Oil & Gas - Brazil, Caribbean - Petrobras: Talks to acquire Aruba, Pasadena refineries on hold

Brazil's federal energy company Petrobras (NYSE: PBR) has suspended talks to acquire Texas-based Valero Energy's (NYSE: VLO) Aruba refinery and an increased stake in Pasadena Refining.

"We are not evaluating the Aruba refinery for the moment," Petrobras downstream director Paulo Roberto Costa told journalists on the sidelines of the Rio Oil and Gas conference.

Petrobras previously said it was interested in the refinery, which Valero aims to offload this year.

The refinery has throughput capacity of 275,000b/d. The unit processes lower-cost heavy sour crude oil and can market products in the US Gulf Coast, Florida, the New York harbor and the Caribbean.

And the proposed acquisition of Transcor Astra Group's 50% stake in Pasadena Refining (PRSI), the US company operating the Pasadena refinery in Texas, is on hold, according to Costa.

Petrobras was due to make investments in the refinery but allegedly failed to do so, creating a legal conflict.

"We understand Petrobras is suing Astra and not the other way around. We felt very uncomfortable with the situation and decided to sue Astra in the US," Costa said.

Astra, Belgium group NPM/CNP's oil trading and refining subsidiary, has said it would sell its stake to Petrobras.

"Transcor Astra Group has... exercised its right to put these assets to Petrobras," NPM/CNP said in a statement earlier this year. "The sale price is subject to valuation by independent appraisers."

Pasadena has 100,000b/d of installed capacity.

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Telecommunications - Ecuador - Report: New state telco to start operations next week

Ecuadorian fixed telephony operators Andinatel and Pacifictel will merge into a new state telco called Nacional de Telecomunicaciones (CNT), which will start operations next week, local press reported.

Pacifictel president Walter Guerra said that the main objective of the new telco was to offer better services through a single operator, with the goal of expanding fixed line telephony coverage and broadband services.

The new state telco will invest US$1bn over the next three years, Guerra was reported as saying.

The head of the country's telecoms council Conatel, Jaime Guerrero, told BNamericas that the creation of a new national state telecoms operator will result in benefits for end-users since rates will be cut.

The operators will not have to pay each other interconnections rates and as such the cost of fixed telephony will be lower, he said.

Guerrero added that if the new company pursues an agressive investment program, fixed telephony penetration in the country could expand.

According to the country's telecoms supervisory body Supertel, there were 1.84mn fixed line subscribers at the end of July. Andinatel had 983,780 subscribers, followed by Pacifictel, with 707,790 subscribers.

Privatization - Brazil - CRR plans to invest US$2bn in tollroads by end-2009

Privatization - Brazil - CRR plans to invest US$2bn in tollroads by end-2009

Brazilian tollroad operator CCR (Bovespa:CCRO3) plans to invest 1.4mn euros (US$2bn) in construction and maintenance of roads up to end-2009, paper Diário Econômico reported.

The investment figure does not include any new highway concessions or acquisitions, the report said.

As well as construction and maintenance, the firm will pay 790mn euros to the state of São Paulo for the Rodoanel highway concession.

About US$462mn is expected to be invested this year. São Paulo's AutoBAn (Bandeirantes) will absorb the largest amount with about US$111mn. ViaOeste will follow next with investments of US$57.2mn while the recently acquired Renovias will receive around US$54mn.

For 2009, the firm is planning an investment of about US$371mn. AutoBAn will once again receive the highest investment with about US$83.2mn followed by Renovias with around US$44.4mn, according to the report.

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Insurance - Brazil - Unibanco AIG comes out to defend financial health

Brazilian insurer Unibanco AIG, the joint venture between embattled US insurer AIG (NYSE: AIG) and local bank Unibanco (NYSE: UBB), has come out to defend its financial stability.

"The participation of AIG in Unibanco AIG is only of partnership nature. By being an independent business, [Unibanco AIG] does not suffer interference from AIG's results," a statement from Unibanco said.

"Unibanco AIG works under the supervision of Brazil's regulator bodies and its technical reserves, in the same way as its insurance and pensions, are invested in securities negotiated on the national market."

Unibanco is considering increasing its stake in the business and possibly buying out AIG, daily Folha de São Paulo reported.

"It might be a strategic acquisition on the part of Unibanco, and it might be a strategic sale for AIG, but it wouldn't be because of pressure on the company here in Brazil," Milena Zaniboni, head of corporate and government ratings for S&P Brasil, told BNamericas.

"I don't expect Unibanco to be affected by what's going with AIG," she added, mentioning that S&P tends to be cautious in factoring in parent company support to insurance companies, especially joint ventures.

AIG had its ratings downgraded by credit agencies on Monday (September 15), spurred by losses incurred in debt securities and derivatives. Its stock on NYSE has fallen from a 12-month high of US$70.13 in October last year to US$1.85 at the start of trading on Tuesday.

