UK Stands as Latin America’s Oldest Friend
May 23rd 2023
James Cleverly, United Kingdom Foreign Minister, delivered a significant speech in Santiago de Chile, outlining the U K vision for its future relations with Latin America. Against the backdrop of the bicentennial celebration of the UK-Latin America relationship, Cleverly expressed pride in the UK’s historical support for the region’s struggle for independence two centuries ago, positioning the UK as “the oldest friend of the region.”
At the Gabriela Mistral Cultural Center, Cleverly addressed young leaders, emphasizing the shared values between the UK and Latin America. Respect for sovereignty, territorial integrity, self-determination, human rights, democracy, the rule of law, and freedom were not only UK values but also values cherished by Latin American nations.
The United Kingdom played a pivotal role in supporting the independence struggles of Latin American nations two centuries ago and is “the region’s oldest friend.”
“The political tectonic plates are shifting once again,” stated the Secretary of State, highlighting the importance of this speech aimed at young leaders to emphasize the mutual values that unite Latin America and the United Kingdom.
“Our position is clear. Respect for sovereignty, territorial integrity, self-determination, and human rights, along with democracy, the rule of law, freedom, and liberty, must prevail. We know that these are also your values.”
The Foreign Secretary highlighted the partnership in addressing global issues such as climate change, defense of democracy and human rights, and ensuring free and open supply chains for critical minerals.
“We must have ambition for our future relationship. Not only because of the historic bonds of friendship that have united us for over 200 years, but also because we cherish the same fundamental values that inspired the creation of this international order. It will only evolve, survive, and prosper with the support and unwavering commitment of this great region.”
He urged greater representation of Latin American countries in multinational organizations such as the UN, including a permanent seat for Brazil on the Security Council, stating, “The demographic and economic weight [of Latin America] gives it a fundamental role in determining whether the international order will endure. But the multilateral institutions of our world need reform, particularly to give more voice and influence to Latin America.”
With a population of 660 million people and a combined GDP of over six trillion dollars, Latin America represents a market with immense potential for the United Kingdom. Mexico, Chile, and Peru are among the countries that the UK will join in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will boost British jobs, growth, and influence in the region. To underscore the importance of engagement with Latin America, he highlighted the commercial and investment opportunities arising from UK accession to the CPTPP:
“The total value of imports and exports increased by 45.4% last year to over £40 billion. However, considering that Latin America represents only 2.1% of UK imports and 2.6% of UK exports worldwide, I recognize that there is much more to be done in terms of trade and investment.”
This event marks the first visit by a UK Foreign Minister to South America since 2018 when then-British Chancellor Boris Johnson visited Argentina and Peru. It reflects one of the UK’s foreign policy objectives of maintaining historical friendships while forging new relationships beyond established alliances. In addition to Chile and Colombia, Cleverly will also travel to Brazil. The speech in Santiago builds upon the UK commitment to deepen connections and engagements in Asia, Africa, and Latin America, as stated in December 12, 2022. The UK’s global impact in future will depend on forging a much broader range of global partnerships.
Foreign Secretary’s speech :
“….It’s an honour to be here. Our setting has so much resonance for Chile’s recent political history. Constructed by volunteers during the Allende presidency. Requisitioned by the Ministry of Defence in the Pinochet era. Re-born as a Cultural Centre, it now bears the name of one of two Chilean Nobel prize winners, Gabriela Mistral.
Two hundred years ago, a fierce revolutionary struggle was raging on both sides of the Atlantic. A battle of ideas in which liberty, self-determination and representative government set themselves against absolutism and autocracy.
It reached its dramatic climax here. In Latin America. Under the inspirational leadership of figures like Simon Bolivar, Bernardo O’Higgins, José de San Martín or Miguel Hidalgo.
Latin America’s struggle for independence was surely one of the most uplifting episodes of the momentous revolutionary era that laid the foundations of the modern world. A tale of hardship, perseverance, exile and betrayal. Of stunning victories and extraordinary sacrifice. Of inspiration, leadership and unity.
From the very beginning, my great and gifted predecessor, George Canning, foresaw that Latin America would hold the balance of power in world politics.
