Oil prices - Jorge Neri Bonilla

Goldman Sachs has lowered oil prices forecasts for this year and the next one, arguing that values will continue to be low to guarantee that the supply will be reduced along time.

“We caution that a premature recovery in oil prices could curtail an oil supply correction, and prove self-defeating”, a team of the influential investment bank said in an equity research note, Reuters reports.

The bank said it expects the Brent to average $39 per barrel in 2016 and $60 in 2017, a downgrade with respect to previous forecasts of $45 and $62, respectively.

Goldman also cut its forecast for the West Texas Intermediate (WTI) by $7, reaching $38 per barrel for 2016 and by $2 for 2017, to $58.

According to the bank, the output will not reach the previous highs until mid-2018, as it foresees a slower recovery until next year, and deeper lows in production in 2016.

Prosafe

El operador noruego Prosafe retirará dos plataformas offshore de México por los bajos precios del petróleo y por el recorte de más de 5.500 millones de dólares que ha realizado Pemex en su presupuesto para este año.

“Pemex ha estado recortando su gasto para ajustarse a un presupuesto que considera un precio del petróleo de 25 dólares el barril. En consecuencia, el cliente mexicano de Prosafe, Cotemar Group, ha recibido un impacto directo”, indicó la compañía noruega en un comunicado.

De acuerdo con la información facilitada por Reuters, a mediados de este mes, las plataformas Safe Lancia y Safe Regency, que operan mar adentro, detendrán su actividad. Safe Lancia tendría que estar operativa hasta finales de 2016, mientras que en el caso de Safe Rengecy la fecha se alargaba hasta 2017.

La decisión supone que las cinco plataformas costa afuera de Prosafe en México y diez de las 14 de la empresa no funcionarán, apunta Reuters.

El nuevo director general de Pemex, José Antonio González Anaya, aseguró la semana pasada que era necesario hacer un ajuste de 5.500 millones de dólares en el gasto en respuesta la caída de los precios internacionales del crudo.

La petrolera estatal mexicana prevé que la mezcla mexicana promedie en los 25 dólares el barril este año, frente a los 50 dólares estimados en la Ley de Ingresos 2016, y una producción de 2,13 millones de barriles al día, frente a los 2,26 millones extraídos de media durante 2015.

“Pemex se enfrenta a un problema de liquidez a corto plazo, no de solvencia”, aseguró González Anaya, por lo que hará “un ajuste enorme”.

La compañía registró las mayores pérdidas en su historia en 2015, lo que le ha llevado a tomar medidas de ajuste. “Así de difícil es el cambio en el mundo, así de grande es el ajuste”, indicó el director general de Pemex. “Será un proceso difícil de llevar a cabo”, pero afirmó sentirse “optimista de los prospecto hacia delante” por las oportunidades que abrirá la Reforma Energética.

Post by: Jorge Neri Bonilla

Schlumberger - Jorge Neri Bonilla

El mayor proveedor de servicios petroleros, Schlumberger, anticipa una caída de sus ingresos del 15 por ciento en el primer trimestre del año con respecto al último de 2016.

Según la compañía, esta disminución se debe al recorte del gasto que han realizado los productores de petróleo anticipándose a un largo periodo de bajos precios del crudo.

De este modo, Schlumberger prevé unos ingresos de 6.500 millones de dólares entre enero y febrero. Esta cifra estaría por debajo de las estimaciones de los analistas, que habían previsto unos ingresos de 6.940 millones de dólares.

La compañía ya sufrió pérdidas de 1.000 millones de dólares en 2o15, lo que le llevó a tomar medidas como seguir reduciendo su fuerza laboral, en concreto, despedirá a otros 10.000 empleados.

Desde junio de 2014, la industria está superando distintos periodos de recorte de gastos en exploración y producción, y en concreto, las medidas anunciadas por la mayor parte de la industria sería la tercera oleada de rebajas en los presupuestos. Según el presidente ejecutivo de Schlumberger, Paal Kibsgaard, esto tendrá un impacto considerable en el beneficio por acción, tanto en el actual como en el de los próximos trimestres.

