Top stories this week are likely to include: impact of the Amuay refinery tragedy in Venezeula; aftermath in the Caribbean of Tropical Storm Isaac; YPF and Chevron move toward an alliance; fallout of a cabinet shift in Colombia; and Canada seeks to strengthen commercial ties with Southeast Asia.
Disaster at Amuay Refinery Continues: After Saturday’s deadly explosion at the Amuay oil refinery in Venezuela’s Falcón state, much remains up in the air. Flames were still burning as of this morning, and President Hugo Chávez has ordered an investigation and declared three days of mourning. However, as the death toll remains unpredictable—it already climbed to 41 from 39 overnight, with 20 of the dead belonging to Venezuela’s National Guard—pay attention to any developments in the aftermath of the worst accident in Venezuela in recent memory.
Isaac Causes Damage: Over the weekend, Tropical Storm Isaac slammed Hispaniola, killing 10 total—eight in Haiti and two in the Dominican Republic—and displacing thousands. Haiti’s Civil Protection Office reported 14,000 had fled their homes and another 13,500 were living in temporary shelters. How will the island rebound? And what lies in store for Isaac? It is picking up speed in the Gulf of Mexico and will likely turn into a hurricane early this week, with projected landfall near New Orleans, Louisiana, on Wednesday—six years to the day after Hurricane Katrina ravaged the coastal city. (Donate to the American Red Cross.)
YPF, Chevron in Advanced Talks for Alliance: YPF, Argentina’s state-controlled energy company, is mulling a strategic accord with Chevron, Latin America’s leading private energy investor. YPF CEO Miguel Galuccio held a meeting on Friday with Ali Moshiri, Chevron’s Latin America chief, and noted that YPF needs more experienced partners to help develop Argentina’s massive shale reserves, which are the world’s third largest. Of particular interest is the Vaca Muerta field in the Nequén province, and Chevron is already involved in three wells in Vaca Muerta. Galuccio will present a five-year plan this Thursday.
Cabinet Shakeup in Colombia: Having recently crossed the halfway threshold into his four-year term, Colombian President Juan Manuel Santos decided to reshuffle his cabinet last Thursday when he asked all 16 of his ministers to resign. Some posts have been reassigned; former mines minister Mauricio Cardenas has assumed the finance portfolio. However, Cardenas’ replacement, as well as other vacant posts, has not yet been named. This week will likely see movement in Santos’ cabinet.
Canada Seeks Increased Trade Ties in Asia: Canadian Trade Minister Ed Fast begins a trade mission today to Southeast Asia, where he will conduct official visits to Vietnam, Thailand and Cambodia followed by the first Canada-ASEAN Economic Ministers Meeting in Cambodia. Fast will then continue to Burma, marking the first time a Canadian trade minister has ever done so. In a statement, Fast said, “This year, as we celebrate the 35th anniversary of relations between Canada and the Association of Southeast Asian Nations, we are committed to moving our trade and investment relationship with ASEAN forward.”
Top stories this week are likely to include: India-CELAC dialogue; Jamaica marks its independence; impact of the Antamina spill; Repsol to meet with Venezuela on YPF; and responses to Petrobras’ poor quarterly release.
India-CELAC Dialogue: Tomorrow, Indian Foreign Minister S. M. Krishna will host a troika of high-level diplomats from the Comunidad de Estados Latinoamericanos y Caribeños (Community of Latin American and Caribbean States—CELAC) in New Delhi with the objective being to deepen relations with Latin America. As Chile currently holds the CELAC presidency, Chilean Foreign Minister Alfredo Moreno will lead the delegation that will also include Venezuelan Foreign Minister Nicolas Maduro and Cuban Vice-Foreign Minister Rogelio Sierra. According to India’s foreign ministry, India’s trade in Latin America and the Caribbean (LAC) was over “$25 billion in 2011 and cumulative investments are estimated to be $16 billion mostly in hydrocarbons, minerals, agriculture, pharma and IT;” still, there is “vast untapped potential” for further collaboration. This presents an enormous opportunity for Latin America, notes AQ Senior Editor Jason Marczak: “Greater trade and investment linkages with India will be critical for protecting the region against any decrease in demand caused by a slowing Chinese economy. India represents a growing, untapped middle class.” For more on LAC-India relations, read “The Other BRIC in Latin America: India” from the Spring 2011 AQ. As well, AS/COA notes that diplomatic ties between LAC and India have expanded; between 2002 and 2009 the number of LAC embassies in New Delhi grew from 12 to 18.
