As part of an agreement ending a dispute on Venezuela’s Corocoro oil field project, state oil firm PDVSA will award ConocoPhillips a natural gas exploration license in the area. ConocoPhillips agreed to a 16.7% flat royalty in February, which is higher than the amount specified in its original agreement. Venezuela’s oil minister Rafael Ramirez has said that PDVSA will revise several agreements with foreign energy firms because their conditions are financially detrimental to PDVSA.
Category: Paywall
Posted inDaily Brief
PEOPLE 2005
The Brazilian government has confirmed Elifas Gurgel do Amaral, 49, as president of Anatel, the federal telecom regulatory agency. Gurgel, an engineer and reserve army colonel, had taken over on an ad hoc basis in January. He is a close ally of Communications Minister Eunício Oliveira and member of the PMDB party, a member of the ruling coalition. The government picked Gurgel over senior career Anatel officials, despite opposition from Finance Minister Antonio Palocci and telecom operators concerned that nominally independent Anatel is losing its autonomy. Brazil has one of the largest and fastest-growing telecom markets in the developing world.
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Ecuador Rejects Reform Package
Ecuador’s congress overwhelmingly rejected 68-3 government draft legislation giving the private sector a greater role in the state-run pension system and government-controlled oil industry, improving the quality and structure of the country’s public finances. President Lucio Gutiérrez fired the entire Supreme Court in December, poisoning relations with the opposition-dominated congress.
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EFE Issues Bonds
Chile’s state-owned railway company Empresa de Los Ferrocarriles del Estado (EFE) plans to issue bonds worth $102 million on April 7. The bonds will have an interest of 5.2 percent and will mature in 30 years. The debt is guaranteed by the Chilean government and is rated AAA by Fitch Ratings.
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Arauco Plans Bond Issue
Chilean pulp maker Celulosa Arauco y Constitucion (Arauco) plans to place a $300 million bond issue on the New York Stock Exchange April 12. The company has begun a road show to advertise the sale that will travel to Singapore, Hong Kong, London, Boston and New York. JP Morgan is the lead manager of the issue.
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Fiat Invests Despite Losses
Italy’s Fiat announced it will invest $500 million in its Brazilian subsidiary through 2007 to launch new models in the highly competitive local market. The state of Minas Gerais, where the Fiat plant is located, will finance part of the investment. The company has invested over $1 billion in Brazil, its second largest market, since 2002. Fiat SPA lost €1.59 billion in 2004, its third year of losses.
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Banks Back CVRD
Brazil’s biggest mining company Cia. Vale do Rio Doce (CVRD) says it has increased its program of committed bank lines to $650 million from $500 million. A syndicate led by HSBC structured the transaction to ensure disbursement independent of shifts in sovereign risk. The new two-year facility has an annual commission fee of 0.3%, and annual interest rate of 075% over Libor if Vale activates the loan. Vale began the backstop program in May 2004 but has not had to draw on the line.
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Iberdrola Plans Investments
Spanish power company Iberdrola plans to invest $510 million to increase its installed capacity and improve its distribution networks in Mexico and Brazil. The company’s installed capacity in Mexico currently stands at 2,700 megawatts and the company hopes to bump that number up to 5,000 megawatts by 2007. Iberdrola also plans to expand in Greece and Portugal, where it has recently begun operations.
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Belize’s Rating Cut
Standard & Poor’s cut Belize’s foreign-currency debt rating two levels to CCC, or eight levels below investment grade, citing the country’s increasing debt load and lack of access to financing. S&P has a “negative” outlook on Belize’s rating. Belize faces amortizations this year of $150 million, compared with $139 million in international reserves. The country’s debt-to-gross domestic product ratio climbed to 97 percent last year, from 85 percent in 2003.
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LatinFinance releases ‘Best Companies’ survey
LatinFinance has launched its 2005 survey to identify the Best Companies in Latin America — and the men and women who make them successful. The short survey asks investors and analysts to weigh in on which companies have the best strategies for success as measured by growth, good corporate governance, outstanding investor relations and other factors. The results of the poll — including the names of the best business leaders in the region — will appear in the June issue of LatinFinance. To take the survey, click here