Kibsgaard también hizo hincapié en la necesidad de un cambio en las funciones de la industria energética y más en un escenario actual de bajos precios del petróleo. Así, indicó que los recortes en los costes de los productores en los últimos 18 meses no están relacionados con mejoras en la eficiencia, sino más bien a las reducciones en las condiciones económicas de los proveedores de servicios petroleros.

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Pemex - Jorge Neri Bonilla.png

Oil production decrease in Mexico, due to Pemex’s budget cut by more than $5.5 billion, will cause the states’ allocations to drop by 3 percent as compared to those planned in the Federation’s Expense Budget (PEF in Spanish) of 2016, as informed Moody’s yesterday.

“The production cutback is a negative factor for the Mexican states, which depend on budgetary allocations from the federal government,” warned the credit rating agency.

As a consequence of Pemex’s budget adjustment plan, the Mexican oil company’s output will be reduced to an average of 2.1 million barrels per day, 100,000 less than 2015, according to the company’s chief executive José Antonio González Anaya, who recently replaced Emilio Lozoya as the head of the Mexican state-productive oil company.

On February 29, González Anaya stated that the reduction would affect the production of extra heavy crude oil and unconventional oil fields, “which tend to be more expensive”, he said.

“If this drop becomes a reality, we believe that the shortage may be compensated with resources from the Fund for the Stabilization of Revenues of Federal Entities (FEIEF in Spanish), a contingency fund for state and municipal governments used in case of a decrease in allocations,” said Moody’s in its report.

The credit rating agency estimates that the FEIEF has $2.1 billion, which is 3 percent of the allocations established in the PEF 2016, or 6 percent of the ones presented in 2015.

Pemex’s chief executive stated before the Chamber of Deputies’ Political Coordination Board that the adjustment of the state-productive company was necessary, since it addresses the company’s liquidity problems.

Pemex reduced its budget 2016 by 22 percent after recording its worst losses, almost $30 billion.

Post by: Jorge Neri Bonilla

Energy self-supply - Jorge Neri Bonilla

There are really controversial topics, and energy self-supply is one of them. It was regulated in Spain in late 2015 and it is still being discussed. It leads to intense discussions and is the new shim between renewable energy and conventional electric companies. If you are in favor of self-supply, you are labeled and if you criticize it you are labeled too. In a context where vague statements are invalid, it is necessary to document both figures and arguments, as well as to observe other countries to analyze regulations regarding this issue and their consequences.

As a context for the case of Spain, it should be noted that the country accumulated an electricity debt (electricity tariff deficit) of €30 billion ($32.76 billion) due to the fact that income received by the system via the electric bill is not enough to cover its costs, including incentives to renewable energy, compensation to transport and distribution, or very different variables like forest cleanup operations or the Renovation Plan for tractors.

It is also worth noting that these costs increased exaggeratedly during the past decade, when Spain led the promotion of renewable energy through premiums or incentives promising profitability during 25 years. The pull effect came immediately and incentives to these technologies amounted to €9 billion ($9.8 billion), reflected in the electric bill.

The most remarkable case was photovoltaic energy, which multiplied its installed capacity by more than five times in only twelve months (see figure 1).

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At that time, this technology was still developing its learning curve. “We paid for Research and Development (R&D) of the rest of Europe,” said sources from the Ministry of Industry to justify sharp cuts made especially on this technology and the rest of renewables, in general.

The high cost of premiums for renewables, apart from many other factors, has caused Spain to charge one of the most expensive electric bills in Europe, in a moment when the economic crisis has devastated the country with an unemployment rate above 20 percent.

It is also true that this strong commitment to clean technologies was driven by goals set by the European Commission by 2020. By that moment, 20 percent of energy generated should come from renewable sources, independently of the GDP of each member country.

But the economic recession changed everything and Brussels threatened Spain to include its electricity debt as a public debt, which would leave Spain in an even more difficult situation before the Troika. Mariano Rajoy’s administration then addressed the so-called energy reform, which included doubtfully constitutional cuts, finally supported by tribunals, as commitments established in the Official State Gazette (BOE in Spanish) were being wrecked.

