Energy Latam Blog | 2016 Jan | W1

Weekly Highlights

(plus a bonus)

Feliz Año Nuevo | Happy New Year | Feliz Ano 2016!!


Earlier this week, newly elected opposition lawmakers were sworn in (English) to the Venezuelan Congress. The opposition won a super majority in Congress that is being challenged by the ruling Socialist party (PSUV). The country’s state-owned oil company, Petróleos de Venezuela (PDVSA), also recently celebrated its forty-year anniversary (Spanish). The company was formed in a similar way as Mexico’s Pemex though in a different time period. PDVSA’s leadership has requested OPEC meetings very early in 2016 to discuss strategies to raise oil prices. The government depends on oil revenues to finance what it calls “21st Century Socialism.” Venezuela’s current president, Nicolás Maduro, has contested the election results of several opposition leaders. Though he instructed the military to keep demonstrators for opposing political sides from clashing at recent ceremonies, he has expressed heavy skepticism about the validity of results and has promised to continue contesting.

The opposition leader, Henry Ramos Allup, has been characterized as “belligerent” (Spanish) and has publicized a plan to oust Maduro. There are many concerns regarding Venezuela’s political economic future (English) as well as how outcomes will affect management of PDSVA.


Mexico closed 2015 with a mix of positive and negative news and with what seems like trust in the momentum (Spanish) surrounding the opening of its energy markets. Its final oil auction in 2015 was popular and generally seen as successful. Despite record low Brent prices and very moderate expectations (Spanish) for 2016 growth in the Mexican economy, the country and investors are eager for the deepwater auction. The auction of what are considered Mexico’s “jewels” (Spanish) is very important and will provide indicators for the long-term success of new investment in the Mexican energy industry.

Pemex recently announced a reduction of nearly 15 percent (Spanish) to its exploration and production budget as it continues streamlining operations in preparation for greater competition.

In news related to the opening of its electricity market, Mexico’s Electricity Commission (CFE) has outlined a sophisticated plan (Spanish) for the electricity liberalization, changes that will decrease prices (Spanish) for Mexican consumers by 2 percent.


Petrobras’ governance woes continue to mirror those of embattled Brazilian president, Dilma Rousseff. The CEO of Petrobras, Aldemir Bendine, is also facing greater scrutiny (English) as he rounds out his first year at the helm. With expectations of economic contraction and inflation at a thirteen-year high (English), it is difficult to overstate the gloom hovering over Brazil’s political economic outlook for 2016 (English) and how that reality will affect Petrobras. The coming year will prove to be a test for a country that has disappointed expectations of its BRIC status just as its national soccer team dashed hopes for the recent World Cup. Observers will be watching it closely for signs of a comeback, the kind of comeback story often seen at the Olympics (English) that Brazil will be hosting this year.

In renewables, part of the Campos Neutrais Wind Complex, the largest of its kind in Latin America (English), was authorized for commercial operation in Rio Grande do Sul state.

Video of the Week: Catarata (Waterfall) Series

This week, ELB features the world’s tallest waterfall complete with narrator and epic music. Just heavenly 🙂



I’m including a little something extra to ring in the new year. It’s not a lovely sight but a feast for the ears: a piece by a Mexican composer, Arturo Márquez, conducted by the renowned Venezuelan conductor with fabulous hair, Gustavo Dudamel. Caution: You may find yourself sweeping your cubicle mate into a passionate dance. Please listen responsibly 🙂

Happy Friday!

Claudia V. Espinosa

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