And this is also the continent that gave birth to the extraordinary genre that is magical realism. And imagine if I were giving this speech in the magical realist tradition. I would tell you that George Canning appeared to me in my dreams, taking the form of a mighty, powerful jaguar, conveying a message for me to pass to you.
Although actually, that didn’t happen. But Canning’s wisdom about ‘the New World being called into existence to redress the balance of the Old’ rings as true today as when he said it in 1826.
The allure and romance of this continent drew many others, including thousands of battle-hardened veterans who volunteered in the British Legions. Men like James Rooke, after whom a battalion is named in the Colombian army. Or Admiral Thomas Cochrane, the man Napoleon dubbed ‘the Sea Wolf’. And who established both the first Chilean Naval Squadron and the forebear of today’s Brazilian Navy. Or Martin Guisse, who founded the Peruvian Navy. I am delighted that warships in Latin American navies bear their names to this day.
I am also proud of the role the United Kingdom played in supporting the struggle for Latin America’s independence, and in laying the foundations for your subsequent success. British engineers and British finance helped build the railways and the ports that connected Latin America to the markets across the world.
Two hundred years on from that revolutionary period, the tectonic plates of world politics are shifting once again. Today I want to talk about values, climate and the shared bonds between our peoples. We are living through the beginning of a new era of geopolitical competition. Alongside these trends, a battle of ideas is taking place once again. This time, its focus is on the nature and the future of the international order.
Our position is clear. Respect for sovereignty, respect for territorial integrity, respect for self-determination and human rights must prevail. Alongside democracy, the rule of law, liberty and freedom. Free and fair elections are the foundation of any stable, healthy democracy.
I know these values are shared across Latin America, although not yet enjoyed by all. Your support in the UN for Ukraine’s right to defend itself against Russian aggression has made that crystal clear. Talking of self-determination and democracy, it would be remiss of me not to talk about the Falklands.
The Falkland Islanders, like everybody else, deserve the freedom to decide their own future, in political, cultural, economic and development terms. Their 2013 referendum made clear that they wish to maintain their current relationship with the UK, as is their absolute right. And the UK will continue to support them. But protecting self-determination and democracy is not the sole challenge.
We live in a world of rapidly increasing transnational threats. Climate change is the most urgent and obvious example. We need strong multilateral institutions, representing the world as it is today, economically, politically and demographically. This is not currently the case. The UK recognises that. And we want to work with you to change it.
Countries across Latin America have a decisive role to play in reshaping the international order and the multilateral system to fit the world of the 21st century. Just as Canning foresaw. The population of this corner of our planet and its economy have grown rapidly in recent decades. In the year of my birth, 1969, Latin America was home to 279 million people. Today that figure is more than 664 million people.
Your demographic and economic weight gives you a pivotal role in determining whether the international order will endure. As I said last December, the shift in world power has been evident for some time. And it is my goal as the UK Foreign Secretary to ensure that our strategic thinking reflects this simple fact. That’s why I’ve come to Latin America this week.
I want to take forward the agenda set out in 2010 by my predecessor William Hague at Canning House in London. Since then, we’ve opened or reopened embassies and high commissions across the region. The UK has dozens of honorary consuls from Tijuana on the Mexico-US border to Punta Arenas on the southern tip of Chile.
The UK has welcomed thousands more Chevening scholars to our universities. And the number of Latin Americans visiting the UK has nearly doubled. The British Council has extended its reach 5-fold since 2010, reaching more than 100 million people across the Americas last year.
UK trade and investment with Latin America recovered strongly last year from their post-pandemic low. The total value of imports and exports rose by a massive 45% last year to more than £40 billion. But with Latin America representing only 2% of UK imports and only 2.5% of UK exports worldwide, I recognise that there is much more to do on trade and investment. Our shared strategic focus on critical minerals, green hydrogen and sustainable infrastructure is encouraging.
The UK’s imminent accession to the Trans Pacific Partnership, joining Mexico, Peru and Chile, is a positive step forward. And hopefully soon joined by Costa Rica, Ecuador and Uruguay. Last week, the UK completed the third round of talks on a UK-Mexico Free Trade Agreement.
Together we have a strong democratic voice in favour of the rules-based international system. Together we must speak out against the systemic threats to these values arising from multiple parts of the globe. And together we must work together on climate, the rights of women and girls, green energy, cyber security, science and technology.
