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SOUTH AMERICAN ENERGY MARKETS DAILY ROUNDUP (April 16, 2009): Repsol announces another promising find in Brazil’s Santos Basin

April 16, 2009

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.

Thursday, April 16, 2009


After Repsol of Spain announced the commercial viability of the Piracuca well in the offshore Santos Basin (see South American Energy Markets Daily Roundup, April 15, 2009)  the company said in a statement of the discovery of the Iguazu well (BM-S-9), located 340 km off the coast of Sao Paulo state at a depth of 2,140 meters.  Initial tests on the well show high-quality light crude. Petrobras (operator) has a 45% interest in the well together with BG Group (30%) and Repsol (25%).  The Piracuca well (BM-S-7) is estimated to have 550MMBOE of oil and gas reserves.


After giving the green light to gas-tariff hikes last year, the government will soon decide on new hikes of up to 30% for households, reports Buenos Aires daily La Nacion. The new hikes will come into force when gas regulator Enargas published the new tariff schemes for each of Argentina’s nine gas distributors. For clients of Metrogas, Argentina biggest distributor serving the capital Buenos Aires, tariff rises will be between 10% and 30%.


State-owned power company UTE sees with ever-worrying concern low rainfall levels, which has forced it to import 500MW of power from Brazil via Argentina, accounting for 40% of its daily consumes, writes Montevideo daily El Pais. Uruguay, which generates about two thirds of its power from hydropower installations,  imports about one third of its energy needs during periods of high demand. UTE general manager, Gerardo Rey, said that for the “time being” there are no plans to ration electricity in the country. “We are making (power) purchases on a day-by-day basis because Argentina has priority over purchases from Brazil,” he said.


After it came to public light that Petropar owed PdVSA a whopping $270 million in Paraguayan financial terms (see South American Energy Markets Daily Roundup, April 15, 2009),  the president of the Paraguayan state-owned energy company,  Pablo Sugastti, denied to ABC Color that President Fernando Lugo had asked him not to sign any agreement with the Venezuelan state-owned energy company. Petropar is presently negotiating in Caracas with PdVSA on restructuring its debt for a payback period of 15 years at 2% interest compared with 8% now. Sugastti said that he is negotiating with PdVSA an exclusive agreement for the energy company to supply the Paraguayan market with 1 billion litres annually. The majority of Paraguayan cars consume diesel.


(Originally published on April 15, 2009) The $20-billion-plus Gasoducto del Sur pipeline, which aimed to transport 150 million cu m/day of gas from Venezuela to Brazil, Uruguay and Argentina, has been shelved indefinitely, according to Gazeta Mercantil/Reuters, quoting Brazilian Foreign Minister Celso Amorim. The Brazilian minister blamed the current economic downturn and the lack of funds for the shelving of the project.  Despite Amorim’s statements, SAEM alerted readers in 2007 that not only had Venezuelan President Hugo Chavez admitted that the project was impractical, but that it was a pipedream. Apart from the adverse environmental impact that such a pipeline would have on the Amazon Jungle, would it not be cheaper and more practical to build LNG regasification terminals? Another factor why Brazil is skeptical about the pipeline project is that it does not want to depend on its neighbors for energy, especially when there is a geopolitical component that would undermine its leadership in the region.

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