CARICOM

CARICOM energy month is observed in November.

The UK deployed almost 90 specialists to help to mitigate the impact of Caribbean storms threatening British overseas territories.

Tropical Storm Isaac was due to hit the Windward islands. The 87 British personnel dispatched to the region, including engineers, medical staff, maritime experts and other specialists, join the regular civilian crew of the Royal Auxiliary Fleet’s Mounts Bay, a landing ship dock that is the mobile hub of the UK relief effort. It marks a change in disaster relief planning after the former UK representative to Anguilla disparaged government efforts to respond to Hurricane Irma, which battered British overseas territories.

Irma, the most powerful Atlantic Ocean hurricane on record, caused widespread flooding and damage last September. Eventually 700 British troops and 50 police officers were deployed to the British Virgin Islands. As criticism about the UK response mounted Boris Johnson, then the foreign secretary visited the region. His actions trailed the quick-witted response of President Macron of France, who travelled earlier to the Franco-Dutch Caribbean island of St Martin, which was devastated by the storm.

Before this hurricane season the UK has stepped up its planning, with Royal Engineers and Royal Marines training alongside their French counterparts in Martinique to offer humanitarian assistance and disaster relief. About a thousand extra military personnel are on standby in the UK to fly out to the Caribbean if further storms hit. A Royal Navy Wildcat helicopter aboard RFA Mounts Bay is to provide aerial support and the vessel also has a medical facility with ten patient beds. The civilian-manned ship will remain in the region until 2020, the government has pledged.

Gavin Williamson, the defence secretary, said: “I want to assure everyone in our overseas territories that our armed forces have been pre-positioned in the region and are absolutely prepared to help. We will be there to support during this hurricane season while still helping those whose lives were devastated by Irma and Maria to rebuild their lives and homes.” Andrew Pearce, governor of Monserrat, said: “We are delighted to welcome this small team from the armed forces as we make our final preparations for the approaching storm. I am also particularly reassured that, if we need her, RFA Mounts Bay is ready to respond.”

The Trinidad archipelago

Storm Kirk caused floods in Fyzabad and other oilfields in Trinidad which suffered damage from Storm Bret in 2017 when vulnerable families in Penal and adjacent oilfields lost their belongings as massive aid was lavished on Irma and Maria victims in Dominica, Barbuda and neighbouring islands. Some remain homeless in Trinidad swamps among deadly snakes, caiman and mosquitoes, neglected by a regime now closing the refinery which supported rural livelihoods. An Energy Innovation Hub, Trinidad brought prosperity to the region supplying fuel and other petroleum products to CARICOM which can now mobilise regional investment in the refinery

On June 18, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Dominica.

On September 18, 2017, category 5 Hurricane Maria hit Dominica while the country was still recovering from tropical storm Erika. Maria was Dominica’s worst natural disaster with damage estimated at US$1.3 billion (226 percent of GDP). Most economic sectors sustained significant damage and losses, with public infrastructure carrying the brunt. The output collapse and costs of reconstruction resulted in large fiscal and current account deficits. Fiscal performance deteriorated sharply due to the fall in tax revenue after the hurricane, but was partially offset by a surge in grants and buoyant Citizenship-by-Investment (CBI) sales revenues. With limited revenue, drawdown of large government deposits, grants, and an insurance payout helped meet financing needs. The hurricane also exacerbated weaknesses in the financial sector, particularly of non-bank institutions, which face undercapitalization, low profitability and high non-performing loans. Credit to the private sector has been flat and inflation remains subdued.

In 2018, output is projected to decline by 14 percent and to take about 5 years to recover to pre-hurricane levels. The fall in output and government revenue, coupled with increased expenditure for rehabilitation and reconstruction, will lead to a substantial worsening of fiscal and external deficits. However, signs of recovery, particularly in construction and the public sector, have already started to emerge. The risks to the outlook include the budget becoming financially constrained and unable to sustain adequate investment given high debt, limited buffers, weak revenue, and urgent needs for reconstruction spending. Other risks include financial instability stemming from undercapitalization of systemic financial institutions, recurrent natural disasters with low resilience, uncertainty regarding CBI and grant income, and external competitiveness challenges.

Executive Board Assessment[2]

Directors commended the authorities’ efforts in responding to the humanitarian crisis and significant devastation wrought by Hurricane Maria. Directors stressed the need to implement cost effective fiscal policies and reforms to support recovery while containing expansion of public debt. They recommended containing current spending extraneous to recovery, and enhancing the efficiency of capital investment while protecting critical social and recovery spending. Given Dominica’s vulnerability to natural disasters, directors noted that investment in resilient infrastructure was appropriate, despite its higher cost. They encouraged the authorities to create a savings fund for natural disasters. Once output recovers, directors recommend fiscal consolidation to sustain reconstruction while generating a primary surplus sufficient to set public debt on a downward trajectory.