At COP26 in Glasgow, my country pledged £300 million to protect the Amazon. As a result of our Partnerships for Forests programme, which I saw just days ago in Colombia, more than 62,000 hectares of land are now being managed sustainably across Colombia and Peru.
Another joint focus is the globally strategic lithium triangle that lies between Argentina, Bolivia and Chile. Rio Tinto’s billion-dollar investment is forecast to yield 100,000 tonnes of lithium by 2027. This will fuel the green battery revolution. We’ve supported Chile to sell bonds worth more than £21 billion on London’s Sustainable Bond Market. We’ve leveraged $464 million of green finance for Mexico.
Our green hydrogen technology offers Latin American farmers a cheaper and cleaner alternative to petroleum-based fertilisers, boosting food security everywhere. As part of our International Women and Girls Strategy, the UK has helped Chevening Alumni establish a gender-focused NGO called Hace la Fuerza. Bringing together women from Argentina, Colombia, Mexico, Paraguay, Peru and Uruguay, we have built a community of future Latin American leaders. Because when women’s rights are advanced, everyone gains.
These examples – and others like them – show how partnership between the UK and the countries of Latin America can make a real difference. Not just to our security and prosperity, but to that of the whole world. There is so much more that I would like us to do together. Our bilateral joint roadmaps will set direction in Brazil, Colombia, Peru and elsewhere.
The universal values on which the international order stands are timeless. But our world’s multilateral institutions do need reform, in particular to give more voice and more influence to Latin America. The UK wants Brazil to sit as a permanent member of the UN Security Council.
And we must work towards broader reform, in partnership with others. The call for systemic reform of our international financial institutions must be strengthened. Together we can unlock the critical green investments that this region needs from the World Bank and the Inter-American Development Bank.
The UK government supports the momentum behind Prime Minister Mottley’s Bridgetown Initiative. The poorest and most vulnerable must benefit from overdue reform of international financial institutions.
International tax reform, coupled with a crackdown on money laundering and illicit finance will stop the leakage of much-needed funding from national treasuries. Which is why the UK is providing £20 million for rule of law and anti-corruption reforms in Panama, Colombia, Ecuador and Peru. And £2.2 million for tax reform in Brazil.
But we should not neglect people-to-people ties.
The UK is home to more than a quarter of a million Latin Americans – amongst them are 71 players in the English Premier League, including 6 players from Argentina’s World Cup winning squad. My team Arsenal, even with 3 fantastic Brazilian players, all called Gabriel, still couldn’t win the league.
Hundreds of thousands of Britons visit this outstandingly beautiful region every year. Spanish is already the second most popular foreign language in British schools – and is forecast to take the top slot in the coming years. I want your best and brightest researchers and students to come to the UK’s world-leading universities. And I want more British students to come to Latin America to study as well.
We should be ambitious for our future relationship. Not just because of the historical bonds of friendship that have united us for more than 200 years, but because we all treasure the same fundamental values that inspired the creation of the international order. It will only evolve, survive and ultimately prosper with the support and whole-hearted engagement of this great region.
Two hundred years ago, Simon Bolivar said that “the freedom of the New World is the hope of the universe”. Your love of freedom continues to inspire the world today. It’s why I’ve come here from London to revive old friendships and build new ones. And to pledge our long-term commitment. I’m offering the UK’s support on the issues that we together most care about. And I ask for yours in exchange, as a partner. But, even more importantly, as the representative of this continent’s oldest friend.
Thank you………….”
UK pledges further financial aid to Colombia
Monday, May 22nd 2023
Petro and Cleverly also discussed key regional and international issues
British Foreign Secretary James Cleverly announced in Bogota £ 3.6 million to help the Colombian Government. “From the protection of the Amazon and the fight against climate change to the promotion of peace and security, the United Kingdom wants to be a key partner and friend of Colombia,“
After three days in Colombia, he leaves “more convinced than ever of the value and strength of our long friendship and what we can achieve together in the coming years.”
In his meeting with Petro, the British Foreign Secretary underlined the UK’s commitment to peace and security through the strengthening of bilateral cooperation, support for civil society, and in the UN Security Council, of which his country is a permanent member.
