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Wednesday, January 13, 2010
Today's News Headlines
* YPFB announces five-year investment program of US$11bn - Bolivia
* Attorney general to appeal Cosan injunction in blacklist scandal - Brazil
* Talisman to invest US$700mn in 2010 international exploration - Colombia, Peru
* H&P says devaluation to impact quarterly results by US$20mn - Venezuela
* Petrobras, Exxon, TPAO sign agreement for Black Sea E&P - Brazil
* Ultrapar to invest US$180mn in Ipiranga this year - Brazil
* Sener publishes criteria for determining "principal" E&P projects - Mexico
* Government cuts ethanol admixture rate to 20% - Brazil
* SCT reopens oil ports after weekend closure - Mexico
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* YPFB announces five-year investment program of US$11bn - Bolivia
Bolivian state hydrocarbons company YPFB announced a five-year investment program of US$11bn, state news agency ABI reported.
YPFB president Carlos Villegas said in August last year that the company would need investment of US$11bn through 2026, which could suggest that Bolivian authorities are planning to accelerate works to finally increase stagnant natural gas production.
"I dream of having our state company becoming as important as Brazil's Petrobras or Venezuela's PDVSA," Bolivian President Evo Morales said at a ceremony to unveil the investment program.
YPFB's investment program will be financed by Bolivia's government, external financing sources and foreign firms that have announced new agreements with the company. YPFB officials said late last year that they had already obtained a US$1bn loan from Bolivia's central bank.
While Bolivia's government has frequently been depicted as hostile to foreign investment, especially after it nationalized most of its hydrocarbons industry, signals have recently started to emerge that the government may again be looking to attract foreign expertise.
Bolivia's government in late November said it was aware that nationalization of the industry in 2006 had not been sufficient to boost production and formed a company to promote and advance new hydrocarbons projects in the county.
Dubbed Empresa Boliviana de Industrialización de Hidrocarburos, the new firm was given a small budget and will seek to form partnerships with foreign companies.
"Bolivia shouldn't have to wait 60 years to get the industry going," the country's hydrocarbons minister Óscar Coca said.
Spanish oil major Repsol (NYSE: REP) said in November it would invest US$1.5bn in Bolivia to increase natural gas production in the country. Russia's Gazprom and French oil major Total (NYSE: TOT) in 2008 signed an MOU with YPFB to invest US$4.5bn in a new natural gas project in Bolivia.
By Business News Americas staff reporters
* Attorney general to appeal Cosan injunction in blacklist scandal - Brazil
Brazil's attorney general's office is preparing to appeal an injunction that removed sugar and ethanol major Cosan (NYSE: CZZ) from a government list of companies accused of using slave labor.
"We are still waiting for the final document to be processed and sent to us before we launch our appeal," a spokesperson for the attorney general's office told BNamericas, confirming earlier reports.
Cosan on January 11 obtained an injunction that removed it from the labor ministry's slave labor blacklist.
The federal court accepted Cosan's argument that a third party contractor was responsible for the slave labor accusations. Cosan has said it had no knowledge of the situation. The company also said it has cancelled contracts with the sugarcane processor involved in the scandal.
"The inclusion of Cosan on the slave labor list was a mistake," a spokesperson for Brazil's agriculture minister told BNamericas earlier in the week.
On December 8, Cosan was at risk of losing all financing with Brazilian federal development bank BNDES because if its inclusion on the blacklist.
Companies on the list are not entitled to loans from BNDES or federal banks including Banco do Brasil and Caixa Econômica Federal (CEF).
BNDES has already resumed financing activities with Cosan, the bank said in a statement.
By João Carvalho
Business News Americas
* Talisman to invest US$700mn in 2010 international exploration - Colombia, Peru
Canada's Talisman (NYSE: TLM) has announced an international exploration program of US$700mn for 2010.
Nearly US$500mn of that will be invested in potential new core areas and include the drilling of new wells in Peru and Colombia, CEO John Manzoni said in a conference call with investors and analysts.
Talisman budgeted a total of US$5.2bn for capex in 2010.
COLOMBIA
The company plans to begin appraisal drilling on the Hurón discovery in the Niscota block in Colombia in late 2010, according to the CEO.
Hurón is 300km northeast of capital Bogotá in the Llanos basin.
Hocol, a unit of Colombia's state oil company Ecopetrol (NYSE: EC), operates the block with a 20% stake. Colombian firm Tempa, a subsidiary of France's Total (NYSE: TOT), holds 50% and Talisman holds the remaining 30%.
PERU
"Following the successful Situche appraisal well in block 64 in Peru, the company plans to drill the Runtasapa exploration well in adjacent block 101," Manzoni added in the call.
The company's assets in Peru include interests in onshore areas 64, 101, 103, 134 and 158.
By Christopher Lenton
Business News Americas
* H&P says devaluation to impact quarterly results by US$20mn - Venezuela
Tulsa-based service firm Helmerich & Payne (NYSE: HP) expects its second fiscal quarter of 2010 to be impacted by the currency devaluation recently announced by authorities in Venezuela.
The company could see an exchange rate loss of around US$20mn in its second fiscal quarter ending March 31 because of the devaluation, the company said in a statement.
H&P's estimate does not include the decline in value of uncollected invoices issued since the company changed its revenue recognition to cash basis for its Venezuelan operations.
