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Tuesday, January 12, 2010
Today's News Headlines
* PDVSA to face full plate in 2010 - analyst - Venezuela
* Cosan gets injunction to remove name from blacklist - Brazil
* Details on first algae project to be released soon - minister - Chile
* Pemex to receive bids for desulfurization units on January 15 - Mexico
* Pemex cancels second 2009 Burgos drilling tender on budget shortfall - Mexico
* Pacific Rubiales drills two appraisal wells - Colombia
* Export basket up to US$74.45/b - Venezuela
* Country to launch biofuels pilot program - Ecuador
* Liquids output up 20.7% in 2009, gas increases 2.27% - Peru
* Enap introduces high quality diesel - Chile
* OGX finds new signs of hydrocarbons in Campos basin - Brazil
* InterOil output rises to 7,114b/d in December - Colombia, Peru
* PetroMagallanes tests oil at Río del Oro-1A - Chile
* Global 2009 production drops to 398,082b - Colombia
* IN BRIEF Petrobras' service stations hit new sale volume record - Brazil
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* PDVSA to face full plate in 2010 - analyst - Venezuela
Venezuela's state oil company PDVSA will likely face a busy 2010 as the firm will be confronted with both upstream and downstream challenges, RoseAnne Franco, a senior analyst with PFC Energy, told BNamericas.
"As far as PDVSA, it once again has been handed a full plate by the government as it continues to manage non-oil sector obligations with its pressing operational commitments," Franco said. "In particular, PDVSA intends to increase expenditures in its downstream segment for much needed maintenance in 2010."
"That said, these investment commitments may be tempered should Venezuela confront a more difficult external environment and the administration is forced to lean more on the state oil company," she added.
Market analysts, meanwhile, reacted favorably to the announcement by President Hugo Chávez that the country would devalue its currency by around 50%. While the measure will likely anger some supporters because of more expensive imports, the Venezuelan government will receive twice as many bolívares for every barrel of oil sold.
"With regard to Venezuela, this year will certainly define the prospects for any expansion in Venezuela's unconventional crude production," Franco said, not directly commenting on the devaluation.
"Not only is the Carabobo tender scheduled to conclude, but numerous projects moving from quantification and certification to development will call into question the operational and financial capacity of PDVSA's smaller NOC partners," she said.
By Nathan Crooks
Business News Americas
* Cosan gets injunction to remove name from blacklist - Brazil
Brazilian sugar and ethanol major Cosan (NYSE: CZZ) has obtained an injunction to remove its name from the Brazilian labor ministry's slave work blacklist, a spokesperson for the company told BNamericas, confirming earlier reports.
"The federal court has accepted Cosan's appeal and determined that the labor ministry should remove the company's name from its list," the spokesperson said.
The labor ministry has three days to take Cosan's name off the list or it will have to pay a daily fine of 50,000 reais (US$29,000).
The federal court accepted Cosan's argument that a third party contracted by Cosan is responsible for working conditions that placed the company on the list. Cosan has said it had no knowledge about the situation. The ethanol major also said it has cancelled contracts with the sugarcane processor.
"The inclusion of Cosan to the slave work list was a mistake," a spokesperson for Brazil's agriculture minister told BNamericas. "But sadly, the agriculture ministry has no power to change this list."
On December 8, Cosan was at risk of losing all financing with Brazilian federal development bank BNDES because of the slave work scandal.
Companies on the list are not entitled to loans from BNDES or federal banks Banco do Brasil and Caixa Econômica Federal (CEF).
By João Carvalho
Business News Americas
* Details on first algae project to be released soon - minister - Chile
Chile's national energy commission CNE is preparing to announce winning firms in a tender to develop biofuels from algae and microalgae, the country's energy minister Marcelo Tokman said at a press conference.
"We have good news about the program, and we plan to announce the winning companies in the coming days," the minister said.
Chile's scientific and technological fund Fondef in late 2008 launched a program to promote biofuels in conjunction with the CNE.
Winning projects will be eligible for grants of 180mn pesos (US$365,000).
By Christopher Lenton
Business News Americas
* Pemex to receive bids for desulfurization units on January 15 - Mexico
Mexico's state oil company Pemex will receive bids for the engineering and construction of gasoline desulfurization plants at two of its refineries on January 15, according to federal procurement website Compranet.
The plants would be located at the Minatitlán and Salina Cruz refineries in Veracruz and Oaxaca states.
The firms that attended the final project meeting were: Sadeven, Grupo Samsung Ingeniería México, ABB, ABB México, ACS Servicios Comunicaciones y Energía México, Emerson Process Management, ICA Fluor Daniel, Isolux Ingeniería, Automation and Control Solutions, Tecnimont, Spisa Ingeniería y Construcción, and ARB Arendal.
Other companies who had previously purchased bidding rules included: Ruhrpumpen, OHL Industrial, Technip Servicios de México, Siemens Innovaciones, Integración de Sistemas de Actuación, Implementos y Servicios Electrónicos, and Senermex Ingeniería y Sistemas.
Works are scheduled to run 1,290 days, and the tender number is 18572039-005-09.
