LatAmOil Week 04

Issue 548
27January2015
Week 04
Major interest
Despite the fall in prices, oil majors have flocked to Mexicos data rooms to
study blocks as the historic Round One tender proceeds.
Production reduction
Oil companies in Colombia have warned the oil price slump could cause
production in the country to fall by 220,000 barrels per day by 2018.
Crisis (mis)management
Venezuelas tweaking of its forex system highlights a government clutching at

straws as the economy unravels.
Wintershall is coming
Germanys Wintershall is to launch a shale exploration project with GyP in

Argentinas Neuquen Province, home to the Vaca Muerta shale.
COMMENTARY
Mexico managing price slump as tenders

proceed
Currency controls confirm crisis for

Caracas
PIPELINES & TRANSPORT
US-Mexico swap deal feasible in Q1
INVESTMENT
Andes bolsters Colombian position with

IOX purchase
Pemex outlines cost-cutting plans
PERFORMANCE
Price crash creates downstream uplift for

Petrobras
Colombian oil output forecast to fall
POLICY
Argentina offers incentives to spur oil

production
Maduro moots petrol price increase
9
10
Qatar cited as potential downstream

investor in Venezuela
PROJECTS & COMPANIES
10
11
YPF prepares Chaco-Parana Basin

exploration plan
11
GyP, Wintershall to start Argentina shale

drilling in March
11
Americas Petrogas brings four Neuquen

wells on line
12
BPZ pushes ahead at Perus Block Z-1 13

NEWS IN BRIEF
13
SPECIAL BRIEFING
17
LatAmOil
27 January 2015, Week 04
page 3
COMMENTARY
Mexico managing price

slump as tenders proceed
Despite the fall in prices, oil majors have flocked to Mexicos data rooms to study blocks
as the historic Round One tender proceeds
By Jude Webber
Shell, Chevron, BG and ExxonMobil have already been authorised access to the eight data rooms
Mexico is due to announce the second swathe of tenders at the end of this month
Foreign investment in projects could halve while the oil price remains low
The oil price crash has come at a
sensitive time for Mexico with its oil
sector liberalisation under way. With the
countrys historic bid rounds progressing,
investment is likely to be lower as
companies cut their capital expenditure
budgets. Government officials are also
now saying some shale fields that were
due to be auctioned this year will be held
back until prices recover.
Undeterred, the National
Hydrocarbons Commission (CNH),
which is running the tender process,
remains upbeat. It recently opened stateof-the-art data rooms, in which interested
parties can study all the geological
information. This includes seismic
studies and data from 32 exploratory
wells drilled near the first 14 fields that
are being offered to investors.
Major names such as Royal Dutch
Shell, Chevron, BG Group and
ExxonMobil are among those that have
already been authorised access to the

eight data rooms. Others include
Colombias Ecopetrol, Australias BHP
Billiton and US independent Hunt Oil.
And the CNH said the number of
companies expressing interest in the data
was growing by the day.
Interest is holding up Round One
is going well, even with this price
scenario, Juan Carlos Zepeda, head of
the CNH, told reporters.
The first 14 fields are all in shallow
waters, where production costs are
around US$20 per barrel. Under the
terms of the tender, companies will be
restricted to bidding for a maximum of
five fields and belonging to only one
consortium.
Mexicos state-run oil company Pemex
is a shallow-water specialist and is
unhappy at being restricted to just five
fields. But the government is seeking to
maximise investment and experience to
Mexican Deepwater Production Forecast

500
400
d 300
p
b
k
200
100
0
2017
2022
2027
2032
2037
Source: NewsBase Research Global Oil Forecast
boost production that has been flagging

for a decade, dropping to the current
level of 2.4 million bpd from a peak of
more of 3.4 million bpd in 2004.
Alma America Porres, a CNH
commissioner, said foreign majors were
interested in the first fields to be offered
even though they are in shallow waters.
The core focus of the majors was
expected to be the deep waters of the
Gulf of Mexico, where striking oil is
virtually guaranteed.
Companies accessing the data rooms
will see not only an integrated geological
atlas of the areas but also a wealth of
seismic and other data in a format that
can be viewed on any software, the CNH
said. Mexico is expected to announce the
second swathe of tenders at the end of
this month in productive fields in
shallow waters with the winners of the
first batch of bids to be announced in
July. Tenders will continue throughout
the year.
Shale rethink
While deepwater fields still look
attractive at current prices, with drilling
years away and prices likely to have
recovered by the time productions comes
on stream, the 62 shale blocks included
in this years Round One are now being
re-evaluated. Shales relatively speedy
transition from exploration to production
makes current low prices more of a
deterrent. Areas where shale
development would occur also remain
dangerous in security terms and lack
infrastructure.
Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

Copyright 2015 NewsBase Ltd.
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
LatAmOil
page 4
COMMENTARY
Zepeda said several shale blocks
overlapped with other types of
hydrocarbons prospects at different
depths, meaning some may still be
economic. But others including
unconventional prospects in the
challenging Chicontepec formation
may now have to be dropped from Round
One and included in subsequent tenders.
The impact of the lower price on other
areas is less clear. For example,
Chicontepec, which contains both light
and heavy crude, comprises some
prospects that would cost US$120 per
barrel to produce and others below
US$40. Some areas, [which] we will be
seeing as part of this tender, are viable
and competitive even at low prices,
Zepeda said. Other tenders were being
reassessed, he added.
Blocks in the south of Chicontepec,
which are more productive, have more
chance of being viable, while other
fields in the north are more likely to be

reassessed. The CNH is advising the
Mexican Energy Ministry on the
technical aspects of which fields to keep
in this round and which to drop, and by
March-April the authorities should have
a clearer idea, Zepeda said. But what is
not in Round One will be put in later
rounds, he went on.
He is confident that investment in
Round One will not be wildly different
from the US$12 billion the government
has estimated. But Benito Berber, an
analyst at Nomura, wrote in a research
note this week that he expected annual
investment in Mexicos oil sector to fall
into the US$4 billion to US$6 billion
range, from the US$8 billion to US$12
billion estimated before the price
collapse.
However, the overall foreign direct
investment outlook coming from
electricity, natural gas pipelines, energy-
related infrastructure, petrochemicals and

manufacturing could add another US$5
billion in a sustainable way, he added.
In the coming few weeks Mexico also
expects to award as many as five to ten
permits for companies to conduct seismic
studies, another potentially lucrative
source of investment. Companies will
have 12 years of exclusivity to be able to
sell the data to interested parties,
compared to ten in Brazil and Norway
and 25 in the US.
Zepeda said the terms ought to spur
onshore and offshore seismic surveying
in Mexico and boost prospectivity. This
is an information business, he said.
It is also a price-sensitive business.
And although annual investment in the
oil sector could halve whilst prices are
low, as noted by Nomuras Berber, the
overall impact on Mexicos auctions
appears to be relatively contained thus
far.

