Pragmatist restores Bolivia to socialist party rule
Gas-rich Bolivia's socialist party swept yesterday's elections and will return to power by year's end, but with a more pragmatic leader at its helm.
Former finance minister Luis Arce won more than 50pc of the vote in two exit polls, topping his nearest rival, former president Carlos Mesa, by more than 20 points. While the results are still unofficial, Bolivia's conservative interim president Jeanine Añez confirmed Arce's outright victory in a late-night message. A narrower victory would have required a run-off ballot. Congressional results are still trickling in.
Arce's decisive victory ends a tumultuous transition year since former president Evo Morales claimed to have won a fourth term in October 2019 elections clouded by fraud allegations. He resigned in November after the military threatened a revolt, and is now in exile in Argentina. He and his allies claim he was the victim of a coup.
Arce served as Morales' finance minister during nearly 14 years of MAS rule, a period that kicked off in 2006 with the nationalization of the hydrocarbons industry. A staunch ally of Venezuela's late president Hugo Chavez, Morales benefited from years of windfall revenue from pipeline natural gas exports to Brazil and Argentina. Despite Morales' fiery rhetoric, the business community quietly adapted to his policies.
Arce's tone is markedly less strident. "We are going to work for all Bolivians, building a government of national unity," Arce said during his victory speech just after midnight. He pledged to "reorient the process of change," learning from "mistakes" made during the previous MAS administration.
Añez's interim administration controversially pivoted Bolivia into the US political sphere by restoring anti-narcotics cooperation and recognizing Venezuela's US-backed political opposition. She is now expected to cede power to Arce in a matter of weeks, rather than wait for the traditional early January handover.
Arce will inherit a much different country than Morales left behind, with the economy forecast to shrink by 5.2pc this year because of the Covid-19 pandemic and a dimmer gas outlook.
"Natural gas was the most important source of economic growth, but it is fading because of lower prices and declining production," former interim president Eduardo Rodriguez told Argus. "The incoming government will have to find alternatives to attract productive investment from outside the country."
Bolivia's gas production is stagnant at around 40mn m³/d, down from some 60mn m³/d a decade ago. Among the foreign companies partnered with YPFB are European companies Repsol, Shell and Total, Brazil's state-controlled Petrobras and Russia's Gazprom.
Brazil's massive pre-salt discoveries and Argentina's Vaca Muerta shale development mean that neither country needs as much Bolivian gas as it used to.
The MAS government plan for 2020-25 calls for building up the domestic gas market. The Morales government built a $900mn fertilizer plant that now stands idle. Arce's team has vowed to reactivate it.
The Morales government had signed a urea supply deal with Russian fertilizer giant Acron, but it was iced before he left office.
Lithium promise
More economic promise for Bolivia seems to lie with lithium. "The Morales government was too slow in making decisions about industrialization of lithium," Rodriquez said. "This will need to be a priority for the new government to attract investment."
Bolivia signed a deal with a German firm, ACI System, to develop brine lithium in the Uyuni salt flats in Potosi. That contract was scrapped by Morales shortly before he resigned last year.
Arce's plan foresees not only development of lithium cathodes and batteries, but associated products from boron to potassium chloride.
Pilot projects started by state-owned lithium company YLB produce limited quantities of potassium chloride. The firm reported 5,000 tons of potassium chloride exports to Brazil and Chile in January-August 2020.
Related news posts
US M&A deals dip after record 1Q: Enverus
US M&A deals dip after record 1Q: Enverus
New York, 26 April (Argus) — US oil and gas sector mergers and acquisitions (M&A) are likely to slow for the rest of the year following a record $51bn in deals in the first quarter, consultancy Enverus says. Following an unprecedented $192bn of upstream deals last year, the Permian shale basin continued to dominate first-quarter M&A as firms competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of Endeavor Energy Resources. Other private operators, such as Mewbourne Oil and Fasken Oil & Ranch, would be highly sought after if they decided to put themselves up for sale, Enverus says. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Start-ups to help Total keep output stable in 2Q
Start-ups to help Total keep output stable in 2Q
London, 26 April (Argus) — TotalEnergies said it expects its oil and gas production to hold broadly steady in the second quarter as planned maintenance is partially offset by rising output from new projects in Brazil and Denmark. The company expects to average 2.4mn-2.45mn b/d of oil equivalent (boe/d) in April-June, compared with 2.46mn boe/d in the previous three months and 2.47mn boe/d in the second quarter of 2023. Production is being supported by the restart of gas output from the redeveloped Tyra hub in Denmark late last month and the start of the 180,000 b/d second development phase of the Mero oil field on the Libra block in Brazil's Santos Basin at the beginning of the year. TotalEnergies first-quarter output was flat compared with the previous three months but 2pc lower than a year earlier as a result of Canadian oil sands divestments. The company reported a robust set of first-quarter results today, broadly in line with analysts' expectations. Profit for the first three months of 2024 was $5.7bn, compared to $5.6bn in the same period last year. Adjusted profit — which takes into account inventory valuation effects and special items — came in at $5.1bn, down by 22pc on the year but slightly ahead of the consensus of analysts' estimates