ISABELANA

 

Colombia 

Amerisur Resources reports good flow test at the Pintadillo-1 discovery well

03 Oct 2018
Amerisur Resources, the oil producer and explorer focused on South America, has announced the T sand interval at the Pintadillo-1 discovery, in the Platanillo block, has flow tested under natural flow at 590 bopd of 30.4 degrees API oil under choke of 18/64″ with strong wellhead pressure of 110psi. The water cut is less than 1% and is decreasing. An interval of 9 feet was perforated within the 15 feet of net pay identified in the T sand. Oil produced is being evacuated through the OBA pipeline with a consequent increase in the Company’s production.

The well will be observed at these stable parameters for at least a further three days, after which a downhole pump may be run to provide some lift to the well to optimise flow parameters.

The company plans to re-map the T and U sand targets across this part of block to evaluate the size of the discovery and will make a decision as to future drilling options from the Pintadillo pad thereafter.

Currently no T-sand or U-sand reserves are attributed to this part of the block. Once a production history is established management expects reserves to be attributed.

 

John Wardle, CEO of Amerisur said:

‘This is an exciting and very positive result from Pintadillo-1, ahead of what we had expected. Indeed, at current choked production levels, the well will pay back in under a year. The strong natural flow from the well, together with a different oil-water contact indicates a separate structure compared to the T-sand production in the southern part of the block, which further diversifies our production base.

‘There are currently no reserves of any class booked for the U and T-sands in this area of the block. We will now work to evaluate the size of the discovery while continuing to produce the well, which is being commercialised via our normal OBA route. Once that evaluation is complete we will make a decision as to options for drilling further wells from this Pintadillo pad with the objective of developing the U and T-sand discoveries.’

Source: Amerisur Resources

Panama

Staff Concluding Statement of the 2018 Article IV Mission

• A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.
• The authorities have consented to the publication of this statement. 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 Executive Board for discussion and decision.
• An International Monetary Fund team led by Alejandro Santos visited Panama from September 24-October 3 to conduct the discussions for the 2018 Article IV consultation. The team met with the Minister of Economy and Finance Eyda Varela de Chinchilla, Banks Superintendent Ricardo Fernandez, as well as other senior public officials and private sector representatives.
• Despite temporarily slowing in 2018, the economy is poised for a rebound in the near term and will remain among the most dynamic in Latin America. The outlook is positive, albeit set against heightened downside risks. Policies should aim at maintaining the conditions for sustained growth by preserving Panama’s competitive advantage as an attractive destination for business. Strengthening AML/CFT oversight and enhancing tax transparency and information exchange will be important to cement Panama’s position as a regional financial center. It will also be important to preserve fiscal discipline as this is the main macroeconomic stabilization instrument and to reinforce the fiscal framework with the establishment of a fiscal council. Given the importance of the financial system in the Panamanian economy, the authorities should continue to bolster systemic risk assessment, risk-based supervision and put in place robust frameworks for macroprudential policy and crisis management.

The economy has slowed down temporarily but fundamentals remain strong.

• Weaker activity . High frequency data indicate that economic activity has softened, with growth estimated at 3.7 percent in H1-2018 (compared to 5.4 percent in 2017), reflecting a sharp slowing down in key sectors including construction, which was affected by a prolonged strike in April/May. The unemployment rate increased marginally to 5.8 percent in March 2018 from a year ago, reflecting less dynamic activity.
• Tamed inflation . Inflation remains low and stable at around 1 percent (y/y) in August 2018 (compared to 0.5 percent in December 2017), despite supply shocks that have increased food and fuel prices.
• Fiscal discipline . The overall deficit of the NFPS reached 1.6 percent of GDP in H1-2018 (compared to deficit of 0.2 percent of GDP in the first half of 2017), due to an underperforming tax revenue and a strong growth in current and capital expenditures to support the economic weakening.
• Stable external position . The current account deficit remained at 8 percent of GDP in 2017 and it has deteriorated further in the first half of 2018 as international oil prices have rebounded. However, the current account deficit remains mostly covered by foreign direct investment.

The outlook is positive but the balance of risks is to the downside

• Panama will remain among the most dynamic economies in Latin America.The mission will finalize its revised growth projections for 2018-19 in the coming weeks, and stressed that the balance of risks to the current forecast (i.e., 4.6 percent for 2018 and 6.8 percent for 2019) is to the downside. In any case, and despite the recent slowdown, the revised growth forecast will remain above 4 percent in 2018, and it will continue to be above 6 percent in 2019, supported by a recovery in construction, transport, logistics and exports from a new copper mine. Over the medium-term, growth is expected to moderate to its potential of 5½ percent. Inflation will remain subdued to about 2 percent. External imbalances are expected to continue declining and to remain broadly consistent with fundamentals. The fiscal position will remain stable, with the overall deficit of the NFPS projected at about 1½ percent over the medium term, keeping public debt on a declining path.
• Risks are elevated and tilted to the downside. A key domestic risk is failure to demonstrate progress in addressing outstanding FATF recommendations, notably criminalization of tax evasion ahead of the next FATF Plenary in February 2019 and advancing tax transparency initiatives, which could expose Panama to reputational damage, among other consequences. Continued oversupply in the domestic property markets could impact financial stability and the real economy. Panama also faces heighten external risks. A weaker-than-expected global growth and escalating trade tensions in advanced economies, could dampen exports and government revenue. A sharp tightening of global financial conditions, and a stronger US dollar would erode Panama’s competitiveness.