LatAmOil
page 5
COMMENTARY
Currency controls confirm

crisis for Caracas
Venezuelas tweaking of its foreign exchange system is indicative of a government
clutching at straws as the economy spirals out of control
By Peter Wilson
Venezuelan President Nicolas Maduro said the country would retain its complex triple exchange rate system
The system is an obstacle to doing business in the country and an ongoing risk to IOCs and PDVSA
The oil price slide has exacerbated the dollar crunch, raising fears of a possible debt default
Venezuelan President Nicolas Maduro
last week ended months of dithering and
announced changes to the countrys
foreign exchange system. The move was
designed to restore faith in his faltering
government and reboot the economy,
which contracted by 2.4% last year.
Instead, critical questions remain
unanswered and the governments
decision to opt for a stealth devaluation
will make doing business in the country
more expensive for oil companies, as it
stokes inflation.
Maduro said in his annual address to
the National Assembly that Venezuela
would continue to have three official
exchange rates, dashing hopes he would
opt for one unified rate, perhaps at
between 30 and 40 bolivars to the US
dollar. Such a system isnt viable at
present, Maduro said. Hopes for an
outright devaluation were also dashed.
This is pure improvisation, one
banker, who spoke on condition of

anonymity, told NewsBase. Maduro still
couldnt give any details about the new
systems, even though he has had more
than a year to work on them. I really
dont know what is going to happen
next.
The late president Hugo Chavez
enacted forex controls in 2003 to arrest
capital flight during a nationwide strike
that sought to force him from power.
The country will maintain its official
forex rate of 6.3 bolivars to the dollar,
which is used for imports of basic
foodstuffs and medicines, Maduro said.
The official rate is also the one most
open to abuse, however, as it is used to
reward government officials and their
families.
The existing SICAD forex rates both
of which are set in opaque auctions are
to be merged into one. The SICAD I rate
which is used for selected industries to
cover their operating needs is currently

12 to the dollar. SICAD I is also the rate
used to set airline fares, and selected
transactions such as hard currency sales
by tourists and currency purchases of
Venezuelans going abroad.
The SICAD II rate, which is
theoretically available to both companies
and individuals, carries a rate of about 51
to the dollar.
Maduro did not say what the new
SICAD rate would be, though there is
speculation it could be around 30 to the
dollar. Investors, companies and
individuals will be able to buy and sell
dollars under the third forex mechanism,
a new auction of dollars that will be
under the control of the countrys public
and private brokerages. A similar system
functioned until May 2010 when Chavez
abruptly ended it, saying the auction was
being manipulated by dishonest
brokerages. The new system may absorb
the countrys black market, where the
rate is around 175 to the dollar, or nearly
30 times higher than the official rate.
Maduro provided few details,
including whether PDVSA would be able
to sell its dollars via the new system.
Instead, he said the changes would be
explained in detail in the coming days.
What seems certain is that many of the
goods and services presently covered by
the 6.3 and 12 rates will shift to the new
rate; hence the notion of a stealth
devaluation being executed.
(Left) Maduro addresses the
National Assembly

LatAmOil
page 6
COMMENTARY
Obstacles
Venezuelas complex forex system is
widely regarded as being one of the chief
obstacles to doing business in the
country. Corruption is rampant, delays
are common and the paperwork is
daunting.
The bolivar, at least in the official and
SICAD I rates, is significantly
overvalued. PDVSA has been selling its
revenue from foreign oil sales to the
government at the 6.3 rate, which has
exacerbated the companys financial
crisis.
The government is looking for overcomplicated solutions to a simple
problem: it has not made enough dollars
available to meet demand. This forces
companies and individuals to turn to the
black market, where the rate is soaring
and which in turn stokes inflation.
Venezuelan inflation closed 2014 at a
rate of 64%, creating shortages of
foodstuffs, medicines and spare parts.
The situation is unlikely to improve
while oil prices remain depressed. Oil
revenues account for 95% of the
countrys hard currency income. But the
price of Venezuelas market basket of oil
and petroleum products has fallen by
more than 60% in the last year to US$38
per barrel on January 21. It was US$96
per barrel at the same time last year.
The slide in price has exacerbated the

dollar crunch, raising fears of a possible
debt default later this year and worse
shortages, as the government will likely
cut funds to importers. Maduro recently
returned from his tour of China, Russia
and OPEC countries without any new
credits or loans, meaning Caracas will be
hard pressed to raise dollars to meet
existing obligations.
What next
Oil companies operating in the country
will adopt a wait-and-see approach until
the government releases details of the
new forex systems.
This view is supported by Fernando
Sanchez, vice president of the Society of
Venezuelan Petroleum Engineers, who
told NewsBase: The biggest challenge
right now is that of credibility, he said.
The president gave few details about the
new system. Given the governments
past record, people just dont believe it.
PDVSA was formerly required to sell
all its dollars to the Central Bank at the
official exchange rate. Under previously
announced changes, the national oil
company (NOC) is permitted to sell its
dollars using the SICAD mechanism as
well. This means PDVSA will have more
bolivars for the dollars it sells.
That is fine for covering local
expenses such as salaries, etc, said

Sanchez. But PDVSAs biggest cost is
that of the products it uses. And all of
those are imported. The company has to
import pipe; it has to import cement for
extra deep wells; it has to import basic
materials and instruments.
This is a risk to PDVSA and
international oil companies (IOCs)
operating in the country because
although labour costs may go down in
dollar terms, the cost of everything else
will rise.
NewsBase does not expect the new
forex regime to solve the myriad
problems facing PDVSA and its partners
or indeed Venezuelas wider economic
issues. The rollout of the new system
looks likely to take place over weeks
rather than days, which will exacerbate
shortages and lead to more opposition
demonstrations. The government is also
likely to tinker with its exchange policies
again this year and a full-scale
devaluation is likely if oil prices weaken
further or remain at present levels. This
is a considerable risk to PDVSA and its
partners who are already struggling to
raise production. It is also a notable risk
to Maduro, whose forex tweaking
highlights the desperation of a
government in deep crisis.
US-Mexico swap deal feasible in Q1

Mexican imports of light crude from the
US under a swap programme have
moved a step closer and could kick off
before the end of the first quarter. The
swap deal would mark a major policy
change for Washington, which has kept
oil exports off limits for four decades.
Mexicos state-run oil company Pemex
has already applied for permission to
import up to 100,000 barrels per day of
light crude from the US. The companys
CEO, Emilio Lozoya, said at the World
Economic Forum in Davos that the
programme could start within months of

US approval being granted.
Swaps of crude with the US make
perfect economic sense, Lozoya told
Reuters. As for the timing, he said:
Everything depends on their [the US]
decision. We could start two to three
months after the approval is given. And
within a year or a year and a half ramp it
up to the targeted levels of 100,000
[bpd].
Pemex sources have indicated that the
swap could happen as early as the first
quarter of this year and Mexico could

end up importing much more perhaps
with the US capping exports to the
country at 300,000 bpd.
In December the US opened the door
to ending its four-decade ban on oil
exports, which would potentially allow
Mexico to take advantage of cheap tight
oil gas. The American market is currently
awash with light oil extracted from shale,
which is proving hard to refine.

