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BUSINESS GUARDIAN guardian.co.tt MARCH 2 • 2017
Jamaican refinery due
The governments of Venezue-
la and Jamaica have final-
ised an agreement to under-
take the long-planned ex-
pansion and modernisation
of their Petrojam Ltd joint
venture's 36,000-b/d hydroskimming re-
finery in Kingston, Jamaica (OGJ Online,
Apr 28, 2006).
Formally executed in mid-February, the
agreement calls for the joint funding and
execution of the Petrojam Refinery Upgrade
Project (PRUP), which will expand the hy-
droskimming plant into a full-conversion,
50,000-b/d refinery, the governments of
Venezuela and Jamaica said.
Alongside adding 14,000 b/d of crude pro-
cessing capacity, PRUP also will include unit
capacities for vacuum distillation, delayed
coking, and diesel desulfurisation, according
to Jamaica's Ministry of Science Energy &
As part of the agreement, the post-ex-
pansion Petrojam refinery---which currently
imports the bulk of crude feedstock from
Venezuela and Mexico---will increase its re-
ception and processing of Venezuelan heavy
crude blend Merey 16 (16° API gravity) from
the Orinoco belt, Venezuela's Ministry of
Petroleum (MOP) said.
With a formal deal for PRUP now in place,
the countries plan to form a taskforce in the
next month that will be responsible for final-
ising contractual arrangements with general
contractor Sinohydro Corp Ltd of China,
which alongside providing engineering,
procurement, and construction for PRUP,
also will undertake financing of the project,
Previously estimated at an overall cost
$758 million in 2008, PRUP will now require
a capital investment of about $1 billion to
complete, MSET said.
PRUP follows a series of agreements be-
tween Jamaica and Venezuela under the Pet-
roCaribe trade initiative established by the
late Venezuelan President Hugo Chávez in
2005 to assist Caribbean islands in meeting
their energy requirements at reduced costs
amid high oil prices (OGJ Online, July 18,
Petrojam is a subsidiary of state-owned
Petroleum Corp of Jamaica 51 per cent and
Venezuela's state-run Petroleos de Vene-
zuela SA (PDVSA) 49 per cent.
Part of Jamaica's plan to ensure long-term
competitiveness and viability of the refin-
ery---the island's only---PRUP was delayed in
2010 amid financial constraints facing both
the Jamaican and Venezuelan governments,
according to MSET's latest annual report.
Resuscitated in 2014, the modernisation
project will upgrade the refinery to meet five
major objectives, which include increasing
production of finished products to meet
both local and export demand; improving
unit processing efficiencies; improving
production quality to meet more stringent
environmental standards; diversifying the
slate of finished-product output; and broad-
ening flexibility to efficiently and profitably
process a wider variety of crudes, Jamaican
Prime Minister Andrew Michael Holness
said in his budget presentation for 2016-17.
PRUP was to include upgrades to the refin-
ery's existing crude distillation, gas recovery,
and kerosine hydrotreating units, as well as
the addition new unit capacities.
Petrojam also plans to install a wastewater
treatment plant as part of the project, MSET
BHP worried US protectionism could stunt growth
The head of the world's biggest mining company
intensified his warnings that US trade protectionism
under President Donald Trump would threaten global
growth and the fight against poverty.
While applauding efforts by the administration to
boost US growth and infrastructure spending, BHP
Billiton Ltd chief executive officer Andrew Mackenzie
said the consequences of restricting free trade would
be "pretty bloody awful."
BHP, which is also the largest overseas investor
in US shale, "is very anxious about the possibility
that instead of that good leadership, we could have
bad leadership from the US on global free trade," the
Scottish-born executive said in an interview with
Bloomberg TV at a conference in Florida Monday.
Global long-term growth is about three per cent
but needs to be four per cent to get more people out
of poverty, he said. "And that won't happen under
a protectionist regime and protectionist leadership
in the US."
Mackenzie and chairman Jacques Nasser met
Trump in New York last month, before his inaugu-
ration, to discuss the resources sector. BHP is a partner
in Arizona's Resolution copper project with Rio Tinto
Group, which has urged the new administration to
Mackenzie's concerns echo those from leaders of the
world's biggest banks, which have warned investors
of Trump's potential to roil markets and slow global
trade. Standard Chartered's CEO Bill Winters, the
former head of JPMorgan Chase & Co's investment
bank, said last week that he's mapping out scenarios
"if things get very messy and we get into the trade-
So far, many investors appear unruffled, driving
equity gauges including the Dow Jones Industrial
Average to record highs. Stocks have risen as cor-
porate results and European growth figures boosted
optimism that the Trump administration will only
bolster already-strengthening economies.
After years of cutbacks to cope with low prices,
the industry is trying to figure out what to do with
the windfall, Mackenzie said, and how much should
go back to shareholders versus being reinvested to
secure future production.
rises to 60%
The non-OPEC producers that have signed up to
the supply-cut deal forged by OPEC to boost oil prices
and rebalance the market have been improving on
their initially low compliance with the production
cuts, and are now adhering to at least 60 per cent of
According to OPEC delegates briefed by Reuters,
compliance by the 11 non-OPEC nations---led by Rus-
sia---is now somewhere between 60 per cent and 66
per cent, higher than earlier projections for a 40-per
cent compliance rate.
The 11 non-OPEC signatories to the deal have
pledged to cut 558,000 bpd of their combined pro-
duction between January and June, joining OPEC's
plans to shave off 1.2 million bpd of the cartel's to-
tal production in the first half of 2017. Out of the
558,000-bpd non-OPEC cut, Russia has pledged
to curtail output by 300,000 bpd, but would do so
gradually over the first six months of the year. So
far, Russia has said that it reduced output by 117,000
bpd in January.
A meeting of the officials from the monitoring
committee on the cuts---which includes OPEC's Ku-
wait, Venezuela and Algeria and non-OPEC Russia
and Oman---was held on Wednesday and reviewed
"This meeting shows the seriousness of OPEC
and non-OPEC in implementing the agreed cut,"
one OPEC delegate told Reuters
The officials of the monitoring committee also
reviewed OPEC's compliance, which international
agencies, oil analysts and OPEC itself have pegged
at exceeding 90 per cent in January.
Iraq says proven oil
reserves rise to 153 bb
Iraq says new exploration has revealed an additional
10 billion barrels of oil, bringing its total proven re-
serves to 153 billion barrels.
Oil Minister Jabar Ali al-Luaibi said in a statement
Sunday that the increase comes from seven oil fields
in central and southern Iraq, without naming them.
He says Iraq will ask the Organization of the Petro-
leum Exporting Countries to adopt the new figure.
Iraq will remain the fourth largest OPEC member,
after Venezuela, Saudi Arabia and Iran.
Oil revenues make up nearly 95 percent of Iraq's
budget. Like other oil-exporting countries, its econ-
omy has been hit hard by plummeting prices.
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