Directors highlighted the need for stronger financial sector regulation and supervision to address vulnerabilities exacerbated by Hurricane Maria. They stressed the importance of decisive action to reduce non-performing loans and capital shortfalls, as well as adequate preparedness for possible liquidity pressures in line with recommendations of Fund’s technical assistance. Directors recommended maintaining a proactive stance to mitigate the risk of withdrawal of correspondent banking relationships including continued strengthening of the AML/CFT framework. They supported the phasing out of the off-shore bank sector and welcomed cessation of new license issuance.

Directors agreed that enhancing growth prospects requires higher private sector participation and improving the business environment. To this end, directors recommended identification and removal of costs and barriers that affect investment and profitability. They advocated that public sector compensation decisions consider their impact on private wages and competitiveness. Directors stressed the need to improve the business environment, including efforts to reduce the costs of dealing with the government. They urged strict enforcement of construction and zoning regulations given vulnerability to natural disasters.

Press Release and Staff Report

Author/Editor:International Monetary Fund. Western Hemisphere Dept.Publication Date:September 5, 2018Electronic Access:Free Full Text. Use the free Adobe Acrobat Reader to view this PDF fileSummary:Category 5 Hurricane Maria hit Dominica on September 18, 2017 while it was still recovering from tropical storm Erika, which had damaged the island on August 27, 2015. While Erika had caused severe damage, estimated at 96 percent of GDP, Maria was Dominica’s worst natural disaster with damage estimated at US$1.3 billion (226 percent of GDP). Prior to the disaster, the government had been making progress on fiscal consolidation commitments associated with the October 28, 2015 disbursement under the Rapid Credit Facility (SDR 6.15 million), which had sought to generate primary surpluses adequate to reduce the debt to GDP ratio to 60 percent by 2030.Series:Country Report No. 18/265Subject:Article IV consultation reports Competition Debt sustainability analysis Economic growth Economic indicators Financial sector Fiscal consolidation Fiscal policy Press releases Private sector Staff reports
ENGLISH
Publication Date:September 5, 2018ISBN/ISSN:9781484374788/1934-7685Stock No:1DMAEA2018001

Barbados

IMF Reaches Staff-Level Agreement with on an Economic Program under the Extended Fund Facility
September 7, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
Staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by early October.
The Barbados’s Economic Recovery and Transformation Plan aims to restore macroeconomic stability and put the economy on a path of strong, sustainable and inclusive growth, while safeguarding the resilience of the financial sector.
The cornerstone of the program is a strong front-loaded fiscal adjustment focused on curbing current expenditure, while maintaining space for bolstering social safety nets and infrastructure spending.
At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown from August 30 to September 7, for discussions on possible IMF financial support for the Government of Barbados’s Economic Recovery and Transformation plan. At the end of the visit, Mr. van Selm made the following statement:

“I am pleased to announce that, in support of the Barbadian authorities’ economic reform program, the IMF team and the government of Barbados have reached staff-level agreement on a 48-months Extended Fund Facility, with access of SDR 208 million (equivalent to 220 percent of quota, or about US$290 million). If approved by the IMF Executive Board, SDR 35 million (about US$49 million) would be immediately available. Staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by early October.

“In the last decade, the Barbadian economy has been caught in a cycle of low growth, widening fiscal deficits and increasing debt. International reserves have dwindled to US$240 million, well below reserve adequacy levels, while central government debt has become unsustainable.

“The new government that took office in May 2018 is rapidly developing plans to address the current vulnerabilities, in close consultation with its social partners. The Barbados’s Economic Recovery and Transformation Plan aims to restore macroeconomic stability and put the economy on a path of strong, sustainable and inclusive growth, while safeguarding the resilience of the financial sector. The authorities’ fiscal consolidation program, in conjunction with the announced debt restructuring, would place debt on a clear downward trajectory. The strategy of accelerating growth focuses on attracting new investment in areas such as renewable energy, creative and artistic industries, education and health services, agro-industries, research, the international business sector, and tourism.