LatAmOil
page 7

Swapping light crudes for heavier
Mexican oil therefore makes sense for
Washington.
It is a scenario that would also make
financial sense for Mexico, which
already imports about half the gasoline it
consumes. The price of gasoline, which

is set by the government, is an estimated
41% higher in Mexico than it is in the
US.
Mexico has traditionally exported
much of its oil and is betting on its
ongoing energy reform to draw in tens of

billions of US dollars in investment as it
looks to boost production levels that have
been declining for a decade. Output is
currently over 1 million bpd below its
peak of about 3.4 million bpd in 2004.
INVESTMENT
Andes bolsters Colombian

position with IOX purchase
Andes Energia has increased its interest
in Colombia with the acquisition of
Interoil Exploration and Production
(IOX). As the majority shareholder in
IOX, Andes has taken on IOXs
production of 1,571 barrels of oil
equivalent per day, and proven and
probable (2P) reserves of 5.7 million
barrels.
IOXs portfolio is made up of two
production and exploration licences and
one service contract in Colombia. Andes
now has nine producing fields in
Colombia and Argentina. Its net
production has risen to approximately
2,500 boepd and it has 2P reserves to 23
million boe.
"We are pleased to become the
majority shareholder of IOX, which will
allow Andes to increase and diversify its
production and reserve base, said

Alejandro Jotayan, chief executive of
Andes Energia. We are acquiring
current production, which provides
robust cash flow and additional selffunded exploration and development
potential.
Shareholders in IOX agreed the deal at
an extraordinary general meeting in Oslo
after Andes Energia bought a 51% stake
in the Norwegian company. Andes will
appoint four new positions on the IOX
board. Jotayan has taken on the role of
CEO.
Shares in Andes rose by 4% on the
news in London. The junior is also listed
in Buenos Aires.
The deal should end uncertainty over
the LLA-74 exploration contract in
Colombias Llanos Basin. IOX needs to
provide bank guarantees and to appeal

against the National Agency of
Hydrocarbons decision to terminate the
licence. The Cor-6 block has also been
halted.
Andes owns more than 100,000 acres
(400 square km) of Argentinas Vaca
Muerta shale formation. Last month, the
company tested the VG x-1 well in the
Vega Grande oilfield in the Neuquen
Basin in Mendoza Province.
This production test in Vaca Muerta
is a meaningful advance in the
development of our shale acreage, said
Jotayan. It de-risks 30% of Andes' net
acreage in Vaca Muerta, more than
doubling our already de-risked acreage,
and is the first Andes-operated
intervention and production test in Vaca
Muerta.
Pemex outlines cost-cutting plans

The low oil price is the catalyst for a
proposed round of cost cutting at
Pemexs Exploration and Production
(E&P) unit.
Gustavo Hernandez, the head of staterun had ordered 60 billion pesos (US$4
Pemex E&P, said Mexicos finance
ministry billion) worth of budget cuts, or
around 14% of the budget approved by
the legislature in October.
The budget was set when oil prices
were above US$79 per barrel for
Pemexs crude mix. On January 23
Pemexs blend closed at US$38.03 per

barrel, its lowest level since January
2009. A further US$0.08 drop would see
it at the lowest price since September
2004.
Enrique Lozoya Austin, Pemexs
director general, recently revealed that
the companys average lifting price was
US$23 per barrel, meaning that its core
oil production and export business
remains in profit.
This is an important point as Mexico
looks to attract investment in oil E&P as
part of the countrys energy reform.

Pemex is farming out its more
challenging assets via joint ventures with
private companies, including deepwater
projects that have yet to produce any oil.
The company is eager to reassure
potential investors that there is still
money to be made despite the bearish
price environment.
In related news, Pemex has been
cutting outsourcing contracts.

LatAmOil
page 8
INVESTMENT
Oceanografia, which was taken into
receivership by the government at the
start of last year, lost 25 of the 27
contracts it had held with the state-run
company. Oceanografia collapsed
suddenly after fraud was discovered in its
loan guarantees. The government stepped
in because a default on some of its

contracts would have brought Pemexs
offshore operations responsible for
more than half its 2.35 million barrels per
day of crude production to a standstill.
Since then, Pemex has had the time to
restructure its process so that it no longer
relies so heavily on the company. The

company has also allowed contracts with
oil well services company Protexa to
expire ahead of the anticipated influx of
private suppliers in the post-reform
market.
PERFORMANCE
Price crash creates downstream

uplift for Petrobras
The oil price collapse has given
Petrobras downstream operations a lift.
Subsidised fuel prices are expensive for
the state-run Brazilian company when oil
prices are high. However, the fall in price
has not been passed on to Brazilian
motorists, meaning gasoline at the
countrys pumps is now 69% more
expensive than abroad, with diesel 53%
higher. This is worth around US$1.12
billion extra per month to Petrobras, said
a study carried out by CBIE, a local
consultancy. Two thirds of the boost will
come from diesel, with the rest deriving
from gasoline sales.
Fuel prices in Brazil are set by the
government, which must authorise any
increase or decrease. Until the recent
price drop the government held domestic
prices below international rates in a bid
to contain inflation. This meant Petrobras
lost money when selling imported petrol

and diesel.
The dynamic has reversed now, with
the government apparently happy for
motorists to subsidise the rebuilding of
Petrobras finances. The company has
stepped up imports of refined products in
order to take advantage of the price
differential swinging in its favour. The
company has raised imports of gasoline
from 34,000 tonnes in May 2014, when
oil cost US$105 per barrel, to 249,000
tonnes in December, when the cost of a
barrel was just US$50.
It is not all positive news for Petrobras,
however. The price crash has forced a
wave of retrenchment at the company,
with some of its projects poised to
become loss-making if prices remain
low. The company is expected to
announce investment cuts as it seeks to
restore confidence in its financial health.

