The current national accounts methodology could be causing an underestimation of the value and potential of an industry that has become a success.
In his article in Ca-bi.com, Paulo de León objects to the failure to update the Guatemalan national accounts system, resulting in an underestimation of the weight of the sector in the Guatemalan economy, as that system does not incorporate the shift in the energy matrix towards renewable energy.
In the last two years the country which is the Latin American champion in wind energy lost $63 million a year from purchasing wind MWh at $70 and having to resell it at $7.
We are in agreement with the need to contribute to the sustainability of human development on this planet, and the need to transform the energy matrix of countries in order to become less dependent on oil, but the balance of the cost of this transformation needs to be adequate, in order to avoid making the kind of mistakes committed by the government of Uruguay.
The decline in global prices is the main reason behind the abandonment of several areas on the part of concessionaires, added to which is confusion around the mining moratorium.
Guatemala went from extracting 9 million barrels of oil in 2003 (a daily average of 24 thousand barrels) to just 3 million in 2015 (10 thousand barrels per day), recording a drop in production of 59.4% in twelve years. Factors such as the rapid decline in oil prices, lack of implementation of contracts and lack of transparency continue to affect the competitiveness of companies interested in investing in exploration and exploitation.
The state run oil company in Costa Rica registered losses above $24 million during the first nine months of 2015, despite having the highest prices in the region.
In the first nine months of 2015 the Costa Rican Oil Refinery lost more than $24 million. The state run company, which has had a monopoly in refining and sale of fuels in Costa Rica for more than half a century, has payroll costs representing 56% of its total expenditure.
Prices of a gallon of regular gasoline: Panamá $2.35, El Salvador $2.37, Guatemala $2.42, Honduras $3.11, Nicaragua $3.13, and Costa Rica, $3.75.
From a statement issued by the Ministry of Economy of El Salvador:
Variations in international prices of refined products (gasoline and diesel) over the last few weeks have influenced prices in Central America, allowing El Salvador to be located first in terms of the lowest prices in gasoline, and second for the lowest price in diesel.
The decline in international oil prices is already affecting companies that exploit the resource in the country, meanwhile, contracts awarded in 2014 have not yet been signed.
Authorities at the Ministry of Energy and Mines (MEM) and the companies that received concessions to explore and exploit oil in the country predict a significant decline in investment in the sector this year, due to the downward trend in oil prices in the international market. This year it is expected that three contracts that were awarded in 2014 will be signed, and also "... the possibility of an oil tender has arisen, for which several blocks in Alta Verapaz and Peten have been earmarked."
At the end of August 2015 production was 2.4 million barrels, 2.5% less than in the same month in 2014, mainly because of lower investment on the part of operators.
Low international oil prices are the main reason that companies drilling and extracting oil in the country have reduced their investments and therefore their production, taking advantage of the situation to carry out maintenance work in the fields.
In the first three months of the year imports totaled $3.679 billion, 18% less than the same period in 2014, due to falling oil prices and lower demand for raw materials for industry.
The reduction in purchases of inputs for the electrical and electronics industry, plus the decline in the oil bill are the main factors accounting for this drop in national imports. As a result the trade balance has also experienced a decline of 21% in the first quarter, compared to the same period last year.
Gallon of regular gasoline: Panama $2,81, El Salvador $2,98, Guatemala $3,01, Honduras $3,60, Nicaragua $3,63 and Costa Rica $4,04.
During April, the price of WTI (West Texas Intermediate) in the Gulf Coast of the United States had an average value of $51.11 per barrel, an increase of + 7.94% compared to the previous month. In recent weeks the international prices of petroleum products recorded the following variations: -2,09% in special gasoline, -1,46% for regular gasoline and -3,53% in diesel.
During March, the price of WTI (West Texas Intermediate) in the Gulf Coast of the United States had an average value of $48.67 per barrel, which is a decrease of -1.93% compared to the previous month. In recent weeks the international prices of petroleum products recorded the following variations: +4,3% in special gasoline, +4,7% for regular gasoline and -6,2% in diesel.
During the month of February, the price of WTI (West Texas Intermediate) in the Gulf Coast of the United States had an average value of $49.63 per barrel, showing a variation of + 10.81% compared to the previous month. In turn, in recent weeks the international prices of petroleum products recorded the following variations: + 18.49% in special gasoline, + 24.54% on regular gasoline and + 13.43% in diesel.
Civil Engineer construction, general contractor, gas pipeline and oil pipeline construction, petrochemical installation, fiber optic installation, highway and road construction.
Operates in Costa Rica, El Salvador, Guatemala, Honduras and Panama
Phone: (502) 4089 7819
Cummins Power Generation Inc. is a worldwide provider of electrical generators and power generation systems, components and services in standby power, distributed power generation, as well as auxiliary power in mobile applications to meet the needs of a diversified customer base.
Operates in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama
Phone: (1-800) 888–6626