Petroleum. The South American pains that hold back the development of production

From an energy point of view, South America has enormous potential starting from oil production and then, theoretically, also switching to renewables, nuclear etc. Under-capitalization preconceptions, props and politicians, instability, exploitation by great opportunistic powers, however, hold back the possibilities that would, instead, be a panacea for world growth. In all this Europe, by now a dusty corner of the world, was watching indolently. Yet we would have much to do to help them and ourselves, but we are now on the way to implosion.

Here is a summary of the main oil-related case studies in Latin American countries:

Petrobras raises fuel prices for consumers. Politically it can end badly

Brazilian motorists are likely to be angry soon after the country's state-owned oil company Petrobras hiked gasoline and diesel prices on Wednesday . The move is in line with fluctuations in global markets, the company said. The company, also known as Petróleo Brasileiro, said in a statement that the average price of gasoline at the entrance to the refinery will rise to 3.24 reais ($ 0.58) per liter from 3.09 reais, while the prices of diesels will rise to 3.61 reais per liter from 3.34 real. “These adjustments are important to ensure that the market continues to be supplied on an economic basis and without the risk of shortages by the different actors responsible for serving the different Brazilian regions: distributors, importers and other manufacturers,” said Petrobras. The oil giant added that until last October it had reduced the price of gasoline and kept the price of diesel, but after 77 days it had decided to "adjust the selling prices of gasoline and diesel for distributors". The price increases are "in equilibrium with the market, following upward and downward changes" that have been influenced by "external volatility and the exchange rate," the statement added. The problem is that this increase, however due, takes place on the eve of the Brazilian presidential elections, making President Bolsonaro's position complicated.

Venezuela will reportedly resume exports of diluted crude oil

Venezuelan state-owned oil company PDVSA will resume exports of diluted crude oil (DCO) this week for the first time in nine months, Reuters reported. PDVSA was forced to cease production of DCO as a result of US trade sanctions, given the lack of diluents that aid in export production. Following a September agreement between Venezuelan President Nicolás Maduro's government and Iran, however, PDVSA now has access to an Iranian condensate, allowing for the alteration of DCO's manufacturing and shipping strategies, Reuters reported. Given the increase in stocks of diluted crude, PDVSA has resumed exports to Asia, so that the DCO does not continue to occupy storage space. A victory for Maduro, but in the midst of an overall complicated situation.

Venezuela oil pipeline explosion accused of "criminal saboteurs"

Widespread poverty and political instability, however, are obstacles that Venezuela is still unable to escape and that cause Third World problems. Venezuelan state-owned oil company PDVSA said the blast along an oil pipeline was an act of "criminal sabotage," Reuters reported Wednesday. Officials from the state of Anzoátegui in eastern Venezuela said the blast occurred late on Tuesday. It was not known who was responsible for the explosion or if there were any casualties. It was allegedly caused by "attempts to drill the pipeline," state governor Luis José Marcano said in a Twitter post. Poverty is such that people risk their lives trying to steal fuel by piercing the pipes. There are not many solutions against problems of this kind …

Mexico offers a bond exchange to reduce Pemex's debt burden

Mexican state oil company Pemex has reduced its debt by $ 3.2 billion . Pemex swapped the maturing debt for a new 10-year bond as part of a refinancing plan. Efforts to get the debt-strapped business back on their feet also include direct capital injections and tax breaks. President Andrés Manuel López Obrador's administration cut the amount of taxes the company owes the government three times, from 64 percent to 40 percent, the report added. Pemex is buried under $ 113 billion in debt, most of any state-owned oil company in the world, and continues to struggle to reverse the more than 10-year drop in production, Bloomberg News reported. The oil producer, also known as Petróleos Mexicanos, is dependent on the federal government's willingness to continue paying bondholders, the report added. The Mexican government is moving forward with a complete overhaul of the country's energy sector, which largely aims to end the reforms put in place by previous pro-market administrations and help position state-owned companies more strongly. However, without capital it is difficult to make the investments necessary for the growth of production desired by the political authorities. Unfortunately, the wastes of previous governments are not easily erased.

---

---

The article Petroleum. The South American pains that hold back the development of production comes from ScenariEconomici.it .

---

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-i-dolori-sudamericani-che-frenano-lo-sviluppo-della-produzione/ on Sun, 16 Jan 2022 09:00:57 +0000.