LATIN AMERICA ADVISOR ENERGY ADVISOR A WEEKLY PUBLICATION OF THE DIALOGUE www.thedialogue.org June 26, 2020 BOARD OF ADVISORS FEATURED Q&A TOP NEWS Nigel Blackaby Global Head, OIL & GAS International Arbitration Group, Freshfields Bruckhaus Deringer Is Political Upheaval U.S. Sanctions Mary Rose Brusewitz Captains for Member, Clark Hill Strasburger in Guyana Hurting Venezuela Cargoes Jeffrey Davidow The administration of U.S. Senior Counselor, President Donald Trump slapped The Cohen Group Foreign Investment? sanctions on five Iranian ship Jonathan C. Hamilton captains involved in bringing gas- Partner, oline to Venezuela, which is facing White & Case severe fuel shortages. Five Iranian Ana Heeren tankers delivered about 1.5 million Managing Director, barrels of gasoline this week. FTI Consulting Page 2 Raul Herrera Partner, Corporate & Securities Practice, OIL & GAS Arnold & Porter James R. Jones Petrobras Enters Chairman, Teaser Stage in Monarch Global Strategies Asset Sale Jorge Kamine More than three months after the presidential election in March and following several vote Partner, recounts, opposition leader Irfaan Ali (pictured) was confirmed to have won over incumbent The Brazilian state oil company Corporate & Financial Services, President David Granger. // File Photo: Guyanese Government. has begun the so-called teaser Willkie Farr & Gallagher stage in the sale of its entire stake Preliminary data published by Guyana’s elections commis- Craig A. Kelly in shallow-water fields off the Director, sion shows opposition candidate Irfaan Ali winning a recount coast of Ceará state. Americas Int’l Gov’t Relations, Exxon Mobil of votes of the March presidential election. President David Page 3 Tyler Kruzich Q Granger had initially claimed victory, but observer groups Director, Int’l Gov’t Affairs for and the opposition party denounced irregularities. What’s in store RENEWABLES the Western Hemisphere, Chevron for Guyana’s oil sector under a new government? To what extent has Enel Planning Jorge León the vote recount process over the past three months eroded foreign Hydrogen Units in Energy Economist, BP investors’ appetite for developing the country’s recently discovered Chile: Cammisecra offshore oil blocks? In what ways has the context of lower international Jeremy Martin Enel is planning to launch a green Vice President, Energy & Sustainability, crude prices affected current and future production plans in the South hydrogen business in 2021, with Institute of the Americas American nation? the European company targeting Larry Pascal markets including Chile, said Chairman, Antonio Cammisecra, the head of Americas Practice Group, Haynes & Boone Thomas B. Singh, director of the University of Guyana Enel’s global power generation. Page 2 Charles Shapiro GREEN Institute and senior lecturer in the Department of President, Economics: “A new government would, if sworn in, have to do World Affairs Council of Atlanta a lot of fast learning, as the oil sector is very different from R. Kirk Sherr A President, any that it had managed in the period of its incumbency before the oil dis- Clearview Strategy Group covery. In negotiations as well as in its legislative agenda for the sector, Mark Thurber Partner, an Irfaan Ali government will be less inclined to capitulate to the demands Hunton Andrews Kurth of the sector, though it will not be unfriendly to oil companies, and it will Jose L. Valera be cognizant of the sector’s potential for Guyana’s development pros- Partner, Mayer Brown LLP pects. It seems clear that it will attempt to alter the fiscal regime away Lisa Viscidi in the production-sharing agreement with ExxonMobil in Guyana’s favor, Program Director, both for Exxon, but especially for other potential operators. The recount Inter-American Dialogue process itself and the implication that there will be a new government will matter less for foreign investors than would the Guyana Electoral Cammisecra // File Photo: LinkedIn. Continued on page 3 COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ENERGY ADVISOR June 26, 2020 RENEWABLES NEWS ize sectors of the economy in which electrifica- NEWS BRIEFS tion has limitations,” Ana Ángel, Latin America Enel Planning to manager at energy consultancy Hinicio, told JinkoSolar to Supply Solar the Energy Advisor in March. [Editor’s note: Modules for Chile Plant Launch Hydrogen See related Q&A in the March 13 issue of the Energy Advisor.] China’s JinkoSolar, one of the largest solar Businesses in Chile module manufacturers in the world, announced Monday that it will supply 60.9 megawatts of Enel, Europe’s biggest utility, is set to launch a Mexican Antitrust bifacial modules for the first industrial hybrid green hydrogen business in 2021 in an effort to Regulator Challenges plant in Chile. The plant, which is set to be accelerate its plans of becoming carbon-free located about 10 kilometers outside the city of by 2050, with the company targeting markets New Power Rules Calama in the Antofagasta region, will consist including