After the shock caused by regulatory cuts, where profits of electric companies in Spain hit a 2005-low and some renewable energy companies like Acciona recorded losses for the first time and other companies went bankrupt, energy self-supply arises as one of the new paths for technology growth, also incentivized via the electric bill.

The first reaction of the government was to postpone its regulation, and its statements on this new consumption modality only showed a negative tone. From a regulatory point of view, they wanted to avoid the bad previous experience when legislating about incentives to clean technologies.

The core of the discussion is one of self-supply modalities. On the one hand, there are users wishing a solar panel on their roof to generate their own energy, but they also recognize that they will have no electricity during dark hours as they are not connected to the system.

On the other hand, there are self-suppliers that will continue to be connected to the system to receive electricity during dark hours. There are two options regarding this modality: those who can transfer their energy surplus to the system for free and those who do it for money but must be registered with the electricity producers’ registry, complying therefore with relevant obligations of the activity (VAT declaration, tax payment of 7 percent, etc.)

This second option is the controversial one. Arguments against self-suppliers who will remain connected to the network focus on system costs they would no longer pay for, as they will not receive an electric bill consistent with the system use (the bill contains a fixed fee and a variable fee, where access charges proportional to consumption are also included).

That is why the new regulation approved forces self-suppliers to pay for all the system’s access charges and fixed costs. Electric companies say “if they use the network, paying for it is fair.” Renewable energy supporters instead state that “paying the same amount for something that will be used to a lesser extent is illogical.”

The Minister of Industry is on the side of electric companies and argues that, in the event that self-suppliers do not contribute to the system’s costs, “then costs should be split among the remaining non- suppliers, thus increasing the cost of their electric bills,” which would be “unfair”, as general costs of the system are totally unrelated to self-supply, as well as “regressive” as the “most vulnerable” consumers would be those facing more difficulties to achieve self-supply.

In this regard, a report from the Boston Consulting Group supported by electric companies states that, under the current Royal Decree, self-supply will have a sustainable impact on the Spanish electric and fiscal system of €64 million ($69.8 million) per each point of penetration into the domestic sector. The consulting firm warns that more cost exemptions to self-supply could increase the price of electricity by up to 6 percent and would have an impact of between €860 million and €1.8 billion ($938 million and $1.9 billion, respectively), with a penetration of 10 percent.

It is worth mentioning that the International Energy Agency and the European Commission have stated that self-suppliers that remain connected to the network must pay for their part of network’s costs, but avoiding discriminatory charges.

From the opposite point of view, figures are very different. José Donoso, general director of the Spanish Photovoltaic Union (UNEF in Spanish) assures that figures regarding self-suppliers will not represent a problem for the system regarding costs. “With the most favorable regulation for us, self-supply will not represent more than 200-400 MW per year,” said in a statement for Energía16.

According to calculations from this trade association, in the most favorable scenario, the system would no longer receive €2.6 million per each 100 megawatts of self-supplied energy. So, “in the end, this is not a matter of costs because the amount is ridiculous,” Donoso says, who subsequently claims “what actually concerns them is the potential competition with electric companies.”

In this regard, traditional electric companies defend themselves by arguing that, although this is not a priori a matter of costs, self-supply can reach a certain dimension. “The more favorable the regulatory scenario for self-supply is, the greater the penetration will be,” they say. In addition, they assure that networks are not planned for huge bidirectional movements.

One of the problems is that the new regulation prohibits consumer associations, like neighborhood associations. Ideally, a consumer’s surplus could be used by another close consumer, as problems in networks arise when electricity is transferred upstream. In this case, electric companies would have problems at the distribution network and finally enhancing the electric mesh would be necessary, representing, therefore, an additional cost paid by users via the electric bill.

As from the operation of the system, self-supply would also have to overcome an important challenge. Incorporating more than 27,000 MW of renewable installed capacity into the system has been an important milestone for Red Eléctrica, and they do not hide their fear that self-supply grows to an extent that Red Eléctrica has no choice but to implement new operation procedures.