Up to 30% of spending could be gutted
from its rolling US$221 billion five-year
investment plan. The company is also
preparing to write down the value of a
string of refineries at the centre of the
multi-billion dollar corruption scandal
that has engulfed it in recent months.
The write-down could amount to as
much as US$4 billion, which as well as
the refineries would include two gas
pipelines.
Details are anticipated when Petrobras
finally releases its third-quarter results.
These are due to be signed off this week
after a delay of several months caused by
the companys auditor
PricewaterhouseCoopers refusing to
certify results in light of the corruption
allegations.
Colombian oil output forecast to fall

Oil companies in Colombia have warned
that production will fall this year in
response to oil price crash. The decline
should become apparent next year and
continue until the oil price recovers or
the government provides support to
producers.
"Starting in 2016, a steady slowdown
in the country's crude production is
expected. By 2018, this could end up
meaning a reduction of 220,000 barrels
per day," said the president of the Oil

Producers Association (ACP), Francisco
Lloreda.
The country produced 1.007 million
barrels per day in December, according
to Energy Ministry data. The ACP
anticipates this years production will be
1.02 million bpd before falling to
900,000 bpd in 2016.
The ACP has placed caveats to its
predicted increase in 2015 output. For
this to occur, it would require "no attacks

on oil operations, no community
blockades, no delays in environmental
permitting, and no major fall in the oil
price in the second quarter.
The government and ACP are
discussing measures, such as faster tax
rebates, to ease the impact of the oil price
collapse on producers.

LatAmOil
page 9
PERFORMANCE
Colombias producers also expect to
draw in their seismic exploration to
14,000 square km in 2015 from 32,000
square km last year. State-run Ecopetrol
has shaved a third off this years
exploration budget in comparison to
2014. Exploration spending this year has
been slated at US$503 million.
"To the extent you explore less,
unfortunately this is going to adversely
affect the incorporation of oil reserves,
which is essential for the country," said
Lloreda. Colombia had estimated
reserves of 2.377 billion barrels at the

end of 2014, according to US Energy
Information Administration (EIA) data,
which would be sufficient for
approximately seven years production at
current drilling rates.
The ACPs approximately 80 members
plan to step up drilling of exploratory
wells from 113 in 2014 to 126 this year.
This improvement remains below the 230
wells the ACP believes are required to
maintain reserves at their current level.
Furthermore, drilling plans could be
revised if the oil price remains subdued.

The oil industry plays an important
role in Colombias economy. A US$1
drop in the price of oil equates to a 300
billion peso (US$123 million) fall in
income for the countrys budget.
"If the price of crude stays at US$50
per barrel, that would mean a 15 trillion
peso (US$6.2 billion) decline in revenue
for Colombia," Lloreda was quoted as
saying by Latino Fox News.
POLICY
Argentina offers incentives

to spur oil production
Argentina launched an incentives
programme last week to encourage
companies to sustain oil production in
the face of dwindling prices.
We must all do our bit to continue on
the path to energy self-sufficiency,
Economy Minister Axel Kicillof said at a
meeting with producers, union bosses
and governors of oil-producing
provinces. He said that if companies

maintained or increased production
compared with their output statistics
from the fourth quarter of 2014, they
would be awarded a subsidy of US$3 per
barrel in addition to what they receive on
their sales.
For oil shipped abroad, the subsidy
would be US$2 per barrel if the producer
sustained exports at 2014 levels and

US$3 per barrel if they achieved an
increase, Kicillof said.
The incentives are designed to
encourage companies to continue
investing in rebuilding oil production that
has slumped by 37% to 530,000 barrels
per day from a record 847,000 barrels per
day in 1998 on weak exploration, limited
finds and maturing reserves.
Many companies reined in investment
after the government started controlling
prices at low levels to spur consumption
and make industrial production more
competitive. Yet after energy shortages
started to hit in 2004, Buenos Aires
amended its price controls, allowing
them to rise with the aim of recovering
the energy independence it lost from the
late 1990s and early 2000s.
This has spurred a recovery, with some
companies like YPF boosting output. The
state-run company raised its oil
production by 8.7% year on year in 2014.
Yet with oil prices down by more than
50% since June 2014, the governors of
oil-producing provinces have expressed
concerns about sagging tax revenue and
job losses in the sector as companies
slow exploration and production.

LatAmOil
page 10
POLICY
Announcing the new incentives,
Kicillof said the state was doing what
must be done so the oil industry doesnt
shrink.
The government already has set prices
at between US$63 and US$77 per barrel

for the domestic market in a bid to
sustain drilling activity, and it has cut to
1% from 33% the tax on oil exports to
keep exporters active. We dont want
any drilling rig to come out of activity,

Kicillof said. Our main goal for this
year is to sustain the activity and
production of the sector.
Maduro moots petrol price increase

said he was considering raising the price
of gasoline as Caracas looks to close a
growing fiscal deficit exacerbated by the
oil price crash.
Vice President Jorge Arreaza is to
present the governments proposal to the
National Assembly at a later unspecified
date, whilst government officials will
also meet with representatives from the
transport sector, Maduro said.
He gave no indication what the new
price might be. At US$0.01 per litre,
Venezuelas heavily subsidised gasoline
is the cheapest in the world. Maduro said
that any new price should cover the cost
of production.
PDVSAs former president Rafael
Ramirez repeatedly said the subsidy cost
the state-run oil company about US$12
billion per year.
Maduro has been toying with a
possible price hike since early 2014. He
withdrew the proposal after the countrys
opposition criticised any increase,

demanding a full accounting of the
governments budget and calling for an
end to oil giveaways to Cuba and other
allies before raising petrol prices.
Venezuela has not raised domestic
gasoline prices in nearly 18 years, which
means they could rise by up to 30 times
if the government is serious about
addressing the worsening deficit.
The low cost of gasoline has come under
greater scrutiny, especially as
consumption of the fuel soars and
Venezuelas refining capacity is
squeezed after a series of accidents at its
four main domestic refineries. An August
2012 fire and explosion at the Amuay
refinery left more than 40 dead.
Production at the plant still has not
recovered to pre-accident levels, leading
Venezuela to increase imports of
gasoline and gasoline components from
the US and other overseas suppliers.
PDVSA has to pay international prices
for such imports and then effectively

gives the fuel away at the pump.
Maduros remark that prices could rise
looks like a political gambit designed to
see how the public react to the proposal.
Fuel price rises are controversial in
Venezuela and can lead to rioting, as was
the case in 1989, when hundreds of
people died.
When Maduro made a similar proposal
last year, the countrys military warned
him not to, citing the threat of violent
protests that an increase might spark.
Although such a move makes
economic sense and would help
Venezuela to balance its books,
NewsBase remains wary that price rises
will occur soon. Maduros approval
rating is now around 25%, and with
congressional elections looming later this
year, the president and his party may be
reluctant to take a controversial step that
would cost them votes.
Qatar cited as potential

downstream investor in Venezuela
Qatar could help finance the construction
new refineries for state-run PDVSA,
said last week.
The president, who visited Qatar
earlier this month, said that several
unidentified Qatari Banks had tentatively
offered funding. He did not give details
about possible project financing.
PDVSAs shaky finances have delayed
the construction of three new domestic
refineries, plus upgraders for the
companys extra heavy oil joint ventures.