“The authorities’ reform program, and the important commitment of IMF resources that it entails, is a vote of confidence in Barbados’ Economic Recovery and Transformation Plan. The cornerstone of the program is a strong front-loaded fiscal adjustment focused on curbing current expenditure, while maintaining space for bolstering social safety nets and infrastructure spending. In this context, the measures to reduce government expenditures announced in late August are a critical and important first step. These measures aim to improve the efficiency and effectiveness of public services and reduce government transfers to state-owned enterprises by reviewing user fees; exploring options for mergers; and strengthening oversight. The measures should help reach a primary surplus target of 6 percent of GDP in 2019/20.

“The fiscal adjustment will be complemented by a comprehensive debt restructuring, aimed at securing meaningful debt reduction, reducing financing needs, and restoring debt sustainability. Barbados’ central government debt will be put on a clear downward path towards a target of 60 percent of GDP by 2033, from an estimated 157 percent of GDP at present. Progress being made by the authorities in furthering good-faith discussions with domestic and external creditors is welcome. Continuing open dialogue and sharing information will remain important in concluding an orderly debt restructuring process.

“The success of Barbados’ program will require an extraordinary effort and resolve on the part of the authorities and other segments of society, as well as broad international support. While the initial implementation period will be challenging, Barbados will emerge stronger and more dynamic from the program, and it will be better poised to generate growth and job creation for the people of Barbados.

“The team would like to take this opportunity to thank Barbados’ authorities and the technical team for their openness and candid discussions.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: RANDA ELNAGAR

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

Dominica

UKHO Seabed Mapping Campaign

The UK Hydrographic Office (UKHO) has deployed a motorboat to survey the waters off Dominica as part of the Commonwealth Marine Economies (CME) Programme.

Following a stakeholder meeting with Dominica’s Maritime Authority and wider government in late 2017 after Hurricane Maria, priority survey areas were agreed to capture seabed mapping data of Dominica’s main ports and approaches.

The mapping equipment being used has no negative impact on its diverse ecosystems and marine life, and surveying is expected to continue throughout September, focussing on areas including Roseau, Portsmouth and Soufriere Bay.

Data from the survey will be used to update navigation charts of the region, as well as helping Dominica to meet its international maritime obligations, including respective elements of the Implementation of IMO Instruments Code (IIIC). These updated charts will reduce navigational risk and improve the safety of ships, cargo and crew, encouraging access for its growing cruise ship sector and maximising efficiency of trade by enabling ships to confidently increase cargo-carrying capacity.

This data will also be supplied to the government of Dominica to support a range of environmental and scientific applications. This will help Dominica to better manage the marine environment, supporting the sustainable management of fisheries and other marine resources, as well as coastal protection and management.

This work forms part of the CME Programme, which is funded by the UK Government and delivered by the UKHO, the Centre for Environment, Fisheries and Aquaculture Science (Cefas) and the National Oceanography Centre (NOC). The programme aims to support the sustainable growth of Commonwealth Small Island Developing States (SIDS) by making the most of their natural economic and environmental resources. UKHO

Turks and Caicos Islands Seabed Mapping Project

The most comprehensive seabed mapping survey of the seas surrounding the Turks and Caicos Islands (TCI) is currently being conducted by the UK government’s UK Hydrographic Office (UKHO).

The Turks and Caicos Islands has international obligations under the International Maritime Organization’s (IMO) Safety of Life at Sea (SOLAS) Convention to ensure that its navigable waters are sufficiently surveyed to modern standards, and that fit-for-purpose navigational charts and publications are produced and provided to professional mariners.

Whilst the ADMIRALTY Maritime Data Services portfolio of existing navigational charts and publications are produced by the UKHO on behalf of the TCIs, a significant percentage of TCI’s waters have either never been systematically surveyed, or were last surveyed nearly over a hundred years ago.

In January 2016, the IMO commenced its mandatory audit programme of SOLAS. This is especially relevant to those states and territories that operate shipping registries, such as TCIs. If nothing is done to rectify the shortfall of modern seabed mapping in TCI’s waters, the audit may record a non-conformity, which will have negative economic knock on effects for the shipping that serves the territory. Besides the potential legal, political and economic impacts, the lack of up to date seabed mapping poses a real risk to the safety of shipping and would have associated environmental consequences in the case of a maritime incident.

As part of the UK governments Sovereignty Defence & International Obligations Programme (supported by the Conflict, Security and Stabilisation Fund), the UKHO is working with Territories to identify survey priorities, and where possible arranging for these surveys to be conducted. The survey data will then be used to update the respective navigational charts. The survey will be conducted from July through to mid-September, and costs in the region of £1,000,000 to complete. The associated positive economic benefits of hydrography are clear with the average return of approximately £7.50 for every £1.00 spent. However, this ratio can exceed 1:250 for more remote, more geographically challenged and less developed coastal states.

