SOUTH AMERICAN ENERGY DAILY ROUNDUP (March 16, 2009): Petrobras to invest $100m in Uruguay
South America Energy Markets (SAEM) will begin a daily roundup of the top-five stories affecting energy markets in the region with links. The roundup includes all the major web dailies of South America and other websites that write about the region’s energy markets. I aim to publish SAEM Daily Roundup from Monday through Friday by noon London time.
March 16, 2009
URUGUAY – INVESTMENTS
In an exclusive interview with SAEM, Petrobras Uruguay president, Irani Varella, said that the lion’s share of the $100-million investments in the following five years will be earmarked ($45 million) for expanding Uruguay’s gas distribution network with $35 million going to offshore exploration. He mentioned that Petrobras is interested in taking part in a tender this year to build a regas LNG terminal in the capital Montevideo.
ARGENTINA -FINANCIAL RESULTS
Ever wondered why state-owned energy company Enarsa never has produced a quarterly never mind an annual financial result? Former enegy secretariat, Daniel Montamat, said in Salta-based El Tribuno that Enarsa has never published a financial results since it “operates on a loss every month.” Montamat said that on paper Enarsa looked like a huge company but in practice it was only a tiny player. Enarsa was created in 2004 by the former Nestor Kirchner government.
BOLIVIA – CORRUPTION
After state-owned energy company YPFB president Santos Ramirez resigned in the end of January when he was linked to an alleged corruption scandal involving the death of an energy executive, the government and opposition maverick eastern departments of Bolivia have been pointing the finger at each other. The MAS (Movement Towards Socialism) government’s anti-corruption ministry now accuses the governor of gas-rich Tarija for purchasing defective generation plants for the “hefty” sum of $1.36 million. Without a doubt, the YPFB scandal was a big blow to the credibility of the government but especially to the energy sector. Wouned and still bleeding, the government will attempt to throw all of its arsenal against the maverick departments no matter how insignificant it may be.
REGIONAL – SAEM ANALYSIS
(Published March 13, 2009) – If the region saw extensive deregulation in the 1990s and an about-turn during this decade through energy market intervention in countries such as Argentina, Bolivia, Ecuador and Venezuela, what regulatory winds will be blowing in South America in the next decade? Without a doubt, LNG will play a greater role in countries such as Chile, Argentina and Brazil at the cost of piped dry gas. Looking back on the past two decades, I believe that nationalism will strengthen with gas being used as a geopolitical weapon to gain more clout. Possibly the biggest winner of the South American energy self-sufficiency gas and oil game will be won by Brazil, Venezuala and to a lesser extent Peru. These will most likely be the countries that will shape and influence supply, policy and the geopolitics of the region in the next decade.
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