The three new domestic refineries
Cabruta (400,000 barrels per day
processing capacity), Batalla de Santa
Ines (50,000 bpd) and Caripito (50,000
bpd) have been under consideration for
the last decade but their construction has
been delayed repeatedly.
PDVSA wants to complete them to
increase the value of its petroleum
exports. The company has six domestic
refineries but many have been in use for
more than 50 years and require

considerable maintenance in order to
function.
Accidents and shutdowns are common.
In August 2012, PDVSAs Amuay
refinery was hit by a fire and explosion
which killed more than 40 people and
shut down large parts of the plant. The
fire occurred because of poor
maintenance and insufficient spending on
safety procedures.

LatAmOil
page 11
POLICY
Both the El Palito and Puerto La Cruz
plants are often shut down as well,
especially during the rainy season when
thunderstorms can result in lightning
strikes.
PDVSA also needs upgraders to strip
coke and minerals out of its extra heavy
crude. These units are necessary for the
company to boost output from heavy oil
belt, or Faja. The upgraders prepare the
oil, which has the viscosity of tar, for
traditional refining.
Each upgrader carries a price tag of
several billion US dollars, depending on
its size and specifications. Although

PDVSA has pledged to boost output
from the Faja, the lack of upgraders is
undermining its plans.
The lack of upgraders has also forced
PDVSA to import light crude from
Algeria, Russia and others to mix with its
extra heavy crude as a diluent.
NewsBase expects Qatari banks to be
reluctant to advance PDVSA funds to
invest in its refineries without concrete
promises that the government will not
hijack the money to finance its social
programmes or cover current account
expenditures. PDVSA would also

struggle to pay back the banks, unless
they accepted oil in lieu of cash.
Qatar has a negligible presence in the
South American country. Companies
from the emirate previously considered
investing in Venezuelas offshore natural
gas fields, but such plans never came to
fruition. NewsBase believes the proposed
refinery funding could suffer the same
fate. Maduros announcement appears to
be political window-dressing rather than
a pre-cursor to meaningful foreign direct
investment.
YPF prepares Chaco-Parana

Basin exploration plan
Argentinas state-run YPF is gearing up
to launch new exploration work in the
Chaco-Parana Basin in the province of
Chaco.
YPFs director of new exploration,
Ricardo Caligari, met with
representatives from the Chaco
provincial government to present his
companys plans last week. The meeting
followed the signing of an agreement by
YPF and the province on December 10
that paves the way for the exploration of
a 670,000-square km area in the basin.
The plan will now be sent to the
provincial legislature for a vote.
Though few specifics have been made
public, Marcos Verbeek, Chacos
minister for infrastructure and public

services, said: Exploration work in the
province will take place, to begin with, in
areas of Las Brenas and Charata. It
should be noted that it is possible that
YPF may request permission from the
province to conduct research in other
areas of Chacos territory.
The YPF-Chaco agreement will begin
with the processing of a significant
amount of pre-existing 2-D seismic data
from the Chaco-Parana Basin, as well as
the acquisition of new gravimetric data.
YPF also said it would apply surface
gas analysis techniques and study in
detail the columns from the seven
boreholes drilled in the province.
The Chaco-Parana Basin spans

northeastern Argentina, as well as
sections of Paraguay, southern Brazil and
eastern Bolivia.
The initiative falls under YPFs
Argentina Exploration Plan, which is
being spearheaded by the companys
CEO Miguel Galuccio. The plan is
designed to reverse the countrys
declining oil and gas output through the
aggressive exploration and development
of new resources, including the Vaca
Muerta shale play.
The Chaco plan falls under the
category of Frontier Explorations.
GyP, Wintershall to start

Argentina shale drilling in March
Gas y Petroleo del Neuquen (GyP) is to
launch a shale exploration project with
Germanys Wintershall in March.
GyP, the state oil company of the
province of Neuquen, said the companies
would drill six wells two vertically and

four horizontally. The wells are to be
sunk to establish the commercial
potential for tight oil and shale gas
production at the Aguada Federal block
in the province, which is home to the

Vaca Muerta shale play.
GyP said the drilling programme
required intensive investment, without
specifying how much would be spent.

LatAmOil
page 12

Initial reports suggested
investment of US$100 million
would be necessary to sink the six
wells. A subsequent 30-well
production pilot would start in 2016
with spending of US$150 million. If
successful, the next phase would be
to move the project to mass
production, which would involve
drilling 320 wells over ten years and
investment of around US$3.3
billion.
GyP, which has rights to the
block, farmed in Wintershall as the
operator in a 50-50 partnership. The
companies are to target a 97-square
metre area of the Vaca Muerta,
which has already attracted major
investors such as US super-major
Chevron. It is working with state-run
YPF to produce oil and gas from the
shale play. Together they produced
35,000 barrels per day in the fourth
quarter of 2014, most of which was light
crude.
Such progress has enticed others to

follow, such as Malaysias Petronas and
now Wintershall.
GyP says that since signing the deal
with the German operator it has been
laying the groundwork for financing the
project. A key component, it

said, has been a deal it signed
with YPF to swap its shares in
two blocks with shale potential
for six blocks with conventional
production that were previously
owned by the state-run firm. As
of January 1, GyP said it had
been generating revenues of
US$116,000 per day from the
sale of about 500,000 cubic
metres per day of gas. This has
provided a positive cash flow for
the company. GyP also secured
US$41 million in cash and
US$41 million in bonds from
the YPF swap.
GyP said its next step would
be to push forward on separate
shale production pilots with Royal Dutch
Shell and Total, which required a
combined US$500 million in spending.
GyP has also found tight oil and shale
gas at another project in the Vaca Muerta
play in conjunction with ExxonMobil.
Americas Petrogas brings

four Neuquen wells on line
Toronto-listed independent Americas
Petrogas has provided a production
update on the four appraisal wells it
drilled last year in its Medanito Sur
Block in Argentinas Neuquen Basin.
Average oil production at the Medanito
Sur block, which is fully operated by
Americas Petrogas, reached close to
1,440 net barrels per day after the four
appraisal wells came on line, the
company said. This represents nearly
double the average volume produced
from the block in the third quarter of last
year.
Three of the wells were drilled to
assess an extension of the El Calden Este
site on the Cuyo formation. During initial
testing, the first well drilled at this
location produced, by natural free flow,
an estimated rate of 232 bpd of 33 degree
API light crude on a two-inch [50.8-mm]

open choke with no wellhead pressure,
the company said. El Calden Este is a
conventional block located on the
Neuquen Basins eastern flank. The
fourth well, drilled over the northern
section of the El Jabali conventional field
in the Tordillo formation, was for the
same assessment purposes.
Argentine regulators have set a price of
US$77 per barrel for Medanito light
crude, the type of oil produced in
Americas Petrogas areas, for the first
quarter of 2015. Companies working in
Argentina are insulated from global
markets, as the federal government
artificially dictates the price of oil in the
country. The policy was put in place to
keep prices at the pump low for
consumers.
Following the announcement Americas

Petrogas shares were up 8.1% on the
Toronto Venture Exchange after losing
90% of their value over the past 12
months. The company owns both
conventional and shale and tight sands
oil and gas in the Neuquen Basin in
Argentina, and works with joint venture
partners that include US super-major
ExxonMobil and Argentinas stateowned YPF.
In December the company said
Neuquen Province had granted it a fouryear evaluation period, which is due to
end in the second quarter of 2018, for the
Los Toldos I, II, III and IV blocks in the
Vaca Muerta shale formation. The
company will drill two wells in Blocks I
and II and acquire 200 square km of 3-D
seismic for Blocks III and IV.