Financial integrity and tax transparency should continue to be strengthened.

• Effective implementation of the AML/CFT framework must remain a priority .Building on the recent positive assessment by GAFILAT, the authorities should continue strengthening supervisory capacity for AML/CFT oversight. Further development of risk-based approaches to AML supervision will be essential to effectively channel available resources to critical areas. Enhancing the understanding of AML/CFT risks to which Panama is exposed, particularly in the highly vulnerable sectors will help map out strategies to mitigate AML/CFT risks. Outstanding gaps in the legal framework should be addressed to fully align it with international standards. Making tax crimes a predicate offense to money laundering by approving the draft legislation under consideration without further delay and ensuring the availability of beneficial ownership and accounting records of Panamanian entities are important to avoid being listed as a non-cooperative jurisdiction, and thereby eroding the recent gains. Continued efforts to sensitize the international community on progress with financial integrity is paramount.
• Efforts to further enhance tax transparency and information exchange should continue . Actions being taken to share tax information more widely and promptly under the OECD’s common reporting standard and the Multilateral Competent Authority Agreement should continue. Going forward, the priority should be to further advance the implementation of tax transparency initiatives towards a successful Global Forum’s forthcoming assessment against enhanced standards. In addition, the authorities are also encouraged to implement the minimum standards on Base Erosion and Profit Shifting (BEPS), in line with Panama commitments as a member of the OECD/G20’s Inclusive Framework on BEPS.

The fiscal framework needs additional strengthening to sustain budgetary discipline.

• A simplified fiscal rule will improve transparency . To this end, the authorities recently sent legislation to the National Assembly to modify the SFRL improving transparency. The new SFRL establishes a ceiling on the headline deficit of the NFPS of 2 percent of GDP in 2018, 1¾ percent in 2019-20, and 1½ percent of GDP after 2020, with the target over the medium-term broadly consistent with the current limit under the law. If approved this year, the new legislation will allow for a higher fiscal deficit by ½ of GDP for 2018 (compared with the current SFRL), which would be appropriate given the weakening activity. In the event this legislation is not approved, the fiscal stance would be broadly neutral for 2018. In any case, the track-record of fiscal discipline ensures debt sustainability.
• Measures to further reinforce the fiscal framework should be adopted . The proposal to establish a fiscal council will further promote accountability and help nurture informed public debate on fiscal policy. The authorities submitted legislation to this effect in 2017.
• Continued and sustained progress to strengthen revenue administration is needed . Governance and institutional capacity of the custom administration needs to urgently improve, along several dimensions, namely, human resources, ad hoc exemptions, control processes, and data collection and management. In addition to initiatives to modernize tax administration, strong action is also needed to publish a list of estimated foregone revenues due to tax incentives and exemptions to help initiate public debate to review these complex schemes that continually erode Panama’s tax base.

Financial sector reforms are required to build resilience.

• Systemic risk oversight should be strengthened to build financial resilience and guard against macro-financial feedback loops . Addressing data gaps with respect to household and corporate balance sheets and property prices remains a top priority. Coordination on the assessment of systemic risk across financial sector supervisors and with the Ministry of Finance should also be enhanced through the Financial Coordination Council (CCF). An institutional framework for macroprudential policy and tools should be developed to provide more policy flexibility in addressing macrofinancial risks.
• The alignment of prudential regulations with Basel III should continue . With the regulatory framework now broadly aligned to Basel III, the priority should shift to a strengthening of risk-based supervision of both banks and non-banks. It will also be important to put in place a robust framework for crisis management, including adequate liquidity support for banks and deposit insurance, and to strengthen the bank resolution framework by enhancing the range of resolution tools available to facilitate the timely resolution of troubled banks. FinTech has the potential to transform Panama’s regional banking sector, with close supervision and adequate regulation of developments needed to nurture the benefits while preserving financial stability

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The mission would like to thank the Panamanian authorities for their excellent cooperation, kind hospitality, and candid and open discussions.