The value of future potential collections related to unrecorded invoices, previously disclosed at approximately US$61mn, could decline by 25% to 35%, according to the statement.
"The company proactively continues efforts to collect unpaid invoice amounts in Venezuela but has not received any payments since its fiscal year-end earnings report dated November 19," H&P said in the statement.
All eleven H&P rigs that formerly worked for Venezuela's state oil company PDVSA remain idle, but H&P is continuing to pursue future drilling opportunities for the rigs in Venezuela. New contracts, however, are not likely to be signed until additional progress is made on pending receivable collections and on conversion of local currency to US dollars.
Venezuela's government last week announced that it would devalue its currency by half. 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.
By Business News Americas staff reporters
* Petrobras, Exxon, TPAO sign agreement for Black Sea E&P - Brazil
Brazil's federal energy company Petrobras (NYSE: PBR) signed an agreement with Turkey's state-run Turkish Petroleum Corporation (TPAO) and US major ExxonMobil (NYSE: XOM) to explore for oil in deep waters of the Black Sea.
In a statement, Petrobras said the company and ExxonMobil will each hold a 25% stake in the Sinop block located off the coast of Turkey. TPAO will hold the remaining 50%.
Petrobras will be the operator of the block.
The drilling rig to be used in the project, the Leiv Eiriksson, arrived in Turkey on December 31. The rig was built in 2001 and can drill in water depths of up to 2,300m.
Drilling works are expected to start at the Sinop-1 well in the first quarter this year.
By Business News Americas staff reporters
* Ultrapar to invest US$180mn in Ipiranga this year - Brazil
Brazilian fuel distribution, gas and chemical group Ultrapar (NYSE: UGP) plans to invest 314mn reais (US$180mn) in its Ipiranga unit, Brazil's second largest fuel distributor, in 2010.
In a statement, Ultrapar said investments in Ipiranga will focus on expanding the fuel distributor's service station network in Brazil's center-western, northeastern and northern regions.
Ultrapar operates more than 5,000 service stations in Brazil. It acquired US major Chevron's Texaco-branded stations in the country in 2008 for 1.16bn reais.
Ultrapar also said it will invest 152mn reais in its Ultragaz gas distribution unit and focus on expanding services for medium and large clients.
By Business News Americas staff reporters
* Sener publishes criteria for determining "principal" E&P projects - Mexico
Mexico's energy ministry Sener has published the criteria for determining state oil company Pemex's principal E&P projects, according to official gazette Diario Oficial.
The projects that qualify as "principal" must be approved or rejected by Sener.
Whether the projects are characterized as principal will be based on their share of the company's investments or their strategic importance in reaching energy policy goals.
Principal exploration projects determined by investment amount are those which over a 15-year period, starting from the date approval is requested, make up 2% or more of the company's exploration budget.
Likewise, principal production projects determined by investment amount are those that over the same timeframe make up 2% or more of the production budget.
The regulation applies to projects that were not already underway as of September 4, 2009.
To read a copy of the rules, in Spanish, go to this link (http://dof.gob.mx/nota_detalle.php?codigo=5127797&fecha=12/01/2010)
By Business News Americas staff reporters
* Government cuts ethanol admixture rate to 20% - Brazil
Brazil's gasoline will contain 20% ethanol from February 1 as opposed to the current 25% admixture rate, according to a statement from the agriculture ministry.
The reduction will be valid for 90 days, and the admixture rate will then be increased back to 25%.
The measure was taken in order to minimize the impact of rising ethanol prices on the Brazilian fuel market.
According to the state news agency Agência Brasil, ethanol prices have increased 20% in the last five months as the sugarcane harvest has been delayed due to heavy rains affecting producing areas.
Brazilian sugarcane and ethanol industry association Unica said in a statement the initiative is "fair," as it is only temporary and being announced in advance.
By Business News Americas staff reporters
* SCT reopens oil ports after weekend closure - Mexico
Mexico's transport and communications ministry (SCT) reopened all Gulf of Mexico ports on Monday morning following closures associated with bad weather that reduced the flow of oil exports, according to the ministry's website.
Closures included Mexico's three largest oil export ports: The largest, Cayo Arcas, had been closed as of Saturday morning; Coatzacoalcos, the second largest, had been closed since Friday afternoon; while the third, Dos Bocas, had been closed as of Friday morning.
Mexico's state oil company Pemex exported 1.22Mb/d of crude in November, the most recent month with company statistics. The figure was down from 1.50Mb/d year-on year.
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,1/169679535
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Main companies covered in today's news
* Secretaria de Comunicaciones y Transportes
http://www.bnamericas.com/company-profile/en/Secretaria_de_Comunicaciones_y_Transportes-SCT_Mexico/169679535
* Cia. Ultragaz S.A.
http://www.bnamericas.com/company-profile/en/Cia,_Ultragaz_S,A,-Ultragaz/169679535
* Caixa Econômica Federal
http://www.bnamericas.com/company-profile/en/Caixa_Economica_Federal-CAIXA/169679535
* Cosan S.A. Indústria e Comércio
http://www.bnamericas.com/company-profile/en/Cosan_S,A,_Industria_e_Comercio-Cosan/169679535
* Pacific Rubiales Energy Corp.
http://www.bnamericas.com/company-profile/en/Pacific_Rubiales_Energy_Corp,-Pacific_Rubiales/169679535
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