Productores petroleros latino americanos se reúnen para enfrentar la crisis petrolera

Delegaciones de Colombia, Ecuador, México, y Venezuela se reúnen hoy en Quito para establecer una frente unida para responder al colapso total de los precios mundiales del petróleo. Los países esperan llegar a un acuerdo sobre una propuesta que Ecuador podría presentar durante la próxima reunión de la OPEP este 17 de abril en Doha. Los países ya han programado una rueda de prensa para esta tarde, entonces es muy probable que ya lograron la base de una propuesta en marzo cuando el ministro de petróleo de Ecuador viajó por la región para reunirse con los funcionarios de los países interesados.

En otra noticia relacionada con el sector petrolero, la petrolera estatal colombiana Ecopetrol vendió en subasta una parte de sus acciones en la empresa eléctrica ISA, recibiendo $122 millones en la venta. El reporte mencionó que este es solo un paso en el plan de Ecopetrol de vender acciones no esenciales para recoger fondos para su plan de inversión. Según un comunicado de Ecopetrol, la petrolera tiene planeado subastar es resto de sus acciones en ISA en los días que vienen.

En una noticia relacionada con la minería ilegal, la policía colombiana detuvo 14 mineros ilegales, acusados de haber contaminado y secado el río Sambingo. La Policía Nacional de Colombia dijo en un comunicado de prensa que "Los detenidos tienen una enorme deuda ambiental con Colombia. En su contra hay evidencias que los responsabilizan de secar el río Sambingo, algo que por primera vez ocurre en el país."

Latin American oil producers meet to discuss oil crisis

Delegations from Colombia, Ecuador, Mexico, and Venezuela are meeting today in Quito to establish a united front in response to the total collapse of global oil prices. The countries hope to agree on a proposal that Ecuador can present at the forthcoming OPEC meeting on April 17 in Doha, Qatar. The countries have already scheduled a press conference for later this afternoon, so it is likely that the bulk of an agreement was worked out in March when Ecuador’s oil minister traveled around the region meeting with officials from the involved countries.

In other oil-related news, Colombian state-owned oil company Ecopetrol auctioned off part of its stake in the electric company ISA, raising $122 million in funds. The report noted that this is just the latest step in Ecopetrol’s plan to divest itself of non-essential assets to fund its investment plan. According to a statement issued by Ecopetrol, the oil company plans to auction off the remainder of its 5.32% stake in ISA in the coming days.

In news related to illegal mining, Colombian police detained 14 illegal miners accused of polluting and drying up the Sambingo River. The Colombian National Police said in a press release that, “The detained have a large environmental debt with Colombia. There is evidence against them that they are responsible for drying the Sambingo River, the first time this has happened in the country.”

Presidential election rattles Peruvian markets

So far, the Peruvian press has spent much time discussing the impact that the country’s upcoming election could have on the Peruvian mining industry. Argus media recently added to this conversation by turning its attention to the rise of “gas nationalism” in the Peruvian election. Argus noted that Peru has South America’s only LNG export facility and 14.6 trillion ft3 of gas reserves.

Leftist candidate Verónika Mendoza has recently started rising in the polls, and has pledged to change the basic model that powers Peru’s extractive sector. She wants to renegotiate export contracts – beginning with the gas contract - and, more broadly, rewrite Peru’s 1993 constitution. Mendoza’s policy positions have forced the other candidates to establish a position on the issue, with Kuczynski saying that he would support renegotiating the LNG exports contract, and Keiko Fujimori opposing renegotiation.

The Lima stock exchange continued dropping earlier this week on fears that Mendoza’s extreme policy position would endanger Peru’s mining-fueled economic growth. Mendoza has not changed her campaign rhetoric to dissuade this view, promising an “authentic revolution” in Peru, if elected President.

In mining-related news, a recent statement by Jerry Jiao, vice-president of China Minmetals, reassured observers of the Peruvian mining industry. Jiao stressed that China will continue to buy additional copper mines around the world to secure its supply, in spite of low commodity prices and few large mining projects.

Colombian peso's rally falls apart

The Colombian peso, which had climbed to a four-month high past the 3,000 COP : 1 USD, fell back to earth on Monday, when it weakened to 3,068 per dollar. Bloomberg explained that the peso’s rally was driven by a climb in oil prices, which dropped upon news that Saudi Arabia would only freeze its oil production if rival Iran did the same.

In related news, Ecuadorean president Rafael Correa told the press that oil officials from Colombia, Ecuador, Mexico, and Venezuela will meet on Friday to discuss freezing oil production and any other tools the countries might be able to use to raise oil prices. Correa noted that the meeting was originally supposed to take place in March, but was postponed due to scheduling difficulties. Ecuador’s goal is to win support for a proposal in advance of OPEC’s next meeting on April 17.

The Colombian weekly Semana wrote about the terrible effects that the global oil crisis has had on the four leading lights of Latin America’s oil industry, state-owned oil companies Petrobras, Pdvsa, Pemex, and Ecopetrol. The article explained that after enjoying several decades of exuberant growth, the oil companies are now experiencing great difficulties, which have also affected the finances of their respective national governments.

Peruvian political instability rocks currency

Late last week, the Peruvian sol suffered its steepest one-day fall of the last two years, dropping by 1.1%, because of poll results showing the leftist presidential candidate Veronika Mendoza in a tie for second place with Pedro Pablo Kuczynski. Bloomberg noted that Mendoza support toughening environmental regulations, which would undoubtedly affect Peru’s mining-dependent economy.

According to Alfonso Montero, the chief investment officer of Credicorp Capital Colomiba SA, “If Mendoza were president, all of the markets would be overvalued. The best scenario would be Brazil and the worst is Venezuela.” Despite the political uncertainty, Peru’s ETF has been the world’s best-performing ETF, and the Peruvian sol has actually climbed in value in recent months.

In mining-related news, Peruvian police seized a large amount of chemicals destined for an illegal mine in the department of Puno. The police pulled over a truck that had been carrying the illegal mining materials and detained the drivers. Unfortunately, isolated interdictions like this represent just a tiny fraction of the materials that find their way to illegal miners.

Late last week, the Peruvian authorities also carried out a new raid against illegal mining camps in the department of Puno, involving more than 250 police officers specialized in environmental crimes. Like most of the government’s raids, this one resulted in the seizure of much illegal mining equipment and supplies, but no arrests.

Colombia faces lawsuit over mining regulations

Late last week, the board of directors of Canadian multinational mining company Eco Oro Minerals Corp announced that it would sue the Colombian government because of the Colombian Constitutional Court’s ruling to ban all mining activity in the country’s protected zones and high-altitude moorlands. Eco Oro explained that it would be suing under the investment chapter of the free trade agreement between Canada and Colombia. The report noted that Tobie Mining Inc also decided in February to sue Colombia for $16 million for the same reason.

In oil-related news, the New Republic, the storied liberal American political magazine, published a lengthy piece exploring what will happen in Colombia after a peace agreement is signed between the government and the FARC. Astutely, the New Republic argued that, “In large part, the story of a ‘post-conflict’ Colombia is a story about oil.” Roger Cohen recognizes that the Colombian government’s lofty promises of rebuilding and bringing government services to marginalized parts of the country require financing. And oil revenue, which has subsidized much of the government’s spending over the last decade, has disappeared and is unlikely to return.