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: RAPHAEL ANSPACH

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

Cuba

Melbana Energy signs LOI with China’s AGMI for Cuba Block 9 farmout

Highlights:

• Letter of Intent (LOI) for farmout of Block 9 signed with Anhui Guangda Mining Investment Co. Ltd., (“AGMI”) a Chinese company providing oilfield services and equipment both in China and internationally.
• LOI key terms:
  Melbana’s top three high impact exploration wells (Alameda, Zapato, Piedra) to be drilled by July 2020, with at least two of these wells to be drilled in 2019
  AGMI to replace Melbana cash backed bank guarantee
  Melbana back-costs recouped in event of development
  Melbana to retain 12.5% of profit oil under the Block 9 Production Sharing Contract
  Melbana fully carried for 100% of all activities and costs for remainder of term of Block 9 PSC (20+ years) while AGMI remains a participant in Block 9
  Cuban regulatory approval obtained to execute LOI, targeting execution of binding agreement before end of 2018
  AGMI considering using the April 2018 drilling slot offered to Melbana by a local operator in addition to other options available at their disposal.
  Block 9 recently independently assessed1 to have 15.7 billion barrels of oil in place (best estimate) and recoverable Prospective Resources of 718 million barrels.
  LOI with program of three firm exploration wells provides multiple opportunities for a significant discovery in underexplored Block 9 onshore acreage
  Melbana Energy has signed a non-binding Letter of Intent (LOI) with Anhui Guangda Mining Investment (‘AGMI’) with respect to its Block 9 Production Sharing Contract in Cuba.

The terms of the LOI state that AGMI will:

• Fully fund the drilling of a minimum of three exploration wells in Block 9, one on each of Melbana’s three highest ranked and high impact targets (Alameda, Zapato and Piedra) prior to July 2020, with two exploration wells to be drilled prior to November 2019;
• Replace the current cash backed bank guarantee for US$2.275Million provided by Melbana for the benefit of Cupet with an equivalent bank guarantee using its own banking facilities;
• Fully fund 100% of all exploration, appraisal, development and production activity and costs and provide any required bank guarantees for Block 9 while AGMI remains a participant in the Block 9 PSC (20+ years remaining);
• At its election, assume operatorship of Block 9.
• In the event of a successful development, Melbana would recover its back costs of ~US$3.5million from the authorized cost recovery pool as well as 12.5% of the profit oil.

Melbana and AGMI are targeting to complete a binding definitive agreement by 1 December 2018 with AGMI considering using the April 2019 drilling slot made available to Melbana by a local operator in addition to the other options available at their disposal.

The farmout follows from the recently released prospective resource assessment of Block 9 by independent expert McDaniel & Associates Consultants, who have significant Cuban experience certifying reserves for TSX listed Sherritt International. Their independent assessment identified a best estimate Oil in Place of 15.7 billion barrels1 and Prospective Resources of 718 million barrels of oil equivalent from three prospects and 16 leads. The assessment included a best estimate prospective resources of 270 million barrels1 of oil in the five targeted objectives contained within Melbana’s preferred high impact exploration prospects Alameda (3 objectives in well), Zapato and Piedra.

Melbana Energy’s CEO, Robert Zammit, said:

‘We are very pleased to have agreed LOI terms for the Block 9 farmout with AGMI where the minimum commitment to fully fund the drilling of our three preferred high impact prospects occurs at no further cost to Melbana shareholders. As AGMI proceeds with further activity in the block, Melbana will also be fully carried for all further activity and costs, including any appraisal, development, production costs and bank guarantee obligations while earning a 12.5% share of the profit oil under the Block 9 PSC and recovering its back costs of approximately US$3.5Million in the event of a commercial development.

AGMI is prepared to commit significant resources to complete a drilling and development program in Cuba and has substantial experience operating onshore in multiple jurisdictions. We have a mutual understanding of the opportunity that Block 9 provides for significant oil discoveries and we look forward to finalizing a binding agreement late in the current quarter.’

Dominican Republic 

2018 Article IV Consultation-Press Release and Staff Report
Author/Editor:International Monetary Fund. Western Hemisphere Dept.Publication Date:October 24, 2018

Electronic Access:Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Summary:2018 will mark 15 years since the start of the 2003–04 financial crisis. Reforms put in place following the crisis have contributed to strong economic performance over the past decade and a restoration of external stability. The economy is now growing close to potential, inflation is within the central bank’s target range, unemployment is near historical lows, and the external current account deficit has narrowed. The economic outlook remains positive with broadly neutral monetary and fiscal policy expected to keep economic activity on trend and inflation within the target band over the medium term. However, risks around the outlook persist, with the main downside risks stemming primarily from external factors. In this context, the key challenge will be to build resilience to these risks by strengthening domestic fundamentals. Progress will be essential to increase potential growth and further reduce poverty and inequality.

Series:Country Report No. 18/294

EMGS Confirms South America Survey

Electromagnetic Geoservices (EMGS) has confirmed the contract award for a survey in South America.The company has now received a letter of award for the contract, with a total value of up to approximately USD 8 million.

Earlier this month the company started preparations for the potential data acquisition survey with an undisclosed customer.  EMGS is now mobilizing the vessel Atlantic Guardian to South America.

Subject to. amongst other things, final contract award, EMGS expects that the survey will start in the fourth quarter of 2018.  The expected duration of the survey is between one and two months.