The tender is the third group of desulfurization plants that aims for Pemex's refining subsidiary Pemex Refinación to comply with the norm of 30ppm sulfur content in gasoline.
Last year, Pemex awarded a contract to ICA Fluor Daniel for desulfurization plants at the Héctor R Lara Sosa refinery in Caderetya, Nuevo León state, and the Francisco Madero refinery in Madero, Tamaulipas state.
ICA Fluor Daniel presented a bid of US$638mn.
By Business News Americas staff reporters
* Pemex cancels second 2009 Burgos drilling tender on budget shortfall - Mexico
Mexican state oil company Pemex's E&P subsidiary PEP has cancelled the international tender for drilling in its Burgos basin in Tamaulipas and Nuevo León states, according to federal procurement website Compranet.
The company attributed the cancellation to the need to adjust its 2010 operating program in accordance with budgetary limits.
The tender number for the three-year contract was 18575110-002-09.
Industrial Perforadora de Campeche recently won the contract for the first Burgos drilling tender of 2009 with its bid of 7.61bn pesos (US$599mn). The company's third tender for drilling works was previously cancelled.
The Burgos basin is the largest producer of non-associated gas in the country.
By Business News Americas staff reporters
* Pacific Rubiales drills two appraisal wells - Colombia
Toronto's Pacific Rubiales (TSX: PRE) has drilled two appraisal wells in Colombia's Upper Magdalena and Llanos basins, the company said in a statement.
The first well, ABA-35, was drilled in the northern extension of the Abanico field in the Magdalena basin.
A petrophysical evaluation of the well indicated a net oil pay zone of 53ft (16.2m) and 108ft in the Upper and Lower Guadalupe sand reservoirs, respectively.
A production test carried out on three intervals in the Lower Guadalupe reservoir yielded 450b/d of oil with a 21 API grade and 3% water cut.
The well is the third consecutive successful appraisal well drilled to extend the Abanico reservoir to the north.
Meanwhile, the company's Quifa-13 well in the Llanos basin turned up a net pay zone of 19ft in the Carbonera Basal sands.
The company is preparing to complete the well as an oil producer.
Prospects on the northern side of Quifa will be explored in 1Q10 as part of the company's twenty-well drilling campaign for this year.
By Business News Americas staff reporters
* Export basket up to US$74.45/b - Venezuela
Venezuela's average oil export basket price rose US$2.99 in the week of January 4-8 to US$74.45/b, the energy and oil ministry (Menpet) reported.
The average price for 2009 was US$57.02/b versus US$86.49/b in 2008 and US$64.74/b in 2007.
Crude prices on world markets rose during the week because of cold weather in the US, Europe and Asia Menpet said.
By comparison, the OPEC basket rose US$3.31 to US$78.84/b, WTI increased US$2.96 to US$81.70/b and North Sea Brent was up US$3.08 to US$80.41/b.
By Business News Americas staff reporters
* Country to launch biofuels pilot program - Ecuador
Ecuador is set to launch a biofuels pilot program in Guayaquil, the country's energy and mining ministry said in a statement.
The pilot project will create a 5% gasoline admixture with ethanol produced from sugarcane. The project will require 50,000l/d of ethanol which will be provided by local industry, according to the statement.
Ecuador currently spends US$700mn/y importing naphtha for refining purposes. The project would reduce these imports and boost the local agroindustry, according to the statement.
The pilot program will officially be launched on January 12 in Guayaquil by President Rafael Correa.
By Business News Americas staff reporters
* Liquids output up 20.7% in 2009, gas increases 2.27% - Peru
Peru's liquid hydrocarbons production totaled 53.3Mb in 2009, up 20.7% from the previous year, according to state hydrocarbons promotion agency Perupetro.
The increase was due principally to the start of operations of block 56 in September 2008 and the Cashiriari deposit (block 88) in July, state news agency Andina reported.
Last month, liquid hydrocarbons production averaged 152,960b/d, similar to November.
The bulk of December production came from blocks 88 and 56, with 43,179b/d and 34,728b/d, respectively.
The areas were followed by blocks 1-AB (19,357b/d), X (13,136b/d), Z-2B (12,506b/d) and 8 (12,201b/d).
Production in the month from other blocks totaled 17,853b/d.
NATURAL GAS
Natural gas output last year rose 2.27% to 123Bf3 (3.48Bm3) driven by increased demand from thermoelectric plants, according to Perupetro.
Natural gas output averaged 328Mf3/d last month, down 6.51% from November.
Block 88 produced 278Mf3/d in December, followed by blocks 31-C (20.3Mf3/d), X (13.1Mf3/d) and Z-2B (9.85Mf3/d).
Monthly output from other blocks totaled 7.09Mf3/d.
By Business News Americas staff reporters
* Enap introduces high quality diesel - Chile
Chile's state oil company Enap has announced it began selling higher quality diesel in the country at the start of the year.
The new grade B diesel will contain 50ppm of sulfur, from levels in 2003 as high as 3000ppm, making it one of the cleanest fuels in Latin America, the company said in a statement.
