Monthly Archives: January 2011

What do natural gas prices, loss of virginity and dividing by zero have in common

Today, Chile’s “bi-minister” of mining and energy, Laurence Golborne, sauntered into Punta Arenas, the southernmost city on the planet and the only city in the western hemisphere to have gone on a week-long general strike in as long as I can remember. He went there to try and work out a way to get the protestors to take down their roadblocks, let the trapped tourists out of Tierra del Fuego, quit trying to shut off the gas to Methanex, and get back to the pleasures of summer in the near-Antarctic.

It worked!

So now you, at no extra charge, get to study Spanish and learn all manner of cultural references, just by going to #GolborneFacts on Twitter.

Along with the usual signs of approval:
Golborne loses virginity before his parents
Golborne divides by zero
When Golborne gets in the water, he doesn’t get wet – the water gets Golborned
In a battle between Darth Vader, Wolverine and Chuck Norris, the winner is — Golborne

You also get a lot of local color:
Golborne resolves bilateral tensions by creating a sea in Bolivia*
Golborne doesn’t believe in God, God believes in Golborne**
Golborne wins in 1st round in 2014 with 300% of the votes, is also president of both chambers of congress and mayor of Santiago***

including some you’re really unlikely to understand without deep Chile insight:
“Golborne logra que @lagosweber se pronuncie sobre su beca. #GolborneFacts”
“Golbone logra que el perro LIPIGAS deje de hablar como flaite #golbornefacts…. naaa…mejor no!”
“Golborne logra q la RAE acepte Marepoto y Tusunami como palabras oficiales en reemplazo d las ridiculas maremoto y tsunami #golbornefacts”
“Ximena Ossandon mandó a hacer una estatua de Golborne para la Junji #GolborneFacts”

Go read. You need the entertainment and education. And yes, this has to do with commodities, so it’s allowed on this blerg.

* Bolivia has been sore about Chile taking its access to the Pacific for several years now.
** The dude is one of the few out-of-the-closet agnostics in public life in this largely Opus Dei country.
*** No joke.

Methanex (MEOH): Target of angry Chileans

Methanex plant in Chile

Methanex plant. Click for original story.

(Updated Jan 16) The people of southern Chile have been on general strike for almost a week over a plan to increase natural gas prices to homes and businesses. It’s becoming almost a new normal for the region. The Chilean interior ministry and military* is evacuating 2,000 tourists from the parts of Tierra del Fuego and nearby islands that have been isolated by the strike.

One bit of rhetoric that keeps popping up is the locals saying that they should get the gas, rather than giving it to a Pinochet-era chemical factory. Locals say hey, we’re living here in the cold, wet islands territory next to the Antarctic sea, serving as Chile’s strategic outpost, catching fish, serving tourists, and generally making ourselves useful. We should be first. And indeed, under the law, the city gets gas first. But the biggest single consumer in the region is a Methanex, a Vancouver-based company with stock that trades in Canada, the U.S. and Chile. It has four methanol production lines near Punta Arenas Chile that theoretically convert methane (the biggest component of natural gas) into a form of alcohol widely used in industry.

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PDVSA to miss 2011 capital expenditure plan

PDVSA President Rafael Ramirez says the company will spend $11 billion on “investment” this year, Reuters reports. But in its 2009 annual report, released in August, PDVSA said it planned to spend $31 billion on capital expenditures in 2011 (see p. 43):

As some snarky bastard said at the time, that plan was both bigger and later than the company had previously announced.

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Terrorism? Sounds like a fine reason to protect the environment

Colombia Pres. Santos says the Revolutionary Armed Forces of Colombia, or FARC, is using illegal gold mining to finance what’s left of its revolution. Whatever, I always get suspicious when authorities tie just about anything to terrorist groups, but if this gets some cops out to stop people from one of the more environmentally destructive human behaviors, great.

Alange inside trades were kosher, company says

Our tale so far:
Alange says it messed up.
Alange explains what went wrong, I see the CEO on TV.
I note that board member Horacio Santos sold all his shares a big 3 weeks before the restatement.

Alange Energy board member Horacio Santos had always planned to sell his shares before the end of 2010 for tax reasons, board secretary Peter Volk said in a phone interview.

