha El Dahan, DAVOS, Switzerland, Jan 16 (Reuters)

 

“We are demanding concrete and real climate action,” said Nicolas Siegrist, the 26-year-old organiser of the protest who also heads the Young Socialists party in Switzerland.

“They will be in the same room with state leaders and they will push for their interests,” Siegrist said of the involvement of energy companies during a demonstration attended by several hundred people .

The oil and gas industry has said that it needs to be part of the energy transition as fossil fuels will continue to play a major role in the world’s energy mix as countries shift to low carbon economies.

As the annual meeting of global business and political leaders opened, a social media campaign added to the pressure on oil and gas companies, by promoting a “cease and desist” notice sponsored by climate activists Thunberg, Vanessa Nakate and Luisa Neubauer, through the non-profit website Avaaz.

It demands energy company CEOs “immediately stop opening any new oil, gas, or coal extraction sites, and stop blocking the clean energy transition we all so urgently need”, and threatens legal action and more protests if they fail to comply.

The campaign,signed by more than 660,000 people, had almost 200,000 shares.

Sumant Sinha, who heads one of India’s largest renewable energy firms, said it would be good to include big oil companies in the transition debate as they have a vital role to play.

“If oil people are part of these conversations to the extent that they are also committing to change then by all means. It is better to get them inside the tent than to have them outside the tent,” Sinha, chairman and CEO of ReNew Power, told Reuters, saying that inclusion should not lead to “sabotage”.

Rising interest rates have made it harder for renewable energy developments to attract financing, giving traditional players with deep pockets a competitive advantage.

As delegates began to arrive in Davos, Debt for Climate activists protested at a private airport in eastern Switzerland, which they said would be used by some WEF attendees, and issued a statement calling for foreign debts of poorer countries to be cancelled in order to accelerate the global energy transition.

 

Equinor

Norwegian company’ shows interest in UK assets owned by CNOOC Ltd.

 

Rosebank oilfield

Labour turns up the heat, urging the new UK business secretary to close Rosebank before it begins production

 

Shell expects $2bn hit from UK and EU windfall tax

Windfall tax measures in the UK and EU are expected to see Shell (LON: SHEL) take on a $2bn liability during Q4, the energy giant has said.

 

 

Book Review :

“Unsettled ”  by Steven Koonin. is written in a measured, sensible, style and teases out all the difficulties and inconsistencies in the ACC hypothesis and analyses all the exaggerations and misinterpretations that characterise the path to an exceedingly unlikely climate crisis and catastrophe. Especially, by analysing the statistical history of extreme weather events, he shows that their attribution to man-made climate change is untenable.

Koonin is a very distinguished physicist; this book should be read by every climatologist and all those who are concerned about climate change but do not have the science background to decide for themselves. They will find that the science is neither settled nor believed by a consensus.

Prof John Dewey