LatAmOil
page 13
BPZ pushes ahead

at Perus Block Z-1
BPZ Energy announced last week that
initial output from its Albacora A-27D
development well in Peru averaged
approximately 1,135 barrels per day of
oil.
Associated gas is being re-injected into
the well, which is located at the offshore
Block Z-1, given the lack of a local
market for the fuel, Houston-based BPZ
said.
The well is producing better than
previous recent wells owing to
additional pay opened in the Lower
Zorritos sands, the firm added.
Given the promising results at A-27D,
BPZ said the new Albacora A-22D
development well was spudded in midJanuary. The targeted measured depth of
the A-22D well is 14,445 feet (4,400
metres) and results are due in April.
In addition, the nearby Corvina CX15-
8D development well is currently being

completed, with results expected next
month, BPZ said.
The firm has a 51% working interest in
Block Z-1 with its joint venture partner
Pacific Rubiales Energy, which holds the
remaining 49%.
In June, BPZ indicated it intended to
increase its exploratory drilling campaign
at the Albacara field. In November, it
said the companys current development
plan was to work on three Albacora wells
and three Corvina wells.
Crude production at offshore Block Z1 has doubled to about 6,000 bpd since
Pacific Rubiales bought a stake in 2012,
the Canadian firm said last year.
BPZ has licence contracts covering 1.9
million net acres (7,689 square km) in
four blocks located in northwest Peru.
Operations at these blocks are at various
stages, from early exploration to

production. The Corvina and Albacora
fields are the firms core producing
assets.
Along with Block Z-1, it has 100%
working interests in onshore Blocks XIX,
XXII and XXIII in Peru, which cover a
total area of 1.6 million acres (6,475
square km).
In November BPZ awarded a contract to
T-Rex Engineering and Construction to
build two drilling platforms for the
Delfin and Piedra Redonda prospects in
Block Z-1. The platforms are due to be
installed by the middle of 2015.
Peruvian oil production last November
climbed by 9.2% year on year to 69,900
bpd, according to the latest monthly data
from Perus national oil and mining
society.
NEWS IN BRIEF
POLICY
Price risk for T&T
There are no guarantees major projects in
the energy sector will continue given
fluctuating oil prices, chairman of the
Energy Chamber and president of BHP
Billiton T&T Vincent Pereira said. He
said major global oil and gas companies
were cutting their capital investment
budgets and cancelling major projects.
So far, the major projects in T&T have
not been impacted but with expenditure
constantly under review there is no
guarantee that this will remain the case,
Pereira said. Only sustained investment
in upstream gas delivery every year, will
allow us to deliver the 4 bcf of gas per
day that is required, he said.
GUARDIAN T&T, January 27,
2015
New Venezuela forex

platform to free float
A new foreign exchange platform for
Venezuela to be created as part of the
three-tiered currency control system will
have a free-floating exchange rate, local
media reported, citing the countrys
planning minister. President Nicolas
Maduro this week announced plans to
change 12-year-old currency controls by
turning the government-run auction
system known as Sicad II, which
provides the weakest of the three rates,
into a new platform operated by
brokerages.
It will be an open market and the vision
is ... that there will be a free floating
(exchange rate) through public and
private brokerages, said Planning
Minister Ricardo Menendez.
REUTERS, January 23, 2015
COMPANIES
Gran Tierra reports
output of 25,000
boepd
Gran Tierra Energy, a company focused
on oil exploration and production in
South America, provided an operations
update. Oil and natural gas production
from continuing operations averaged
approximately 25,200 boepd gross
working interest in 2014, or
approximately 19,300 boepd net after
royalties before adjustment for inventory
changes and losses, or approximately
18,500 boepd net after royalties adjusted
for inventory changes and losses.
Approximately 99% of the 2014
production is oil, with the balance
consisting of natural gas.
INSIDE TRADE, January 26, 2015

LatAmOil
page 14
NEWS IN BRIEF
YPFB head dies amid
corruption scandal
The CEO of Bolivian state oil company
YPFB has died from cardio-respiratory
arrest at a clinic in Santiago, President
Evo Morales said. Carlos Villegas died
nearly three weeks after undergoing
surgery for cancer of the oesophagus.
Its a huge loss. An honest man, hard to
replace, Morales said.
Villegas was in an induced coma for
several days after the operation in Chile,
where he travelled on January 1 amid
allegations of corruption involving him
and former official Selva Camacho.
Camacho, who is under arrest, worked as
Villegass top communications and
public affairs assistant.
LATINO FOX NEWS, January 25,
2015
Shell set to offload

Brazil fields after
price rout
Shell, the second-largest oil operator in
Brazil, is selling a stake in one of its
crude-producing projects in the country
to HRT, according to a regulatory filing.
HRT, based in Rio de Janeiro, agreed to
buy Shells 80% stake in the Bijupira and
Salema fields, an offshore venture that
started production in 2003, according to a
Brazil filing. HRT will boost output to
more than 30,000 bpd, and also is buying
the FPSO Fluminese ship. The
acquisition will be financed by HRTs
first bond sale and a loan led by a
Glencore unit. HRT did not provide a
purchase price.
Oil companies are retreating from highcost projects and selling assets across the
globe as crudes seven-month slump of
more than 50% erodes profit. This
month, producers including Statoil,
Tullow Oil and Premier Oil have delayed
projects or cut exploration spending. For
Shell, declining output in Brazil as
reservoirs fade has increased the cost of
extracting the remaining crude.
The deal is the second Brazilian asset
sale in a year for the Hague-based
company after agreeing to sell 23% of
the Parque das Conchas project to Qatar