Finally, the approved regulation has been deemed deterrent by UNEF, as it represents an obstacle for self-supply instead of encouraging it -as the European commission expects-. Therefore, this association has achieved the commitment of the opposition of the Popular Party as a block (18 political parties) to repeal the Royal Decree and draft a regulation excluding the payment of fixed access charges.

Experts of the sector believe the problem is that the self-supply regulation is not deterrent, but the electric system itself and its tariffs, as clients should pay for fixed costs not related to consumption. The National Commission for Markets and Competition (CNMC in Spanish) proceeded accordingly, by taking a stance in favor of a new tariff methodology that would make the development of self-supply more viable, but the government has not wanted to make any modification in this regard.

Briefly, the photovoltaic association deems necessary to lift the obligatory nature of the payment of access charges related to both wattage and consumption. “Paying for something you don’t use is unbearable,” Donoso states. The association also demands allowing collective self-supply as it would be more efficient and the French case, in which this modality is allowed, could be imitated. Thus, cooperatives could be allowed.

On the other hand, the UNEF also deems necessary to eliminate administrative barriers, in particular for very small projects that will transfer nothing to the network. Under the current law, these projects must request an access feasibility study while, for example, Portugal only requires an Intranet notification. The last section to be eliminated would be penalties to batteries, which is a barrier for self-supply and which implies paying for the power contracted.

Upon the approval of the regulation, the repayment term expected for this kind of facilities has increased, although the cost has not stopped decreasing worldwide since 2009. (See figures 2 and 3).

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Investment is more interesting and bearable in small and medium companies, as a great part of the energy generated can be harnessed at the moment it is produced, enhancing the profitability of the facility and the competitiveness of the company. The photovoltaic association itself says that under the current regulation “figures don’t work” for domestic consumers.

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With respect to regulations in other countries, many of them apply the so-called Net Balance: when a self-supply facility generates more energy than it consumes at that moment, the surplus is transferred to the network. Otherwise, when the facility needs electricity and it cannot produce it, for example during sunsets, it takes an amount of energy equivalent to what it transferred to the network during the day. USA, Canada, Australia, Belgium, Brazil, Chile, Denmark, France, Germany, Israel, Italy, Japan, Mexico, Switzerland, the Netherlands and Great Britain have already implemented similar systems. Meanwhile, a PwC report shows how other countries are adjusting their remuneration schemes to energy generated, for example the United Kingdom.

A report managed by Diego Crescente, partner and head of the Energy Division of MAS Consulting Group, points out that self-supply must be understood as a “citizen’s right to supply on his own, and also as a corporate right to manage the country’s energy resources properly.” Meanwhile, governments must help their electric systems to promote this kind of tools, with new tariff methodologies not discriminating self-suppliers while not penalizing the remainder of consumers.

How self-supply is regulated in other countries

PORTUGAL

– Net Balance: the surplus is paid at 90 percent of the market price.

– It allows developing self-supply for up to 1 MW without any type of access charge. For the remaining powers, this country has introduced a system of charges to growing self-supply with the total installed power.

– Designed to increase competitiveness in the industry and cost reduction for the services sector.

– Facilities that link self-supply to an electric car or a thermal solar energy are rewarded.

– No storage restrictions.

UNITED STATES

– 43 states have already regulated self-supply with Net Balance, a system through which the unconsumed surplus is transferred to the self-supplier.

– For example, California uses Net Metering. This is defined as an existing agreement between the company and the consumer-supplier through which the latter is granted credits for the electricity surplus (the consumer only pays for the net amount, apart from distribution expenses and other services.)

MEXICO

– In Mexico there is more energy generated than consumed, a credit payable to the self-supplier will be generated, which will be saved in an energy bank, being classified by the hourly period and month of the generation of the credit, which must be compensated during the following 12 months. On the contrary, if there is more energy consumed than generated, possible compensations will be made as far as there is energy in the bank.

  UNITED KINGDOM

– In recent years, the United Kingdom exceeded the £7.6 billion expenditure limit for subsidies to renewables. Therefore, the government has taken measures, such as reducing support for photovoltaic self-supply. In particular, it has cut incentives to domestic consumers by 87 percent (Feed-in Tariff), and it will disappear in 2019.

