This week the MinPres continued his re-election campaign full force, by rolling out the third phase LNG exploration with international partners, Repsol/Total, his French/Spanish partners.
The exploration started sometimes ago with 2D and 3D mapping, then when it turned out optimistic, they continued with preliminary drilling, you must have seen the small platform in several places, visible from the air before landing.
So now with the announcement of drilling, we understand that Repsol/Total is willing to spend another $50 million; they must have a pretty good hunch that there is something beneath the surface. Even companies like this, don’t spend $50 million unless they are almost 90% sure, they will strike gold.
What kind of gold? Liquid Natural Gas, LNG, which is better, as far as carbon emissions, friendlier than heavy fuel oil or diesel; that’s the trend now, to transition to more environmental fuel. It’s far from being green, but it’s a natural resource, we are fortunate to have.
BUT
We’re not Norway. Fifty years ago no one thought that oil exploration would be such a huge economic factor, today the Norwegians make NOK 218 billion a year, down from NOK 312 billion in 2014, the drop due to the sharp decline in the oil price. And it pays for everything, in that welfare state from education to healthcare, because “Long-term perspective in the management of the government’s petroleum revenues ensures that they benefit Norwegian society as a whole, and that future generations will benefit from Norway’s petroleum wealth. This has been a key principle in developing the financial and legal framework for the sector.”
I wish we could say the same, but we’re not that disciplined and smart.
Often concessions are handed out to foreign companies with deep pockets and while politicians benefit, the country more often than you think, doesn’t. But we’re not a third world country and I am optimistic.
BUT
Oklahoma is experiencing a 4000% increase in earthquake this year. According to earthquake researchers, including civil and environmental engineering FRACKING, the wastewater injection and other fluid injection technologies, related to the oil industry have a lot to do with it. So we have to be aware of dangers inherent to oil exploitations, including spills, earthquakes and Tsunamis.
At the end of the press conference hosted by the MinPres, WEB Aruba signed an agreement for batteries with Tesla, as announced in the Green Aruba conference the day before. Name brands are attractive on a small island but I bet you that the Tesla batteries are super-duper expensive, twice or trice that any other brand, and I hope that WEB Aruba has a good plan for disposal of these batteries, they don’t last forever, and Aruba has no room to absorb that chemical stuff. Does Tesla plan to ship to exhausted batteries back to California? How does California feel about it? This decision has large consequences if not thought through, and I hope Frank Hoevertsz is thinking.
Just a foot note about PDVSA, unrelated to Repsol/Total, but still related since it controls the refinery infrastructure in San Nicholas.
Did you read that:
PDVSA has activated the 30-day grace period for paying its debts. Last week, PDVSA had coupon payments amounting to $539 million. As reported last week by the paying agent, PDVSA has only paid $135 million, while other funds are still pending. PDVSA has not responded to calls or emails. So now, PDVSA has a 30-day grace period to make payments on the coupons before it goes in default. Bloomberg believes that PDVSA will make these payments during the grace period, but this delay highlights the cash difficulties and mismanagement of PDVSA with regards to its liabilities