Petroleum International for about US$1
billion. Shell completed US$11.6 billion
in divestments in the first nine months of
2014 as it seeks to rein in costs, the
company said October 30.
BLOOMBERG, January 20, 2015
PetroRio buys
Bijupira and Salema
field stakes
PetroRio, the new brand of HRT
Participacoes em Petroleo has purchased
80% of the rights and obligations of the
concession contracts for the Bijupira and
Salema Fields with Shell Brasil Petroleo
and Petrobras holding the remaining
20%. The transaction also involved the
acquisition of, among other assets, the
ship FPSO Fluminense, used in the
production process of both fields, with
storage capacity for 1.3 million barrels of
oil. Only upon approval from the
regulatory agencies, the company will
become the operator of the fields.
With this transaction, PetroRio will
become one of the largest independent
producers in the country, operating an
average of more than 30,000 bpd of oil.
This represents a three-fold increase in
current production and positions
PetroRio as one of the most important
emerging companies in Brazils oil
industry.
PETRORIO, January 21, 2015
Former party leader

targeted by
Petrobras
investigators
Former president Luiz Inacio Lula da
Silvas ex-chief of staff has come under
scrutiny from prosecutors investigating a
massive kickback scandal at Brazils
state oil giant Petrobras, local media
reported. Jose Dirceu, Lulas onetime
right-hand man, was convicted in 2012
and sentenced to more than seven years
in prison for a corruption scandal
involving payoffs to Brazilian
lawmakers.
Globo television network reported that
investigators determined three
construction companies implicated in the

separate US$4-billion Petrobras scandal
made US$1.3 million in payments to a
consulting firm Dirceu owned with his
brother. The construction companies,
Galvao Engenharia, OAS and UTC
Engenharia, are suspected of being part
of a cartel that made under-the-table
payments to Petrobras directors in return
for lucrative contracts.
President Dilma Rousseff chaired
Petrobras from 2003 to 2010, coinciding
with a period the kickbacks were being
taken. She denies any knowledge of the
scheme.
AFP, January 24, 2015
Rex completes
drilling in Colombia
Rex International has announced its
98.4%-owned licence-holding company
Caribbean Rex has completed the drilling
of three wells in the South Erin Block in
Trinidad & Tobago. The wells were
drilled as part of a three-well drilling
programme that Caribbean Rex started in
the South Erin licence in May 2014.
Oil-bearing sands were encountered in all
wells, two of which are deemed to be
commercial with substantial net pay
sands. Caribbean Rex will consider
putting the wells on production as soon
as testing has been completed and
approvals have been granted.
RIGZONE, January 20, 2015
Ivanhoe trims
Ecuador activities as
partnership stalls
Canadas Ivanhoe Energy is to scale back
its activities in Ecuador. Lower oil prices
and a delay in discussions with its partner
on moving ahead with plans at the Block
20 heavy-oil project are behind the
companys decision. Block 20, located
201 km southeast of Quito, contains the
Pungarayacu oilfield, which holds an
estimated 4.5-7 billion barrels of oil in
place. Ecuadors state-run oil company
Petroproduccion drilled 26 wells in the
field during the 1980s.

LatAmOil
page 15
NEWS IN BRIEF
Since 2008 Ivanhoe has operated the
field, however it has experienced
technical difficulties caused by the heavy
nature of the oil.
Ivanhoe previously enlisted an unnamed
national oil company to review Ivanhoes
investment in Block 20, the Canadian
firm said. This resulted in an agreement
in principle, which was still subject to the
approval of the Ecuadorian government,
for the national oil company to farm in to
the project as the majority partner and
operator of Block 20.
Ivanhoe and the national company
presented a joint proposal to the
Ecuadorian government in March of last
year. In mid-May, the Ecuadorian
government said it was ready to move
forward with final project negotiations.
However the NOC, which had initially
expected to complete its internal review
by the end of the third quarter of last
year, has since told Ivanhoe that the
sharp decline in oil prices and other
factors have delayed its review, making a
final decision to proceed with Block 20
not possible at this time, Ivanhoe said.
IVANHOE, January 26, 2015
Moodys assigns A3
rating to Pemexs
US$6-billion notes
Moodys Investors Service has assigned
an A3 global local currency rating to
Mexicos Pemex upcoming issuances
US$1.5 billion 3.5% senior unsecured
notes due 2020, US$1.5 billion 4.5%
senior unsecured notes due 2026, and
US$3 billion 5.625% senior unsecured
notes due 2046. Proceeds will be used to
finance capital investments. The rating
outlook is stable.
The ratings are based on Moodys view
that despite the significant changes
arising from the new energy law, Pemex
will remain closely linked to the
government of Mexico, which will
continue to provide strong support, given
the companys importance to the
governments budget, to the oil sector
and to the countrys exports. In the short
to medium term, Moodys does not
expect any material reduction in Pemexs
tax burden and its debt amount is likely
to rise to fund higher capital

expenditures. However, its managerial
and budgetary autonomy will increase,
improving its efficiency.
Pemexs underlying baseline credit
assessment (BCA) at ba1 is based on
prospects of stable production and
reserves over the medium-term, as well
as Moodys outlook that continued high
government taxation in conjunction with
the companys higher capital spending
will lead to higher debt levels and
financial leverage. For these conditions
to materially improve, the government
will have to increase other sources of
revenues and reduce the call on Pemexs
earnings, and the company will have to
increase production and earnings from
new investments and joint ventures with
new industry entrants; this process will
be a gradual one.
MOODYS, January 25, 2015
Pemex sustains
profits despite price
plunge
Despite a plunge in oil prices, Mexicos
Pemex is holding out as one of the
worlds most profitable oil companies
thanks to low production costs, Excelsior
newspaper reported. The state oil
company is continuing to pull a profit at
mature, onshore and shallow water
projects even though Mexican oil prices
have dropped 63% to US$38 per barrel
from US$102 in June 2014, Pemex data
shows.
This is largely because Pemex is
producing at US$9.25 per barrel at its
mature fields, leaving a healthy profit
margin. Onshore costs are running at
US$10.67 per barrel, and in shallow
waters US$13.39. Pemex has not altered
its investment plan for this year, even as
many companies around the world make
cuts. Pemex plans to invest US$27.3
billion this year.
EXCELSIOR, January 26, 2015
PDVSA set for cash

injection
Citgo Petroleum is planning to raise
US$2.5 billion and transfer the funds to
its cash-strapped corporate parent, stateowned PDVSA, according to a person

with knowledge of the matter. The US oil
refining and marketing unit of PDVSA is
seeking to sell US$1.5 billion of bonds
and obtain a US$1-billion loan,
according to the person, who asked not to
be identified.
While Citgos debt ratings were cut to six
levels below investment grade by
Moodys Investors Service, it is three
steps higher than the governments. The
government said in October that it had
scrapped a plan to sell the Houston-based
company.
BLOOMBERG, January 20, 2015
PDVSA debt grows

adding pressure on
servicing
Venezuelan state oil company PDVSAs
consolidated financial debt rose 6.3% in
2014 compared with the previous year to
reach US$46.2 billion, the company said,
a figure that does not include debts to
providers. PDVSA this year will have to
pay some US$6 billion in debt service
and around US$5.5 billion in 2016,
according to analysts, boosting pressure
on its finances amid a tumble in crude
prices.
The figures did not include new details
on its debt to contractors. PDVSAs trade
accounts payable, an indicator of debts to
service providers, in 2013 rose 28% to
reach US$21.4 billion.
OIL
IMF says Bolivia can
weather weak oil
According to the International Monetary
Fund, Bolivia can weather the impact of
the fall in international oil prices
although it will affect economic growth
this year. According to the document, the
decline in crude oil prices will also affect
the growth perspectives in Bolivia,
Colombia and Ecuador, La Razon
reported, citing AFP.