Unibanco AIG, excluding its life and pension business, is Brazil's fourth biggest insurer, in terms of written premiums in the first seven months of the year, with 1.90bn reais and 5.74% of the market, according to the latest figures from insurance regulator Susep.

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Metals - Venezuela - Government to loan US$23mn for Rialca reactivation

Venezuela's President Hugo Chávez announced he will loan 50mn bolívares (US$23mn) to reactivate operations at state aluminum wheel company Rialca, according to a government statement.

"The plant is paralyzed but the machinery is in operating condition and now that the president has contributed the resources, we can launch the plant within 15-20 days," the company's union vigilance officer Carlos Blanco told BNamericas.

In the meantime, Rialca's new board is expected to purchase input materials, contact providers and oversee all of the general logistics involved in normal operations.

"The idea is to start by transforming aluminum in the furnaces which will allow us to process 3,000t/m," Blanco said, adding that state aluminum reducer Alcasa will provide the aluminum.

Initially the plant will produce 10,000 wheels each week, all for the local market.

"But the plant has capacity to produce 30,000 wheels a week, which means 1.5mn each year," Blanco said.

In the statement, Chávez said that Rialca's production as a state company must supply the downstream needs of the government itself.

"These resources are a loan. It isn't a gift. This is a loan that the republic is going to give the company and you must be held responsible for every last cent," Chávez said.

The Rialca plant, with two 25t furnaces and aluminum processing capacity for 16,000t/y, is located in Carabobo state.

The Venezuelan government expropriated the Rualca plant from US aluminum producer Alcoa in June and changed its name to Rialca after the previous management decided to halt operations due to alleged losses and inadequate technology.

Alcoa International controlled 41% of Rualca, while state heavy industry holding CVG had 23%, Grupo Rimcar owned 23% and General Motors 13%.

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Oil & Gas - Regional - Central America natural gas alternative pegged at US$1.55bn

A study to draw up a strategy to introduce natural gas to Central America has identified a project that would cost an estimated US$1.55bn, an official from the project's workgroup told BNamericas.

Mexico's energy ministry (Sener) is the workgroup's overall coordinator and IDB the technical secretary. Other members include government officials from Mexico, Central America and Colombia.

"Of the different alternatives analyzed by the consulting group, one stands out whose technical and economic feasibility seems to satisfy the different countries of the region," according to the official.

The project entails supplying gas via storage and regasification terminals and pipelines. The Central American Electrification Council (CEAC) has recommended the region look at gas-fired power generation to help reduce countries' oil bills.

One terminal would be built near La Unión port in El Salvador and supply gas through a 910km, 24 and 20-inch pipeline to San Salvador, Guatemala City, Tegucigalpa, San Pedro Sula and Managua, the official said.

Limón port in Costa Rica would be home to the other terminal, which would supply gas through a 698km, 20 and 18-inch pipeline to capital San José and Panamá City.

A workgroup meeting is pending where each country will define its position on the study's results and decide the project's next steps, the official added.

If the project advances, an international framework treaty would have to be signed, a developer selected and a decision made whether the project would be carried out under a public-private partnership, among other tasks, according to the official.

The initiative falls under the Mesoamerican energy integration program (PIEM).

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Water & Waste - Regional - Official: Only 3 Latin American countries will meet the Millennium Goals

Water & Waste - Regional - Official: Only 3 Latin American countries will meet the Millennium Goals

Chile's UN Development Program resident coordinator Enrique Ganuza said only three Latin American countries will reach the UN Millennium Goals, an official from the country's foreign relations ministry (Minrel) told BNamericas.

Ganuza met with Chile's foreign relations minister Alejandro Foxley to discuss the goals, and expressed his satisfaction with the country's advances over the last years, adding that Chile is on target to meet the goals, the official said.

According to Ganuza, Mexico and Cuba are the two other Latin American countries that will meet the development plan established by the organization in 2000, the official added.

Poverty has become a factor of great concern among regional authorities, as it continues to increase in countries such as Bolivia, Honduras, Nicaragua and Paraguay.

In spite of not being able to meet the goals, Brazil and Colombia have shown great progress in their efforts to reduce poverty, increase education and improve connectivity.

Latin American authorities are currently working together with multilateral financial entities to support the countries with the least chance of meeting the goals, the official said.

Some of the initiatives governments are boosting include infrastructure, basic services, health and education development, which all contribute to the long-term reduction and eventual eradication of poverty.

According to the UN, countries should increase public spending and implement efficient and effective programs to reduce poverty and inequality, which has become a major concern worldwide.

During the discussion, the promotion of private investment was also addressed, as development efforts should never be faced by the public sector alone, the official said, adding that Chile has played a major role in setting an example of the positive impact of implementing a strong public-private partnership framework.

A total of 190mn inhabitants live in poverty in Latin America, which represents about a third of the region's population.

According to UN projections, some 26mn Latin Americans will live on less than US$1 a day in 2015, when authorities are expected to meet the Millennium Goals.

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