of $5bn. Adjusted operating profit from the firm's Exploration & Production business was down by 4pc year-on-year at $2.55bn, driven in part by lower natural gas prices. The Canadian oil sands asset sales weighed on the segment's production but this was partly compensated by start-ups. As well as Mero 2, the Akpo West oil project in Nigeria started production during the first quarter. TotalEnergies' Integrated LNG segment saw a 41pc year-on-year decline in its adjusted operating profit to $1.22bn in January-March. The company said this reflects lower LNG prices and sales. But while its LNG sales for the quarter fell by 3pc in year-on-year terms, its LNG production was greater by 6pc. TotalEnergies achieved an average $78.9/bl for its liquids sales in the first quarter, an improvement on $73.4/bl a year earlier. But the average price achieved for its gas sales was 43pc lower on the year at $5.11/mn Btu. In the downstream, the company's Refining & Chemicals segment's first-quarter adjusted operating profit was $962mn in January-March, down by 41pc on the year but 52pc higher than the preceding quarter. TotalEnergies attributes the quarter-on-quarter rise to higher refining margins and a rise in refinery throughput . For the second quarter, it expects refinery utilisation rates to be above 85pc, compared with 79pc in the first quarter, boosted by the restart of 219,000 b/d Donges refinery in France. Total's Integrated Power segment continued to improve, registering a quarter-on-quarter and year-on-year increased of 16pc and 65pc respectively in its adjusted operating profit to €611mn. Net power production increased 14pc year-on-year to 9.6 TWh, while the company's portfolio of installed power generation capacity grew 54pc to 19.5GW. Total's cash flow from operations, excluding working capital, was down by 15pc on a year earlier at $8.2bn in the first quarter. The company has decided to raise its dividend for 2024 by 7pc to €0.79/share and plans a $2bn programme of share buybacks for the second quarter. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese gas utilities to sell more city gas in 2024-25
Japanese gas utilities to sell more city gas in 2024-25
Osaka, 26 April (Argus) — Japanese gas utilities are expecting city gas demand from their customers to rebound in the April 2024-March 2025 fiscal year, after warmer than normal weather reduced the use of the heating fuel in 2023-24. Japan's largest gas retailer by sales Tokyo Gas forecast on 25 April that its city gas sales will increase to 11.422bn m³ for 2024-25, up by 1.1pc from a year earlier. Sales to the household sector are predicted to grow by 3.4pc to 2.8bn m³, after unusually warm weather during the summer and winter of 2023-24. Supplies to the industry and commercial users are also anticipated to edge up by 0.3pc to 8.6bn m³ during the period. The optimistic outlook came after a 10.1pc year-on-year fall in city gas sales for 2023-24. Tokyo Gas sold around 2.7bn m³ of city gas, down by 2.8pc from a year earlier, to the household sector to meet weaker weather-driven demand. Sales to the industry sector plunged by 20.1pc to 4.7bn m³ because of slower operations at their customers, while wholesale sales dropped by 3.2pc to 1.56bn m³. The falls more than offset a 2.3pc rise to 2.3bn m³ in the commercial sector where hotter than normal summer weather boosted city gas demand for cooling purposes. Tokyo Gas forecast temperatures in its service area to average 16.4°C in 2024-25, down from the previous year's 17.5°C. Fellow gas retailer Toho Gas forecast its city gas sales to increase by 1.2pc from the previous year to 3.4bn m³ in 2024-25, with supplies to residential users rising by 5.6pc to 595mn m³ and sales to the industry and commercial sectors edging up by 0.3pc to 2.8bn m³. The company sold 3.37bn m³ of city gas in 2023-24, down by 2.4pc from a year earlier, pressured by the warmer weather. City gas sales by Saibu Gas are expected to rise by 2.3pc from a year earlier to 940mn m³ in 2024-25. The company expanded sales by 3pc to 919mn m³ in 2023-24. Possible increased city gas sales in 2024-25 would increase demand for its main feedstock of LNG. But the 2024-25 sales forecast by Tokyo Gas and Toho Gas would remain lower compared with their 2022-23 sales. Japan's city gas production in 2022-23 totalled 35bn m³, which required 25.5mn t of LNG, according to trade and industry ministry data. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s JBIC to finance Chilean copper mine development
Japan’s JBIC to finance Chilean copper mine development
Osaka, 26 April (Argus) — Japan is enhancing its financial support for the development of copper mines in Chile, as part of efforts to increase its self-efficiency of base metals. State-owned Japan Bank for International Co-operation (JBIC) on 25 April signed a $248mn loan agreement with Chile-based joint-venture Compania Minera Arqueros (CMAQ) to finance development of its Arqueros copper project in Chile. CMAQ is 80pc owned by Japanese copper producer Nittetsu Mining and 20pc by Chilean firm Fondo de Inversion Privado Talcuna. The load will be co-financed by other Japanese private-sector financial firms, including Sumitomo Mitsui Banking, Mizuho Bank and MUFG Bank. The total co-funding will be $355mn. CMAQ plans to use the funding to develop Arqueros, located 35km northeast of La Serena. The mine is expected to produce 1.8mn t/yr of crude ore and 55,000 t/yr of copper concentrates for 15 years. The company aims to start operations in 2026. Nittetsu is to secure all the output from the project. The latest deal follows last month's loan agreement by JBIC and other financial institutes to provide $2.5bn to develop the Centinela copper mine in Chile . Japan relies on all its copper concentrates demand from imports, which has prompted the government to secure long-term and stable supplies of copper resources. The country's strategic energy plan has a target to achieve at least an 80pc self-sufficiency for base metals, including copper, by 2030. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more