Jamaica Rings in Independence: Today Jamaica celebrates 50 years of independence from the United Kingdom. Queen Elizabeth II remains the island’s monarch, but Jamaican Prime Minister Portia Simpson-Miller pledges to loosen ties with Great Britain and make her country a republic. Doing so would maintain Jamaica’s status as a British commonwealth, but would remove the Queen as Jamaica’s head of state and have the prime minister become president. Reflecting on 50 years of independence, Simpson-Miller told TIME Magazine that “despite our challenges, I think we’ve done very well on balance our first 50 years […] Jamaica is more than just the ‘brand’ the world recognizes so well; it’s a place of pride for the people who live here, its educational institutions, its sports achievements, and its science and technology growth.”
Impact of Peruvian Mine Spill: A toxic copper concentrate spilled at the Antamina mine in the Peruvian region of Ancash on July 25 has made over 100 people ill. Antamina’s environmental director has disputed that the material was toxic, instead referring to it as a “dangerous substance that requires a particular handling but not necessarily toxic.” Still, on Sunday, the company was fined for not activating its response plan to the accident. Copper has been instrumental to Peru’s economic ascent, accounting for 60 percent of export income, but “environmental protection has been relatively lax” in the Andean country according to the Associated Press. As more details emerge this week, will the government take additional action?
Repsol Representatives to Meet with Venezuelan Officials on Thursday: Officials from Spanish firm Repsol S.A. will meet with Venezuelan leaders on Thursday to discuss Repsol’s dispute with Argentine firm YPF after Argentina’s government seized a majority share of YPF, formerly held in a joint venture with Repsol. Venezuela has pledged to invest in Argentina to boost its oil production and desires an amicable resolution to the conflict with Repsol and the Spanish government. Repsol has investments in Venezuelan oil and gas fields, according to Bloomberg.
Fallout from Disappointing Petrobras Report: Petrobras posted its worst quarterly report since 1999, registering a R$1.35 billion ($663 million) loss in the second quarter, versus a R$10.94 billion—then equivalent to $6.86 billion—gain one year earlier. Petrobras President Maria Graça Foster blamed the loss in part to an “excessive depreciation” of the real against the dollar. What steps will be taken in response to this report?
The Argentine Senate approved a bill early Thursday morning that would nationalize Yacimientos Petrolíferos Fiscales (YPF), the country’s biggest oil and gas producer. Sixty-three out of a total of 72 senators voted in favor of the expropriation—more than the majority required to pass the bill—versus three against and four abstentions. President Cristina Fernández de Kirchner’s coalition party Frente para la Victoria (Front for Victory—FPV) has strong influence over both houses and the bill is widely expected to also pass the Chamber of Deputies next week.
The senate vote comes a week following Fernández announcement that the government intended to seize a 51-percent stake in YPF from its Spanish parent company Repsol, which currently ownes 57.4 percent of the company. Fernández blamed energy companies like Repsol for their lack of adequate investment in the energy sector and for Argentina’s energy trade deficit, which reached almost $3 billion in 2011. The government contends that YPF takeover will help solve Argentina’s short-term energy needs.
Shale gas may in the future offer new solutions to Argentina’s energy challenges, as the country is believed to have the world’s third-largest shale-gas reserves after China and the United States. But in a recent article “Argentina’s Shale Gas Revolution,” published in the Spring 2012 issue of Americas Quarterly, Francisco Resnicoff and Gabi Huesca warn that the Kirchner Administration does not have the financial means to exploit these resources and will likely have trouble attracting the level of foreign investment required to exploit its shale-gas reserves.