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.
Category: Regions
Posted inDaily Brief
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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Oxy To Sue Ecuador For $1 Billion
Occidental Petroleum (Oxy), the fourth-largest oil company in the US, is to sue Ecuador for $1 billion of damages after the government cancelled its exploration rights and took over its assets in the country last Thursday. Oxy, which filed its claim with the International Center for Investment Disputes in Washington, says the government has violated the US-Ecuador Investment Treaty. Meanwhile, Canadian oil company EnCana, which bought a 40% in Oxy’s Block 15 in 2000 and sold it on to Chinese joint venture Andes Petroleum earlier this year, may be forced to refund up to $280 million of the sale revenues following the seizure due to contractual clauses.
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Famsa Debuts On Mexican Exchange
Mexican home appliance retailer Grupo Famsa successfully floated 30% of its stock on the Mexican stock exchange on Friday, achieving a share price of 26 pesos ($2.36). The global IPO raised $230 million, which the company plans to use to pay down debt and fund expansion. The issue was coordinated by BBVA Bancomer and Credit Suisse.
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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.
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Iusacell Extends Swap Deadline
Mexican cell phone operator Iusacell has extended the deadline of its $350 million debt swap offer until June 1. The company is offering to swap 14 ¼% bonds, due 2006, for new bonds at 10%, maturing in 2013. The offer was originally due to expire on May 18. The swap is part of a larger debt restructuring program. The firm reached an agreement with creditors to restructure $750 million of debt in January, following protracted negotiations.
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Panama Charges Ex-president Alemán With Moneylaundering
A Panamanian judge has ordered the arrest of former president of Nicaragua, Arnoldo Alemán, on charges of moneylaundering. Other family members, including his wife, have also been charged. Panama claims Alemán carried out the illegal activity via the Panamanian banking system to launder almost $60 million of public funds diverted to different bank accounts. Alemán, who governed Nicaragua between 1997 and 2002, has been under house arrest just south of the capital Managua after being convicted of embezzlement in Nicaragua in 2003.
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YPFB Becomes Bolivia’s Third-Largest Oil Comany
Bolivia’s state-owned energy company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), will today, Friday, become the country’s third-largest oil company when it takes ownership of the country’s nationalized assets, giving it control over 15% of Bolivia’s gas reserves. The transfer of the shares of the country’s three listed oil concerns gives YPFB a 51% controlling holding. Brazil’s Petrobras and Spain’s Repsol YPF remain the two largest oil companies in the country.
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Colombia Hopes To Raise $451 Million From Bancafe Sale
Colombia is to sell off the country’s largest state-owned bank – Bancafe – for no less than $451.44 million (1.09 trillion pesos), according to the government. The bank will be sold off to the highest bidder in the third-quarter of the year. Foreign and domestic banks will be permitted to bid for the institution. The sale of Bancafe will leave only one state-run bank – Banco Agrario – operating in Colombia.