Newswire: Latin America - Region

[Venezuela] -- Oil-Services Law to Affect Some Foreign Companies
New nationalization legislation now in the hands of Venezuelan lawmakers will impact the operations of some oil-services companies but will leave out rig firms and large well-service firms.

Oil Minister Rafael Ramirez noted Wednesday that firms such as Williams Co. (WMB), a U.S. firm that operates a high-pressure gas compression facility in Venezuela, could be affected by the new law, but noted that oil rig firms and large service firms such as Schlumberger Ltd. (SLB) and Halliburton Co. (HAL) are not included.


[Bolivia] -- U.N. Team Documents Forced Labor Among Indians in Bolivia
LA PAZ – A mission dispatched by the U.N. Permanent Forum on Indigenous Issues reported Tuesday that it had verified the existence of Indian communities in eastern Bolivia that are being subjected to forced labor.


[Peru] -- Central Bank May Cut Interest Rate to 4% as Domestic Demand Stalls
Peru’s central bank will probably cut its benchmark lending rate for a fourth straight month today as slowing inflation allows policy makers to lower borrowing costs and bolster flagging domestic demand.


[Peru] -- Repsol to Invest $500 Million a Year in Peru, Complete Projects
Repsol YPF chairman and CEO Antonio Brufau said Tuesday that the Spanish energy giant would invest $500 million per year in Peru, completing $6 billion in oil and natural gas projects.

The Spanish oil company has a large stake in the development of the Camisea natural gas field in southeastern Peru and plans to begin exporting fuel to Mexico next year.


[Chile] -- Codelco Increases Reserves by 20 Percent
Chile’s state-owned National Copper Corporation, or Codelco, the world’s largest producer of the red metal, increased its proven and probable reserves by 20 percent in 2008, company sources told Efe on Wednesday.


[Mexico] -- Calderon Deploys Reserves as Swine Flu Depletes Mexico Financial Resources
As the sun sets on Ciudad Juarez, the Mexican border city’s citizens flee to the safety of their homes. The vendors who crowd Avenida Juarez to sell tacos and ice cream during the day pack up their carts and disappear. Hawkers who hand out leaflets for a local mall are gone too -- and the mall itself is a ghost town.

Enap, Chile's state oil company declares $958 mil net loss in 2008

Chile's state oil company, Enap, the second largest company in the country after copper giant Codelco (according to this FT article) declared a $958 million net loss in 2008 yesterday.

Enap produces 230,000 barrels of oil per day and 13m cubic meters of fuel a year. The company also has interests in Argentina, Ecuador, Egypt and Iran and . It supplies about 85 per cent of Chile’s fuel needs and exports to Central and South America.

Sadly, Enap is what will go down in history as a classic victim from the volatile markets of the world economy during the global economic crisis of 2008-2009.

Record high commodity prices reached in 2007-2008 forced Enap to purchase a great deal of the crude it refined for use in the domestic economy for around $140 a barrel. When oil prices dropped to $34 a barrel in December, the company was forced sell its refined crude products for the lower market price. In all, this macro swing in the global economy cost the company around $650 million.

Two other factors also contributed to the loss. Drought in northern Chile forced Enap to shut down some hydroelectric plants. Second internal problems in Argentina lead the government to implement subsidies on petrol products, igniting demand in Argentina. When push came to shove and Argentina realized there wasn't enough gas to go around, the country diverted some of its supplies meant for Chile to the domestic economy. Thus forcing Chile in both instances to import energy from new and more expensive sources.

All in all a bad year for Enap in the global economy.

According to this FT article, Enap has pinned its hopes on hydrocarbons exploration in the Magallanes region in the far south of Chile, but the state auditor has raised questions about the viability of the project, and Enap has yet to announce whether it will go ahead.