For the second time, Perenco Guatemala Limited was awarded a 25-year contract to operate the pipeline from Campo Xan in Petén to the Piedras Negras oil terminal in Izabal.
After multiple delays were reported in the tender, the Ministry of Energy and Mines of Guatemala was able to award the new contract, which was signed on June 18 by both parties and published on July 24 in the newspaper of Central America.
Because of the fact that in the first six months of the year Guatemala's oil bill totaled $1,440 million, 6% more than what was reported in the same period in 2018, businessmen in the sector project a rise in sales at the end of 2019.
Figures from the General Directorate of Hydrocarbons (DGH) of the Ministry of Energy and Mines (MEM), specify that between the first half of 2018 and the same period of 2019, the amount of the oil bill, which includes the cost of importing oil derivatives such as gasoline, diesel, bunker, asphalt, kerosine, butane, gas, petcoke, among others, increased by $78 million, going from $1,362 million to $1,440 million.
Because the Guatemalan authorities were not able to form the Tender Board, a new date will be set for the receipt of tenders for the operation and administration of the Stationary Hydrocarbon Transport System.
Although the deadline for tendering for the pipeline had already been extended in November last year and March 14, 2019 was set as the deadline for submission of proposals, the authorities of the Executive failed to form the Board and now a new deadline will have to be announced.
March 14th, 2019 is the new date scheduled by the Guatemalan authorities to receive offers for the operation and administration of the Stationary System for the Transport of Hydrocarbons.
After last July were found disadvantages in the proposal presented by Perenco, the only bidder in the last contest and current administrator of the pipeline, it was decided to make a new process.
During the first half of this year, countries in the region imported petroleum oils for $5.122 million, 23% more than in the same period in 2017.
Figures from the information system Market of Petroleum Oils and Bituminous Mineral in Central America, from the Trade Intelligence Area of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Due to the upward cycle of the barrel international price, between January and August the country has bought $1.844 million in petroleum products, 22% more than in the same period of 2017.
Regarding this growth in the import amount, Enrique Melendez, executive director of the Guatemalan Association of Gasoline Dispensers, explained to Prensalibre.com that "...
Due to discrepancies found in the proposal presented by Perenco, another tender will be held to grant the operation and administration of the Stationary Hydrocarbon Transport System in concession.
In its resolution, the Qualifying Board explained that some inadequate elements were identified in the Perenco proposal, which necessitate a new tender in the coming months. According to the document, Perenco Guatemala, the sole bidder in the process, did not set a deadline for the contract, even though the published tender conditions established a maximum term of 25 years, with the possibility of extension.
Perenco Guatemala, the current operator of the pipeline, was the only bidder in the tender to obtain the concession for the operation and administration of the Hydrocarbons Transportation Stationary System.
The contract to operate the system includes a 425 kilometer pipeline, five pumping stations and the Piedras Negras export terminal, in Puerto Santo Tomás de Castilla, and the model of the contract to operate and manage it will be for a maximum of 25 years, with an option to extend.
In Guatemala, companies interested in operating and managing the Hydrocarbons Stationary Transport System are invited to present their offers on June 15.
Representatives from the Ministry of Energy and Mines (Mem) stated that the Qualification Committee, which will be appointed by an agreement, will be in charge of receiving technical-economic offers from 9:00 a.m.
The Ministry of Energy and Mines reports that the process to tender the operation of the pipeline has been approved by the Attorney General's Office.
Without giving further details on the terms of the contract for the operation of the pipeline, currently the responsibility of Perenco, the Minister of Energy and Mines, Luis Chang, stated that the bidding process received a favorable ruling and is progress is being made.
The Guatemalan government has finally approved the contracting model and promises to launch the bidding process within the next four months.
At the end of 2016 the Ministry of Energy and Mines announced that it was beginning to prepare, at that time, a plan to call a new tenderand grant a concession for the operation of the pipeline, currently in the hands of Perenco, to a new company. Due to delays in the process, in February last year the contract with Perenco was extended for 18 months, meaning that August would be the deadline for the new launch.
During 2016 the ten active oil fields produced a daily average of 8,976 barrels, below the 2015 average of 10,000 barrels per day.
Last year total production was 3,285,442 barrels, 10% less than the 3,664,279 barrels produced in 2015.
"... According to the expert Arturo Letona, for over two years no investments in developing new fields have been observed and in the short term it is not expected that there will be a context of rising oil prices on the international market. Letona said that the message for investors with the decisions taken by the Constitutional Court (CC) is one of uncertainty."
After the expiration of the concession currently held by Perenco, a tender is to be launched for the operation of a pipeline connecting the Xan field in Peten with the oil terminal in Piedras Negras.
Elperiodico.com.gt reports that "...Vice President Jafeth Cabrera, after a meeting in Puerto Barrrios, Izabal, said the contract with Perenco which expires next year will be extended by no longer than six months in order to realise the tender."
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.
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.