The United Kingdom would allocate another £ 3.6 million to security and peace, as part of the £ 80 million disbursed since the signing of the peace agreement.
On a visit to San José del Guaviare, on the border between the Orinoquia and the Amazon, Cleverly announced Britain would allocate £ 13 million to combat deforestation and other environmental crimes in Colombia.
Colombia and the UK also announced the launch of a joint Energy Transition Action Plan to a greener and more sustainable economy, which would allow the two countries to share experiences in areas such as wind energy, green hydrogen, and sustainable infrastructure.
They also pledged to strengthen the reactivation of the railway sector in Colombia through a new institutional alliance.
Petro and Cleverly discussed key regional and international issues, such as “the shared interest between the UK and Colombia in holding free and fair elections in Venezuela in 2024.” Colombia hosted last April the International Conference on Venezuela’s Political Process in which 20 countries, including the United States, participated.
Venezuela
New management at PDVSA expects to boost oil output, refining
Reuters
May 15, 2023
CARACAS, = new management expects state energy company PDVSA to boost the country’s oil production to 1.17 million barrels per day (bpd) by year end while increasing refining and exploration activities.
Venezuela’s monthly crude output in April surpassed 800,000 bpd for the first time since December 2021 following a company shake up triggered by an anti-corruption probe that demanded an audit of all its operations, subsidiaries and joint ventures, uncovering some $21 billion in accounts receivable.
A U.S. license allowing Chevron Corp (CVX.N) to reanimate operations has also helped the nation’s crude output and exports recover since late last year.
PDVSA’s new chief executive, Pedro Tellechea, and a new board of directors this year have reviewed supply contracts and partnerships aiming to cash on pending debt, optimize operations and boost production.
According to a plan presented by Tellechea to workers, seen by Reuters, PDVSA expects to increase crude output by 390,000 bpd by year end, boost gas output by 645 million cubic feet per day (cfd) to 2.27 billion cfd, and ramp up refining by 20% so an extra volume of 90,000 bpd of fuel can be sold domestically.
PDVSA aims to export about 1 million bpd of crude and fuel and 800,000 tonnes per month of petroleum coke by year end, above the average of 660,000 bpd of crude and fuel and 530,000 tonnes of petroleum coke it has exported so far this year.
One of the key projects to reach these goals is to restart the Petromonagas upgrader next month, which has been out of service since December after a fire, to convert about 80,000 bpd of extra heavy oil into exportable crude.
If it meets its goals, which in the past it has missed repeatedly, PDVSA would be able to pocket $4.2 billion in cashflow this year.
The company also has drafted a plan to drill three exploration wells in the country’s western region.
Deisy Buitrago in Caracas and Marianna Parraga in Houston. Editing by Mark Potter
U.S. Department of the Treasury
May 9, 2023
Office of Foreign Assets Control (OFAC)
May 1, 2023
On May 1, 2023, the U.S. Department of the Treasury’s Office of Foreign Assets Control issued a new General License (“GL”) 42, issued three new FAQs (FAQ 1123, FAQ 1124, and FAQ 1125), and amended existing FAQ 808 pursuant to the Venezuela Sanctions Regulations, 31 CFR part 591 (“VSR”).
General License 8L
New GL 42 permits settlement negotiations and agreements with the IV Venezuelan National Assembly, its Delegated Commission, any IV National Assembly Entity, or any person appointed or designated by these entities regarding the debt of the Government of Venezuela, Petróleos de Venezuela, S.A. (“PdVSA”), or any entity in which PdVSA owns 50 percent or more interest (subject to specific prohibitions set forth in the VSR). In summary, GL 42 creates a path for creditors of the Government of Venezuela or PdVSA to negotiate and settle their claims without violating U.S. sanctions.
This opens a door for PdVSA creditors to resolve their claims while minimizing legal and financial risks.
FAQ 1123 – FAQ 1123 provides clarification and additional guidance on the scope and limitations of GL 42. The U.S. District Court for the District of Delaware has entered a Sale Procedures Order regarding certain shares in PDV Holding (“PDVH”) to satisfy a U.S. district court judgment against Venezuela.