The bathymetric LiDAR (light detection and ranging) survey consists of a specially modified light aircraft fitted with state of the art sensors, which use a laser to accurately measure the depth of the water. It will fly at low altitude over the shallow water areas in a systematic grid in order to cover the entirety of the survey area. The system that is being used is safe to humans, animals and the natural environment, and is common and certified for this type of application.

Later this year, the UKHO will be conducting a boat-mounted hydrographic survey, and combined with this LiDAR survey, this essential work will mean that the TCIs will be amongst the most well surveyed Territories or island nations in the world. Data from these surveys can inform the sustainable use of TCI’s valuable marine resources, and the presence of this dataset will act as an enabler and accelerator for the development of the Islands ‘Blue Economy’.

Like previous surveying in the Caribbean, uncharted features may be identified, including wrecks. A complete picture of the waters of TCIs will be acquired, and this valuable dataset is expected to be used to support other crucial activities, such as inundation mapping and coastal planning.

The Permanent Secretary of the Ministry of Tourism, Environment, Heritage, Culture and Gaming, stated: “This survey programme being undertaken by UKHO and its contractors gives the government of Turks and Caicos the opportunity to completely survey the waters surrounding the islands, supporting greater navigational safety and assisting the territory in fulfilling its international maritime obligations whilst aiding in disaster recovery and future development both on the islands and in the waters surrounding them.”

Suriname

Kosmos Energy’s Pontoenoe-1 well offshore disappoints

10 Oct 2018
Kosmos Energy has completed drilling the Pontoenoe-1exploration well in Block 42 offshore Suriname.

Pontoenoe-1 was designed to test late Cretaceous reservoirs in a stratigraphic trap charged from oil mature Albian and Cenomanian-Turonian source kitchens. The well was located offshore Suriname approx. 280 kms northwest of Paramaribo in approx. 2,497 meters of water and has been drilled to a total depth of approx. 6,194 meters.

The prospect was fully tested but did not discover commercial hydrocarbons. High-quality reservoir was encountered, but the primary exploration objective proved to be water bearing. Kosmos believes there was evidence of a working source kitchen and the prospect failed due to a lack of trap. The well will now be plugged and abandoned and the well results integrated into the ongoing evaluation of the remaining prospectivity in Kosmos’ acreage position.

Andrew G. Inglis, chairman and chief executive officer, said:

‘We are in the early stages of exploring the emerging Suriname-Guyana basin, and given the indications of a mature source, quality cretaceous reservoir, and the independent nature of the prospectivity we believe there is significant remaining potential in Block 42. Our current plan is to test the next prospect in 2020.’

Kosmos holds rights in the Block 42 contract area under a production sharing contract with the Government of Suriname’s Staatsolie. The block ranges in water depth between approx. 2,000 and 2,500 meters and covers an area of over 6,000 sq kms gross. Kosmos (33.3 percent) is the exploration operator of Block 42 and is joined by its partners Hess (33.3 percent) and Chevron (33.3 percent).

Original article link

Source: Kosmos Energy

Staatsolie CEO not worried about dry holes.

‘Saudi Arabia, North Sea had them too’The offshore oil and gas business has heard of the new oil El Dorado, Guyana,put on the oil and gas map by a series of offshore oil iscoveries by ExxonMobil and now expected to produce first oil from its Liza discovery in 2020.

Rudolf Elias, CEO of Suriname’s national oil company is preparing Staatolie for what many believe is going to be a big offshore oil find. In a recent interview given to Offshore Energy Today Elias said Staatsolie was contemplating a public offering of a part of its shares to raise funds for participation in any significant offshore oil find.

Staatsolie would probably need to shell out between $500 million and $1.5 billion if it is going to participate with 10-20 percent in an offshore oil find. Elias has shared that the number would be around $1.4 billion if an oil discovery is made similar to ExxonMobil’s Liza find in Guyana. This field is due for the production start in 2020.

While preparing the company to be financially ready to take part in any future offshore development, OET asked if he was at all worried by dry wells drilled in the recent period.

“No, not at all…You will not hit oil immediately. You first have to understand the geology,” Elias said. Dry wells had been drilled even in Saudi Arabia and the North Sea before commercial discoveries were made.

Staatsolie is looking at mimicking practices from Colombia’s Ecopetrol and Malaysia’s Petronas, what the government should do ahead of an oil find, etc… Rudolf Elias will speak about Suriname’s offshore oil prospects at The Global Oil Event, at the Offshore Energy Conference in Amsterdam this month.