Enap's CEO Rodrigo Azócar said at the launch of the product that combined investments of US$600mn in the past two decades in modernization of the Bio Bio and Aconcagua refineries were key to enabling the cleaner fuel.
"The improvement in the quality of our fuels is not something we did in 2009 but rather something Enap has been involved in for over a decade," Azócar said.
"The new grade B diesel allows us to reduce sulfur emissions by 85% in industry and cars," he continued.
By Business News Americas staff reporters
* OGX finds new signs of hydrocarbons in Campos basin - Brazil
Brazilian oil company OGX announced new signs of hydrocarbons in the Eocene section of its OGX-4 well on the offshore BM-C-42 block in Brazil's Campos basin.
OGX holds a 100% working interest in the block, the company said in a statement.
OGX said a column of hydrocarbons was found at a depth of around 90m. Drilling at OGX-4, which started on December 26, will continue to a total depth of 3,400m.
The well OGX-4 is located 79km off the coast of Rio de Janeiro state.
OGX is part of the EBX group owned by Brazilian tycoon Eike Batista.
By Business News Americas staff reporters
* InterOil output rises to 7,114b/d in December - Colombia, Peru
Norway's InterOil Exploration & Production, which operates in Colombia and Peru, produced 7,114b/d last month compared to 6,236b/d in November.
In December, average output in Colombia and Peru reached 2,285b/d and 4,829b/d, respectively, versus 2,203b/d and 4,033b/d the previous month, the company said in a statement.
Total production at the end of December was roughly 8,500b/d.
"The increase in production can be traced back to the ongoing drilling and dual completion campaign," InterOil said in the statement. "Three new wells in Peru have successfully been set in production in December."
Oil was sold in December at an average price of US$73.48/b in Peru and US$69.09/b in Colombia.
By Business News Americas staff reporters
* PetroMagallanes tests oil at Río del Oro-1A - Chile
PetroMagallanes, the Chilean subsidiary of New Zealand's Greymouth Petroleum, announced that oil and gas has flowed from its Río del Oro-1A well on the Caupolicán block in the Tierra del Fuego region of southern Chile.
The company is planning a further period of flow tests and evaluation activities related to the discovery in order to facilitate a declaration of commercial exploitation, the company said in a statement.
The company also announced it had mobilized a drilling unit for the Clarencia-1A well for testing of potential gas-bearing zones. The information will help optimize the design of seismic acquisition programs in 2010 on the block.
PetroMagallanes has a 50% stake in the block in a JV with Chile's state oil company Enap.
"This flow of oil at Río del Oro is of particular importance," PetroMagallanes spokesman Alberto Harambour said. "We are confident this will lead to an early declaration of commercial exploitation under the terms of the contract with the government of Chile."
PetroMagallanes has concessions to explore, develop and produce hydrocarbons in four blocks covering an area of 9,000km2 in southern Chile.
By Business News Americas staff reporters
* Global 2009 production drops to 398,082b - Colombia
Latin America-focused Global Energy Development (AIM: GED) produced 398,082b of net oil in 2009 compared to 438,007b during the previous year, the company said in a statement.
The drop in production was due to the depressed oil price during most of the year, Global said.
Global also announced it acquired good quality 2D and 3D seismic data over its producing Colombian Río Verde contract towards the end of 2009.
The seismic data has now been interpreted, and the location of the Río Verde-2 exploratory well is being finalized. The well will be drilled before May 2010, and rig contractor negotiations are expected to be finalized shortly.
By Business News Americas staff reporters
* IN BRIEF Petrobras' service stations hit new sale volume record - Brazil
Brazilian state-run energy giant Petrobras (NYSE: PBR) said its service stations in Brazil sold a record 2.02Bl of fuels in December 2009.
In a statement, the company said the previous record was registered in October last year at 1.95Bl.
The new level is 11.2% higher than sales seen in December 2008, Petrobras said.
According to the company, the result is due to a new marketing plan for its BR Distribuidora brand which operates Petrobras' service stations.
By Business News Americas staff reporters
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In-deph interview
* PDVSA to face challenging 2010
Thomas O'Donnell
Fulbright scholar/analyst
New School University
Venezuela
http://www.bnamericas.com/interviews/oilandgas/Thomas_O*Donnell_,New_School_University,1/169479599
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Main companies covered in today's news
* Caixa Econômica Federal
http://www.bnamericas.com/company-profile/en/Caixa_Economica_Federal-CAIXA/169479599
* Cosan S.A. Indústria e Comércio
http://www.bnamericas.com/company-profile/en/Cosan_S,A,_Industria_e_Comercio-Cosan/169479599
* Pacific Rubiales Energy Corp.
http://www.bnamericas.com/company-profile/en/Pacific_Rubiales_Energy_Corp,-Pacific_Rubiales/169479599
* Ministerio del Poder Popular para la Energía y Petróleo
http://www.bnamericas.com/company-profile/en/Ministerio_del_Poder_Popular_para_la_Energia_y_Petroleo-Menpet/169479599
* ABB Limited
http://www.bnamericas.com/company-profile/en/ABB_Limited-ABB/169479599
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