Bolivia to extend Morales era: Correction
Corrects status of Acron.
Allegations of electoral fraud in gas-rich Bolivia appear unlikely to gain traction as longtime president Evo Morales prepares for a fourth term.
According to the latest vote tally issued last night, Morales secured a narrow outright victory over his chief rival, former president Carlos Mesa, in 20 October elections.
Morales, one of the few remaining regional allies of Venezuela's president Nicolas Maduro, rejected charges of vote tampering and international demands for a run-off, arguing that failure to recognize his victory amounts to a political coup. Protests broke out in Santa Cruz and other cities.
Morales' next five-year term begins in January 2020.
Despite Morales' populist rhetoric, his long tenure has delivered a stable operating environment for the natural gas and minerals sectors, and the president has a pragmatic relationship with the private sector.
One of his first moves after taking office in 2006 was the quasi-nationalization of hydrocarbons, putting state-owned YPFB in charge of joint ventures. But the move did not scare off oil companies. Between 2007 and 2018, Brazilian state-controlled Petrobras invested $2.1bn, Spain's Repsol $1.7bn and France's Total $1.4bn, according to YPFB data.
Bolivia currently has 10.7 trillion cf of gas reserves, but output shrunk to 45.5mn m3/d in July from 53.2mn m3/d a year earlier. Five Repsol-operated blocks account for about half of production.
Repsol chairman Antonio Brufau was in Bolivia early this month to sign a deal to study how Bolivia can sell more gas to neighboring Brazil, where domestic gas supply is rising quickly, displacing Bolivian pipeline supply.
Argentina, the other destination for Bolivian gas, is developing its domestic shale reserves that reduce its need for pipeline imports as well. YPFB is hoping to build a 600km gas pipeline to Paraguay to diversify away from its shrinking Brazilian and Argentinian markets.
Russia has had a commercial presence in Bolivia for years, but investment is limited so far. The Russian embassy in La Paz says Gazprom intends to invest at least $2bn in gas blocks in Bolivia. And Russian fertilizer company Acron reached a deal with YPFB shortly before the elections to buy Bolivian gas for a fertilizer plant it acquired in Brazil.
In a final pre-election act, Morales inaugurated the new privately owned Granosol plant that will make ethanol from sorghum. YPFB will purchase 6mn l/yr from the plant, which is located in Santa Cruz department. Bolivia launched a 10pc ethanol blend in 2018 and in March announced a 5pc biodiesel blend.
"Private investment is guaranteed in the constitution and I have a big economic plan that will allow Bolivia to continue expanding economically," Morales said at the signing event.
The Morales campaign has touted the success of his gas policy. The government boasts of $38bn in gas revenue since the nationalization. The president stressed this again yesterday, showing journalists documents from a previous administration calling for the sale of YPFB.
The Morales government also plans to move more aggressively on lithium. Bolivia has an estimated 9mn tons of lithium reserves, second in the world behind Argentina, according to the US Geological Survey.
The government has deals in place with Germany's ACI Systems to develop brine lithium reserves in the Uyuni salt flats in Potosi department and with a Chinese group to tap reserves on two salt flats in Oruro department.
Mesa's opposition coalition would have reviewed the lithium contracts had he won.
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Caribbean power faces long recovery from Beryl
Caribbean power faces long recovery from Beryl
Kingston, 5 July (Argus) — Power utilities in several eastern and central Caribbean countries have started repairing networks that were brought down this week by Hurricane Beryl. Beryl — the Atlantic's first hurricane this season — hit several islands with winds of up to 225 km (140 miles)/h, and also damaged roads, bridges and ports and telecommunications infrastructure. Many parts of Jamaica, Grenada and St Lucia remain without power, with one utility company forecasting "a long and difficult period of continuing darkness" in these countries. Jamaican power utility JPS said yesterday 60pc of its clients — just under a half a million households — were without electricity. "Our teams are doing damage assessment, and will complete the necessary repairs to restore power as quickly and as safely as possible," the company said. Beryl entered the Caribbean earlier in the week, leaving extensive damage in St Vincent and the Grenadines and in Dominica. St Vincent and the Grenadines will be without power for the next fortnight, chief executive of its power utility Vinlec Vaughn Lewis said. "We have significant damage … and we will be working to get power to facilities such as gas stations and supermarkets." Granada's ward island Cariacou is in an "Armageddon-like condition," prime minister Dickon Mitchell said. "The electricity and communication systems are wiped out." Winds from Beryl hit the southern coast of the Dominican Republic on 3 July, causing blackouts from a deficit of 900MW, according to distributor Edesur. Winds affected major natural gas-fired power plant AES Andres, reducing its regasification capacity for LNG and its fuel supplies to other natural gas plants, the government said. Beryl left several thousand people without power in the Cayman Islands yesterday as it left Jamaica and headed for Mexico. The Caribbean is likely to be hit by more strong hurricanes by the end of the season in November, a spokesman for Jamaica's weather office told Argus . "We have been promised a very active season with many and strong storms." The US federal weather agency NOAA forecast that there is an 85pc chance that this year's Atlantic hurricane season will be "above normal." The Atlantic season's first hurricane "sets an alarming precedent for what is expected to be a very active hurricane season," the World Meteorological Organization said. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US adds 206,000 jobs in June, jobless rate ticks up
US adds 206,000 jobs in June, jobless rate ticks up
