Ecuador has said it will not seize the shares held by the US oil company Occidental Petroleum (Oxy) in the heavy oil pipeline Oleoducto de Crudos Pesados (OCP) Ecuador. Last week the government cancelled Oxy’s oil production agreement and took control of its assets in the country. Oxy has a 14.15% stake in OCP, the only private pipeline in operation in Ecuador, which has the capacity to transport up to 450,000 barrels of oil per day.
Category: Regions
Posted inDaily Brief
Peru May Go Long In Local Market
Peru is contemplating placing 30-year bonds in the local market, making them the longest maturing local-currency bonds issued by the sovereign to date. (Peru sold 20-year sol-denominated bonds on May 2, raising $40 million.) The government is considering issuing the longer-term paper to cover debt incurred from agrarian reform in the 1960s. Almost $1.5 billion of debt is still owed to landowners whose land was expropriated by the state. The bonds would be denominated in local currency and carry a fixed interest rate. No possible date was revealed for the offering.
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Colombian Energy Firms Invest In Peru
Colombia’s state-owned electricity company Interconexión Eléctrica (ISA) and state-run Empresa de Energía de Bogotá (EEB) have bought a stake in Hydro-Quebec’s Peruvian subsidiary Consorcio TransMantaro. The companies paid $67 million for the 57% share in the Canadian company’s subsidiary. ISA is Colombia’s largest energy provider.
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Bridgestone To Build Mexico Plant
Japanese tire manufacturer Bridgestone is to spend $81 million building a carbon black processing plant in Mexico. The plant, to be located in the port of Altamira, in the northern state of Tamaulipas, will boost the company’s global production and is due to be operational by June 2008.
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Gruma Expands Into Russia
Mexican company Gruma, the world’s largest manufacturer of tortillas, is to build two plants in Russia for an initial cost of $100 million. The plants are located in Moscow and will serve that region as well as northern Germany. Gruma already operates in Latin America, the US, Europe, and Australia. Last August it opened a plant in China and plans to expand its operations in Asia as well as looking at moving into Africa.
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Bolivia To Announce Mutún Winner End-May
Bolivia is to announce the winner of the rights to exploit the $1 billion El Mutún iron ore project in the southeast of the country on May 30. There are currently three bidders involved, according to the mining ministry: Anglo-Dutch Mittal Steel, India’s Jindal Steel and Power and Argentina’s Siderar.
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Ecuador To Auction Ex-Oxy Assets
Following the seizure of Occidental Petroleum’s (Oxy) assets in Ecuador last week, the government has said it is considering auctioning off the rights to exploit the oil fields previously run by the US oil company. A government spokesman said Ecuador was keen for state-run oil companies in the region such as Chile’s Enap to bid for the rights. The oil fields in Block 15, which were seized from Oxy by the government, are currently under the control of state-owned oil company Petroecuador. However, the government says that the company does not have the technology or the resources to run the oil production in the fields.
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Mexico Investment Down 20%
Mexico attracted 20% less foreign direct investment (FDI) in the first quarter of this year compared with the same period last year, according to government figures. The ministry of economy announced that FDI totaled just over $3 billion between January and March, with 89% directed into manufacturing industry. Most of the funds invested came from the US (98.7%). The figures do not include foreign M&A capital in Mexico.
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Mexico Bonds Worst Performing
Mexico’s dollar-denominated bonds have been the worst performing of any emerging market so far this year, as measured by JP Morgan’s benchmark emerging-market bond index. Mexican bonds have fallen 3.5% this year; last year they returned 8.5%, including reinvested interest. Analysts say the lackluster performance is due to uncertainty surrounding Mexico’s presidential elections on July 2.
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Chocolates And Fifco Offer To Buy Pozuelo
The food and beverages arm of Colombia’s largest conglomerate, GEA – Nacional de Chocolates – and Costa Rica’s Florida Ice & Farm (Fifco) have made an offer of $205 million to buy Pozuelo, the Costa Rican cookie and juice subsidiary of Spain’s Ebro Puleva. The acquisition will give the buyers around 28% of the Costa Rican cookie market. Pozuelo distributes its products throughout Central America and its acquisition by Chocolates fits with the company’s strategy of consolidating its distribution base in the region.