Pemex is looking at entering external markets and is scheduled to open five total franchise (English) gas stations in Houston in December 2015 to test the U.S. market. Pemex brand recognition is high among the large percentage of Hispanics residing in Houston. The new stations are part of a larger strategy (Spanish) to increase Pemex’s competitiveness as it loses monopoly privileges after the energy reform in Mexico. The company is struggling with its debt burden and with persistently low crude prices (Spanish). Gasoline price controls in Mexico are set to expire in 2018.
No one could be blamed for cuing dramatic music as they read news from Brazil (English). First this week is the opening of impeachment proceedings (English) against the President. Then there is the arrest of senator Delcídio do Amaral (English), an event that adds to the complexity of a series of scandals that took place when president Dilma Rousseff was chair of Petrobras’ board. While one could argue that this escalation of events is evidence of improved rule of law (Spanish) in Brazil, Petrobras must still contend with its unprecedented debt burden in extremely unfavorable market conditions.
To that end, the company is continuing divestment efforts and is now said to be considering selling Caracara (English). In many circles, Petrobras was once considered a poster child of what could go right with a state owned enterprise. Now, the unraveling of the seemingly functional relationship between business and government in this entity makes it seem like a basket case. One could argue it is a phase in the improvement of this business model, a kind of purging and establishing of a series of cautionary tales that will improve the legacy of Petrobras. One Argentine investor is optimistic about the prospects for economic recovery in Brazil (English) that would improve Petrobras’ outlook. Only quarterly reports over time and through economic cycles will reveal the outcome for Petrobras.
In the electricity sector, Eletrobras of Brazil signed an energy import deal (English) for the month of December with Uruguay’s UTE. Eletrobras took this action due to the current scarcity of hydroelectric power in Brazil.
Bolivia’s president, Evo Morales, set an ambitious goal (English) for the country to be reached by 2025: having at least 6,000 MW of electricity generating capacity and beginning to export the excess. At present, the Empresa Nacional de Electricidad (Ende) is developing the Qollpana wind park (English) in Pocona, Cochabamba (see map), which has been operational since last year.
Image of the Week
The last peak in ELB’s mountains feature is the tallest in Bolivia. It is a volcano that reaches 6,542 meters (21,463 feet) and is located close to the country’s border with Chile. Hint: Its name reflects the snowy top pictured below.