He had been restricted from selling earlier because of transaction, Volk said.
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Alange’s luckiest board member

Did Alange Energy board member Horacio Santos really sell more than $4 million in Alange stock, zeroing out his holdings, between Dec. 21 and Dec. 23 of 2010, at prices between 51c and 57c?

That’s some impressive year-end diversification.

I hope his CEO Luis Giusti, who bought 22,000 shares at the same time, gets a cut of the winnings. The guy worked hard to maintain that share price.

Major hat tip to Otto, whose capacity with the SEDI website exceeds mine. And for the owls.

Update: Santos, according to his bio, used to have an oil company called Mompos. The California business registration for Mompos lists this as his address. Nice shack.

Alange says restatement was all just a miscommunication

Alange Energy, the Canadian oil explorer whose stock fell 36 percent today, says it misstated oil output based on a miscommunication between its Bogota and Toronto offices.

“We put in place a new reporting system to track capacity,” Peter Volk, secretary of the board of the Toronto-based company, said today in a phone interview. “There wasn’t clear communication between Bogota and Toronto about what to put in the MD&A,” he said, referring to the Management Discussion and Analysis section of quarterly financial reports. The error was discovered when the company was producing its year-end report, he said.

(There’s your Bloomberg-style lede. Now the good stuff.)


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The great thing about search engine optimization

is that it doesn’t understand sarcasm.

I do DHS analysis so they don't have to.

In related news, this is a pretty decent article about how Venezuela nukes aren’t much to worry about. Other than the really dumb line “Obviously, it would be foolish to dismiss the possibility of Venezuela becoming a nuclear power.” Actually, it would be foolish to do anything but laugh about the possibility. Oh and “American individuals and groups should support Venezuelan advocates of liberty” is pretty silly. I think American individuals and groups should start out by worrying about their own country, which isn’t exactly doing a great job on the liberty front. But anyway.

Whoo is that in the jungle? (Alange Energy Part 1)

Alange Energy drilled for oil. Alange Energy found oil. Alange Energy said it was pumping lots of oil — 3,500 bbl/day — and would triple output in the second quarter of 2011. It said it hit a gusher. Alange Energy stock rose.

Today, Alange Energy says it wasn’t pumping very much oil after all. It just had the theoretical capacity to pump oil, if only it weren’t for all this rain.

The meat of the restatement is in a little table:

Daily average production (boe/d) Actual Previously
Disclosed
Sept. 2010 average 2,622 3,330
3 months ended Sept. 30, 2010 2,561 3,179
9 months ended Sept. 30, 2010 2,378 2,579
November 29, 2010 2,609 4,300
Dec. 2010 average 2,374 N/A
3 months ended Dec. 31, 2010 2,515 N/A
Year ended Dec. 31, 2010 2,413 N/A

If that all isn’t bad enough, today’s news release doesn’t even mention that they said oil production had reached 3,500 barrels a day on Aug 30 (a statement that is still on the company website). Seems unlikely, given that they averaged only 2,622 bbl/day in September.

I’m sure none of this has anything to do with a CEO best known for being head of the Olde PDVSA and then being connected to Stanford Bank. (He has declined to comment publicly on his role at Stanford, but the body doesn’t seem to have had much if any power in the organization.) Or that his son was VP of Investor Relations at Alange as recently as November. (I’m not sure whether this is the same son who worked at Stanford Bank.) Or that the biggest company backer is Frank Giustra’s Endeavour Financial, which has been wrapped up in quite a few little scandalitos.

Actually that’s not true. This news release today just makes no sense. These guys, especially Giusti, know damn well the difference between potential production and real production. And he’s a hands-on manager who can tell you about the properties of individual wells. It is very odd to see them trying to pass this off as something that will be fixed with the appointment of a new COO. The Giustis weren’t immediately available to comment.

What, the southern lights aren’t enough for you?

Piraña nos cagaste

"Piranha" (referring to President Sebastian Piñera), "You shat on us." Click for original in slideshow.

Bolivia, Pakistan, Venezuela — energy price unrest is popping up all over the place, especially in poor regions that produce the world’s fuel. Up today: Magallanes, in southern Chile. Go figure: When energy prices soar worldwide, people in energy-producing regions feel entitled to profits and resent higher bills.