LatAmOil
page 16
NEWS IN BRIEF
According to the IMF the fiscal
balances will suffer due the reduction in
oil income ... But the initial positions are
sufficiently solid to weather the impact.
LA RAZON, January 22, 2015
Mexican oil
production declines
for tenth year
Mexicos state oil company Pemex said
its oil production fell in 2014 compared
with 2013, stretching the decline to a
10th consecutive year, El Universal
newspaper reported. The company
extracted an average of 2.43 million bpd
in 2014, down 28% from a record 3.38
million in 2004.
In 2014, output dropped 3.7% from 2.52
million in 2013, according to company
data. The production last year was the
lowest since 1986, when it averaged 2.41
million bpd.
EL UNIVERSAL, January 20,
2015
Optimism that
Petrotrin will recover
with oil price
Petrotrin chairman Lindsay Gillette is
optimistic the company will turn around
within the next 12 months since global
projections show oil prices will rally
between US$65 to US$75 this year.
Gillette said he hopes oil regains its
US$60 per barrel US$70 per barrel
(price) on international markets. If that
occurs then we could start coming back
to some sort of normalcy, he said.
Gillette admitted that even if prices rally
Petrotrin still faces other challenges,
including the impact of shale oil and
shale gas in the United States and other
geo-political issues affecting energy.
T&T GUARDIAN, January 22,
2015
Latest LGO well

keeps up success
LGO has announced that its most
recently completed well, GY-669, at the

Goudron Field in Trinidad was
perforated on January 23 in the C-sands
and is now flowing at a stabilised, but
highly restricted, rate of 365 bpd of 41
degree API water-free oil through a
10/32-inch choke with an average wellhead flowing pressure of 1,900 psi.
Over the last 48 hours the well has
flowed at an average rate of 445 bpd. The
initial calculated open-hole flow rate of
the well is approximately 1,000 bpd.
LGOs chief executive Neil Ritson said:
Preparations for the 2015 drilling
campaign at Goudron are now well
underway.
OIL AND GAS TECHNOLOGY,
January 26, 2015
Venezuelas oil
exports fall
Venezuelas oil exports fell to 2.33
million bpd in 2014, from 2.43 million
the previous year, Oil Minister Asdrubal
Chavez said. Production averaged 2.9
million bpd last year, he added. OPEC
member Venezuela, which is reeling
from the plunge in global crude prices
since mid-2014, is counting on joint
ventures in the heavy-crude Orinoco
region to boost output in future years.
Production from the Orinoco Belt should
rise to 1.37 million bpd by the end of
2015 from an average of 1.25 million last
year, Chavez said. Right now were at
1.3 million a day.
Low oil price to hit

Venezuela hardest
Venezuelas economy will decline more
than any other in the region as a result of
the drop in oil prices, analysis from the
International Monetary Fund found. The
Central Bank of Venezuela in December
said the collapse in oil prices was in part
to blame for a 2.3% drop in third quarter
gross domestic product.
That marked three straight quarters of
decline for the OPEC member and a
formal slip into recession. Oil prices have

dropped more than half since June and
are down 20% since the Central Banks
announcement.
UPI, January 22, 2015
GAS
Petrobras TPO start
up gas plants to
prevent blackouts
Despite denying that there is a lack of
energy in the country, Minister of Mines
and Energy Eduardo Braga has said that
Petrobras will restart some of its thermal
power plants by February 18 to
complement energy supply for the
southeast. The plants were closed for
preventive maintenance and will return to
the system earlier than planned. Energy
from these plants is more expensive and
their use is likely to add to electricity
bills, which already account for a total of
US$8.8 billion.
Measures will also be taken to increase
energy transfer from the Itaipu dam. In
total, the southeast will receive another
1,500 MW. According to Braga, the aim
is to guarantee supply until the problem
in the North/South line, one of the causes
of recent power cuts in 11 states as well
as Brasilia, is completely resolved. Of
Petrobras 22 power stations, 16 are
reportedly suffering problems.
FOLHA, ESTADO, January 21,
2015
Work to expand
Camisea pipeline to
begin in early 2016
Work to expand the Camisea pipeline,
which is operated by Transportador de
Gas del Peru, will begin in the first
quarter of 2016. The expansion will
make it possible to increase the amount
of natural gas sent to Lima from 314
mcfd to 450 mcfd, according to Energy
and Mines Minister Eledoro Mayorga.
ANDINA, January 19, 2015

LatAmOil
page 17
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Issue 548

Venezuelas tweaking of its forex system highlights a government clutching at

Germanys Wintershall is to launch a shale exploration project with GyP in

Mexico managing price slump as tenders

Currency controls confirm crisis for

PIPELINES & TRANSPORT

US-Mexico swap deal feasible in Q1

Andes bolsters Colombian position with

Pemex outlines cost-cutting plans

Price crash creates downstream uplift for

Colombian oil output forecast to fall

Argentina offers incentives to spur oil

Maduro moots petrol price increase

Qatar cited as potential downstream

YPF prepares Chaco-Parana Basin

GyP, Wintershall to start Argentina shale

Americas Petrogas brings four Neuquen

BPZ pushes ahead at Perus Block Z-1 13

27 January 2015, Week 04

Mexico managing price

already been authorised access to the

Mexican Deepwater Production Forecast

Source: NewsBase Research Global Oil Forecast

boost production that has been flagging

Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

27 January 2015, Week 04

fields in the north are more likely to be

related infrastructure, petrochemicals and

Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

27 January 2015, Week 04

Currency controls confirm

banker, who spoke on condition of

cover their operating needs is currently

Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

27 January 2015, Week 04

The slide in price has exacerbated the

expenses such as salaries, etc, said

PIPELINES & TRANSPORT

US-Mexico swap deal feasible in Q1

programme could start within months of

quarter of this year and Mexico could

Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

27 January 2015, Week 04

PIPELINES & TRANSPORT

consumes. The price of gasoline, which

ongoing energy reform to draw in tens of

Andes bolsters Colombian

production and reserve base, said

provide bank guarantees and to appeal

Pemex outlines cost-cutting plans

Pemexs blend closed at US$38.03 per

part of the countrys energy reform.

Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

27 January 2015, Week 04

in because a default on some of its

relies so heavily on the company. The

Price crash creates downstream

lost money when selling imported petrol

restore confidence in its financial health.

Colombian oil output forecast to fall

per day," said the president of the Oil

this to occur, it would require "no attacks

Have a question or comment? Contact the editor Ryan Stevenson (ryans@newsbase.com)

27 January 2015, Week 04