OFAC has stated it will not take enforcement actions against individuals or entities for participating in or complying with the preliminary steps outlined in the court’s Sale Procedures Order. However, an OFAC license will be required before any sale is executed, and the U.S. government will engage in due diligence about the identity of the potential purchaser and will consider relevant details of the proposed transaction. OFAC intends to implement policy favoring license applications in connection with the sale of the shares, but this policy is subject to reconsideration if U.S. foreign policy and national security interests materially change.
The non-enforcement posture applies only to OFAC sanctions and does not relieve persons of obligations to comply with other regulatory requirements, reviews, or approvals necessary to finalize the sale.
FAQ 1124 – FAQ 1124 states that parties seeking to enforce bondholder rights to the CITGO shares serving as collateral for the PdVSA 2020 8.5 percent bond can take steps to preserve their ability to do so without facing enforcement action from OFAC. This non-enforcement policy applies to OFAC sanctions only and does not relieve persons of obligations to comply with any other applicable regulatory requirements, reviews, or approvals that may be necessary to finalize any sale.
Parties who have negotiated a settlement agreement pursuant to GL 42 will still need to seek a specific license for entry into that agreement, as noted in FAQ 1125.
FAQ 1125 – FAQ 1125 provides that creditors of the Venezuelan government, PdVSA, or a PdVSA subsidiary, do not need an OFAC license to negotiate the settlement of claims related to the assets of the government or PdVSA, as long as the negotiations are with the IV National Assembly, its Delegated Commission, an IV National Assembly Entity, or a person appointed or designated by them. Settlement agreements relating to debt are included. GL 42, however, does not authorize entry into settlement agreements without a specific license for entry into that agreement. OFAC indicated that specific licenses will only be granted after due diligence and this licensing policy may be revoked or modified at any time.
GL 42 also does not authorize any transactions with persons blocked pursuant to the VSR other than those blocked persons enumerated in GL 42, unless separately authorized.
FAQ 808 – FAQ 808 clarifies that a specific license from OFAC is not required to initiate or continue U.S. legal proceedings against a person designated or blocked pursuant to the VSR. This means that parties can file a lawsuit in the U.S. court against such persons without seeking OFAC authorization. Additionally, creditors may file for writs of attachment without the need for OFAC authorization for matters involving property blocked under the VSR. However, it is important to note that a specific license from OFAC is required for the entry into a settlement agreement or for the enforcement of any lien, judgment, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to the VSR.
While Russia-related sanctions have certainly garnered significant attention, the direction of U.S. sanctions toward Venezuela has also been noteworthy.
The U.S. has imposed a series of increasingly stringent sanctions on Venezuela in response to the political and economic situation in the country, targeting the government and key individuals, as well as the state-owned oil company, PdVSA. As the humanitarian situation in Venezuela has worsened, the U.S. has imposed more comprehensive sanctions targeting the country’s oil industry, its key source of revenue. GL 42 demonstrates the U.S. resolve and is intended to calibrate the U.S. sanctions policy towards Venezuela, balancing the need for pressure on the government with the desire to provide relief for creditors seeking to negotiate debt settlements.
On 23 May, OFAC issued Venezuela-related General License 8L “Authorizing Transactions Involving PdVSA Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities” (notice).
The General License is for the following entities:
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- Halliburton;
- Schlumberger Limited;
- Baker Hughes Holdings LLC; and
- Weatherford International PLC.
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The General License authorises transactions and activities, otherwise prohibited by Executive Order 13850, that:
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- are for safety or the preservation of assets in Venezuela;
- involve PdVSA or any entity in which PdVSA owns a 50 percent or greater
- interest; and
- were in effect prior to July 26, 2019.
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The General License does not authorise:
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- the drilling of petroleum;
- the design or construction of infrastructure in Venezuela except as required for safety;
- exportation of diluents to Venezuela; and
- the payment of dividends or loans to PdVSA.
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Colombia
Petrobras steps on the gas with discovery
Plans include two appraisal wells, a subsea tie-back to shore, possibly via a platform in shallow waters
11 May 2023
By Gareth Chetwynd
Petrobras is working on a fast-track plan to bring an offshore natural gas discovery in Colombia’s Tayrona block into production by 2026. The Brazilian company’s exploration team think that there is more gas to be found there.
Petrobras holds a 45% stake in Tayrona, partnered by Colombia’s state-controlled company Ecopetrol.