Houston, 5 July (Argus) — The US added a solid 206,000 jobs in June while job gains in the prior two months were revised downward and wage gains cooled. The job gains, which beat analyst estimates, followed downwardly revised 218,000 job gains in May and 108,000 gains in April, the Bureau of Labor Statistics (BLS) said today, for a combined downward revision of 111,000 for the prior two months. The US generated a monthly average of 220,000 jobs in the 12 months through May. Economists expected gains of about 190,000 in June, according to a survey by Trading Economics. The jobless rate ticked up to 4.1pc, the highest in more than two years, from 4pc. Still, the unemployment rate remains near five-decade lows. Construction added 27,000 jobs, while manufacturing lost 8,000 jobs. Gains also occurred in government, health care and social assistance. Average hourly earnings rose by 3.9pc from a year earlier, down from a 4.1pc annual gain in the prior month and the lowest in three years. Futures markets after the jobs report indicated a 71.8pc chance the Fed will cut its target rate by a quarter point from a 23-year high in September, up from 68.4pc odds on Wednesday. The Federal Reserve, after its last policy meeting in mid-June, had penciled in one likely quarter point rate cut was likely this year, paring that from a likely three cuts shown in March. Still, it also said it needs to see evidence that inflation is "sustainably" slowing towards its 2pc target before beginning to cut rates from 23-year highs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: RAG says EU lacks clear hydrogen storage rules
Q&A: RAG says EU lacks clear hydrogen storage rules
Brussels, 4 July (Argus) — RAG Energy Storage has been one of the front-runners in hydrogen storage, and established the first operational commercial underground hydrogen storage (UHS) in a depleted gas field in April 2023. Argus spoke to its managing director Georg Dorfleutner, who is calling for a clear framework. Are you OK with the EU apparently scaling back from 10mn t/yr of hydrogen imports? We base the modeling of the report for HeartforEurope more or less on 2030 projections from the RepowerEU strategy. The assumptions on our modelling to identify an investment gap for hydrogen storage were rather conservative — that the only demand would come from industry, thus a rather flat profile over the year without seasonal-shift needs yet. From our side we have multiple potential hydrogen storage projects throughout Europe, but the hydrogen market development and support regimes for infrastructure investments will define the timely realisation. How might any scaling back affect your report's projected 36 TWh H2 storage gap? Whatever happens infrastructure needs to be in place very soon. Our report really underlines the need for a clear framework for hydrogen storage. And we come with a toolbox of different possible measures to support this. Storage tariffs alone won't solve the issue of market ramp-up. Policymakers may feel relieved that the gas and hydrogen decarbonisation package was finished before the EU elections. But our report is more or less saying that this alone will not do the trick. Could a strict EU definition of low-carbon hydrogen hinder growth? The wider and more pragmatic the definitions of low-carbon hydrogen are, the easier market ramp-up will be. Market ramp-up is enormously important for infrastructure. You don't build infrastructure just for demand over the next two years but for the next 10-15 years. Do we need more tailored financial support for UHS, at EU and state levels? There's simply no tailored financial support right now. There's a little aid for hydrogen storage research projects. Currently, policy-making appears focused on whether or not hydrogen infrastructure has to be unbundled. As for financial support, we're completely out of the picture for now. And there's this idea that regulated tariffs make commercially viable projects. But that's not true. It's only booked capacity based on a cost-covering approach that delivers a financially viable project. You don't build infrastructure just to have nice infrastructure without customers. Do we need EU and member state UHS targets? We're not looking for a strict mandatory goal. But if there is a certain goal for hydrogen uptake in the market, then you should ensure that you have the necessary infrastructure in place. That said, targets may be helpful at state level in setting a framework for state aid. But we also have to recognise that Europe is very diversified. Some areas may have very well-functioning hydrogen supply while other landlocked countries might depend on longer supply chains, thus being more dependent on storage. Are markets ready for UHS? Firms are already approaching us. The market is willing, but they need to know what the costs are. The best way forward then is providing clear rules for storage and giving industry a clear pricing idea. There also need to be clear state support mechanisms until we get to cheaper hydrogen and sufficient infrastructure utilisation. In the process of creating UHS capacities we need to keep in mind the SOS for natural gas, which currently is crucial. That's why we focus on new sites — caverns, porous reservoirs and aquifers — rather than repurposing. But at some point, post-2030 with a market ramp-up, decisions on repurposing gas into hydrogen storage will need to be taken. Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US services contract in June, signal broad weakening
US services contract in June, signal broad weakening
Houston, 3 July (Argus) — Economic activity in the US services sector contracted in June by the most since 2020 while a report earlier this week showed contraction in manufacturing, signaling a broad-based slowdown in the economy as the second quarter came to an end. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) registered 48.8 in June, down from 53.8 in May. Readings above 50 signal expansion, while those below 50 signal contraction for the services economy. The June services PMI "indicates the overall economy is contracting for the first time in 17 months," ISM said. "The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment." The business activity/production index fell to 49.6 from 61.2. New orders fell by 6.8 points to 47.3. Employment fell by 1 point to 46.1. Monthly PMI reports can be volatile, but a services PMI above 49 over time generally indicates an expansion of the overall economy. "Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs," ISM said. The prices index fell by 1.8 points to 56.3, showing slowing but robust price gains. ISM's manufacturing PMI fell to 48.5 in June from 48.7 in May, ISM reported on 1 July. It was the third consecutive month of contraction and marked a 19th month of contraction in the past 20 months. Wednesday's weaker than expected ISM report, together with a Wednesday report showing initial jobless claims last week rose to their highest in two years, slightly increase the odds that the Federal Reserve may lower its target rate later this year after maintaining it at 23-year highs since last year in an effort to stem inflation. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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