Chile, Reuters reported last Friday. of a 60.9-megawatt photovoltaic plant and a Other markets included in the plan are the Mexico’s antitrust regulator said on Monday 90-megawatt wind farm. Construction of the United States, with a special focus on Texas, that it had filed a lawsuit at the country’s hybrid plant is expected to be finished in early and Spain, the head of global power generation, Supreme Court against the energy ministry over 2021. [Editor’s note: See related Q&A in last Antonio Cammisecra, told the wire service. rule changes in the electricity sector, Reuters week’s issue of the Energy Advisor.] reported. Last month, the ministry published a set of guidelines giving the state more control We have huge renew- over approval of new renewable energy proj- Mexico Watchdog Orders able energy pipelines ects, sparking concerns that the government CRE to Disclose Gov’t was violating existing contracts with the aim of in these countries, Renewable Energy Policies where there’s also a squeezing out private companies, according to the report. The Federal Economic Competition promising market for Mexico’s federal transparency watchdog, Inai, Commission, or Cofece, said in a statement hydrogen, too.” has ordered energy regulator CRE to disclose that the new rules go against fundamental policies and projects that the government is — Antonio Cammisecra principles of free competition established in pursuing in a bid to achieve the legally estab- the Constitution and urged the Supreme Court lished goals of renewable energy generation in to rule on the matter, Europa Press reported. the country’s electricity mix, BNAméricas re- The group has wind and solar assets in Texas. Cofece added that the ministry’s move “seri- ported Monday. Mexico has the goal of having “We have huge renewable energy pipelines in ously affects” the structure of the electricity 35 percent of its electricity generation come these countries, where there’s also a promising sector and prevents access to transmission from clean energy by 2024. Inai President market for hydrogen, too,” Cammisecra said. and distribution networks while favoring cer- Francisco Javier Acuña said the information is Enel is planning to install electrolyzers, which tain participants and hindering others’ ability to “particularly relevant in light of the internation- use electricity to split water into hydrogen and compete. [Editor’s note: See related Q&A in the al hydrocarbon crisis and the problems related oxygen, at its solar and wind farms to produce May 29 issue of the Energy Advisor.] to production of nonrenewable energy.” hydrogen that can be used for energy storage or sold to industrial clients in order to help decarbonize their processes, according to the OIL & GAS NEWS report. Cammisecra said Enel wants to build U.S.-Canada Consortium large-scale plants that would usually have a to Take Over T&D From quarter of the capacity of the renewable plant U.S. Slaps Sanctions Puerto Rico Power Firm it is built next to. “We’ll start with 2-3 projects on Captains Involved in the first year to see if the business case is A consortium of Canadian and U.S. firms will sound,” Cammisecra added. According to a in Venezuela Cargoes take over the transmission and distribution report by S&P Global Platts published earlier system of Puerto Rico’s public power company, PREPA, officials said Monday, the Associated this year, hydrogen could achieve emission The U.S. Treasury Department on Wednesday Press reported. It is the first time that such reductions in industrial settings, as well as in slapped new sanctions on five Iranian ship cap- operations will be privately managed in the U.S. residential and commercial heating and long- tains who recently delivered gasoline to Ven- territory since PREPA became a public utility in haul trucking. “Green hydrogen … is positioning ezuela, CNBC reported. Earlier this week, five 1979. Canada’s ATCO and U.S.-based Quanta itself as a key piece of the puzzle to decarbon- Iranian tankers shipped approximately 1.5 mil- Services and IEM make up the consortium. COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ENERGY ADVISOR June 26, 2020 lion barrels of fuel to the Andean nation, which FEATURED Q&A / Continued from page 1 has been facing a sharp shortage of gasoline and was once a prominent global fuel exporter. Commission’ eventual declaration and the inappropriate privatization of state land by “The Treasury Department will target anyone fallout of that declaration. The incumbent the PPP and the coalition, especially water- who supports Iranian attempts to evade United seems willing only to accept a declaration front properties. I am concerned about the States sanctions and who further enables that returns it to power. Such an eventuality gas-to-power project, the formulation of a their destabilizing behavior around the world,” will strongly deter foreign investors as it real national development plan and the need Treasury Secretary Steven Mnuchin wrote in will result in an unpredictable government.