Three years ago, the state-controlled company was all but ready to relinquish the whole block after frustrating results on the last two wells, but success with the Uchuva dry gas discovery last year has completely changed things.
Panama
Kanfer, CB Fenton bring onboard new partner for LNG bunkering project
By LNG Prime Staff May 11, 2023
Kanfer & CB Fenton bring onboard new partner for Panama LNG bunkering project Norway-based small-scale player Kanfer Shipping and shipping agency CB Fenton, part of Chile’s Ultramar, welcomed Melones Oil Terminal as a new partner for their planned LNG bunkering development. Kanfer and CB Fenton signed a memorandum of understanding in December last year to establish a hub for LNG bunkering and small-scale LNG distribution in Panama.
The partners are planning to establish a joint venture (JV) which would charter one or more ships from Kanfer, buy LNG and trade them to the maritime industry as well as gas to power clients in the region.
Plans also include a floating storage unit (FSU) of LNG on the Pacific side.
Balboa
Terminal operator Melones Oil Terminal (MOTI) and its affiliate company,
Trader Tankers, decided to join this development as “they see Panama as a strategic location for LNG bunkering.”
The parties signed a memorandum of understanding with the purpose of commercializing small-scale LNG bunkering and distribution in Panama and more specifically in Balboa. MOTI operates a bunker and diesel storage facility on the Pacific side of Panama where about 80 percent of the conventional bunkering is being done today. The parties have in mind establishing a small-scale LNG terminal on the Pacific side, to serve ports along the Pacific side of Panama and do small-scale LNG distribution along the coast.
After many discussions with various LNG sources they identified most of the sources in the region. The group is now determined to bring this project to commercialization and will be starting a feasibility study including bringing in another solid partner from the LNG bunkering and distribution value chain. The companies have started discussions with such parties.
“The target remains; we would like to see the service up and running with Kanfer’s state of the art bunkering ships by late 2025/early 2026.”
Colombia: Canacol Energy
25 May 2023
Photo – see caption
Canacol Energy has provided the following information concerning the new Lulo 1 gas discovery and near term drilling plans.
Lulo 1 tests 22 MMscfpd
As announced on May 3, 2023, the Lulo 1 exploration well, located on the 100 percent operated VIM21 Exploration and Production (‘E&P’) contract, encountered 207 feet of net gas pay within the Cienaga de Oro (‘CDO’) sandstone reservoir.
Lulo 1 was permanently tied in and production tested through the Jobo gas processing facilities located 50 meters away at an average rate of approx. 17 million standard cubic feet per day (‘MMscfpd’) for 7 days. The well was tested at various rates ranging from 3.9 MMscfpd to 22.2 MMscfpd with the choke varying between 19/128 and 39/128 inches and a final tubing head pressure of 2,042 psi at the rate of 22.2 MMscfpd, and is currently producing at a controlled rate of approx. 17 MMscfpd.
Lulo 2 drilling ahead
The Corporation commenced drilling of the Lulo 2 appraisal well on May 17, 2023, with the well anticipated to be completed and placed on production by the end of May 2023. It is anticipated that should Lulo 2 prove successful, the Lulo discovery, announced on May 3, 2023, will be capable of producing at a total rate of between 30 and 40 MMscfpd by early June 2023.
Near term exploration plans
Upon completion of the Lulo 2 well, the Corporation will mobilize the rig to commence drilling of the Piña Norte 1 exploration well, located approx. 300 meters to the southwest of the Jobo production facility. The Piña Norte prospect, like Lulo, is one of 5 exploration prospects identified within the middle to lower CDO sandstone reservoir within very close proximity to the Corporations main production facilities at Jobo. If successful, as is the case for Lulo, these near field exploration prospects can each provide new commercial production within weeks of discovery. The Corporation expects results from Piña Norte 1 by mid July, 2023, following which the Corporation plans to drill the Cereza 1 exploration well located approx. 1 km to the north of the Jobo production facility.
Canacol_s near term drilling focus is to increase productive capacity ahead of the upcoming El Niño season to ensure the adequate supply of natural gas to the Caribbean market.
Canacol operates over 1.5 million net acres in 11 exploration and production contracts in Colombia
Source: Canacol Energy