Page 12 - LatAmOil Week 18 2020.pdf

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Even as demand dives in response to the coro- navirus (COVID-19) outbreak and prices hit historic lows, Patel explained, Brazil is fortunate because it has more storage capacity than other Latin American states prior to the emergence of the pandemic.
For its part, the National Agency of Petro- leum, Natural Gas and Biofuels (ANP) told Bloomberg that the country’s ability to store crude “remains robust.” Brazil’s storage facili- ties have a combined capacity of 159mn barrels, with more than half of the total located at rela- tively new offshore fields, it said.
At the same time, ANP said, Petrobras’ refineries are increasing their production of in-demand marine fuel. This has helped to curb inventories, it noted.
Petrobras said late last month that it was con- fident that sales to China, the biggest market for Brazilian crude, would rise as the Asian coun- try recovers from the pandemic and brings its factories back online. “The Chinese economy is showing signs of a recovery,” noted Roberto Castello Branco, the company’s CEO.
“There’s capacity to absorb a good volume of exports,” he commented. He also said, though, that he was more worried about selling at a profit than finding a home for the oil. Global storage capacity is nonetheless nearing its limit, he added.
Meanwhile, Wood Mackenzie has also con- cluded that Petrobras entered the oil crisis in a relatively strong position. “The main difference
ECUADOR
is Brazil is still in expansion mode, despite the cuts, and it’s going to be a longer-term gain,” Ixchel Castro, the consultancy’s manager of Latin America oil and refining markets, told Bloomberg.
“You’ll continue to see more barrels from Brazil, even if at a slower pace,” he added.
Wood Mackenzie also commented that Bra- zil compared favourably to other Latin Ameri- can exporters. Mexico, Colombia and Ecuador produce lower-quality grades that have limited markets, while Brazil produces higher-quality grades that can be sold to a wider market, it explained. ™
Brazil has relatively ample oil storage capacity (Photo: Poder 360)
Quito asks Petroamazonas investors to accept $175mn payment delay
CASH-STRAPPED Ecuador has convinced a super-majority of the holders of three-year bonds issued by Petroamazonas, a state-con- trolled oil company, to accept a delay in payment.
The South American country’s Finance Ministry said in a statement last week that it had asked bondholders to consider a proposal for postponing a $175mn principal payment, as well as interest payments. It gave investors until May 4 to respond, in the hope that it could restructure its debt by that date and secure approval from at least 75% of bondholders.
As of press time, Petroamazonas was still discussing its debt restructuring options. Nev- ertheless, it did reach agreement with nearly all bondholders on pushing the date of matu- rity back by nearly a year. The Finance Minis- try said in a statement on May 4 that investors holding 98.9% of the bonds had approved the
postponement.
As a result, the ministry’s statement said, the
company will delay the $175mn principal pay-
ment until December 2021. This sum will be
paid out in 12 monthly instalments, beginning
in January 2021, it said. 
Petroamazonas is run by the state (Photo: Acero Ande)
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Week 18 07•May•2020