GERMANY

– Like in Spain, expenses in subsidies to renewables in Germany multiplied by six the cost for the domestic customers since 2007, making the German residential tariff as the second highest of Europe.

– To stop the tariff increase, domestic self-suppliers were ordered to contribute to the payment of subsidies to renewables borne by the rest of consumers. To that end, the German government set a charge according to energy consumed.

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Redexis Gas - Jorge Neri Bonilla.png

El fondo Goldman Sachs Infraestructure Partners prepara la venta de Redexis Gas por alrededor de 2.500 millones de euros (2780 millones de dólares), según informa El Economista.

Aunque desde la empresa de gas española no han querido hacer declaraciones, fuentes confirmadas por el medio aseguran que la operación se produciría una vez que España cierre un acuerdo de Gobierno, para eliminar la incertidumbres entre los inversores.

El fondo pretendería aprovecha la abundante liquidez del mercado para lograr un precio atractivo en la colocación. La regulación actual del gas ha mejorado notablemente la actividad de distribución, lo que facilita una operación de este calibre. Además, la compañía ha incrementado sus activos en un 45 por ciento en los últimos cinco años y podría realizar alguna adquisición adicional para poder lograr una valoración más atractiva.

Los grandes fondos internacionales como EQT, KKR, Ardian y Cinven, así como los grandes fondos de pensiones canadienses,  serían los mayores interesados en la operación, pero tampoco se descarta que Madrileña Red de Gas pudiera participar en la puja, afirma el diario económico. Entre los candidatos aparecen también el grupo canadiense CPP que se alió con Allianz o el fondo soberano Abu Dhabi Investment Authority (ADIA), así como el grupo canadiense PSP y la gestora de fondos europea Arcus, que se interesaron en su momento por Redexis.

La empresa española controla cerca de 8.700 kilómetros de gasoductos en 551 municipios de 26 provincias de España con 600.000 puntos de suministro lo que supondría valorar la empresa en 2.500 millones de euros. Su deuda ronda los 800 millones de euros (889 millones de dólares), mientras que su Ebitda registró los 115,8 millones, según los últimos datos anuales, a la espera de la publicación de las cuentas a cierre de 2015.

El fondo estadounidense Goldman Sachs Capital Partners se dispone también a desprenderse este año del 30 % que tiene en el grupo de restauración Vips, tras casi nueve años en la compañía.

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Repsol - Jorge Neri Bonilla

La petrolera española Repsol y la estatal colombiana Ecopetrol han suspendido temporalmente las actividades en el campo Akacías, en el centro de Colombia, debido a los bajos precios del petróleo.

La Agencias Nacional de Hidrocarburos (ANH) de Colombia autorizó esta paralización debido a que “a pesar de las eficiencias aplicadas, el campo no logra ser rentable en la coyuntura actual”, apuntó Ecopetrol en un comunicado.

Este campo produce de promedio “6.699 barriles diarios, de los cuales 3.684 corresponden a Ecopetrol y 3.015 a Repsol”, precisó la petrolera estatal.

El campo Akacías está situado en el bloque CPO-9, en el departamento de Meta.

Éste no es el primer campo que la petrolera estatal colombiana suspende las operaciones de un yacimiento por los bajos precios del petróleo. En el mes de febrero, Ecopetrol anunció que paralizaba la producción de petróleo en el campo Caño Sur Este, también en el departamento de Meta.

La paralización de estos campos hará que Colombia tenga aún más difícil cumplir con el objetivo de producción de un millón de barriles diarios este año. El país está intentando revitalizar el sector de los hidrocarburos, dinamizando las subastas para aumentar la inversión petrolera. Colombia tiene puestas sus esperanzas en los campos de aguas profundas para aumentar las reservas.

Además, las reservas de petróleo de Ecopetrol se redujeron un 11 por ciento en 2015, como consecuencia de la caída de los precios internacionales del crudo.

Post by: Jorge Neri Bonilla