Tag Archives: peru

Latin American currency: Colombia goes bananas

A good way to monitor Latin American currencies is against the Canadian dollar, rather than the US dollar. The USD, as world reserve currency, is mostly a measure of risk tolerance around the world. People fearing instability (still and despite it all) buy greenbacks. But the CAD, as the currency of a stable, developed, but resource-dependent country, is a nice comparison point for the Latin American currencies, as it cuts out a lot of the USD’s noise.

Against the CAD, the Colombian peso long tracked other currencies in the region, particularly the Peruvian nuevo sol and the Chilean peso. Latin American currencies 2010-2014

This first chart shows currencies against the CAD from 1 Jan 2010 to 1 Oct 2014. The Colombian peso (COP) is the red dotted line, green is Peru, navy blue is the Mexican peso, and fucsia is Chile. Up top, you see the Brazilian real and the Argentine peso doing their wacky and devaluatory deeds in red (solid line) and purple.

Here’s what the same currencies have looked like over the past calendar year:

Latin American currencies 1-year chart to 27 July 2015

This time, Argentina is down there with Peru and Chile, actually appreciating against the Canadian dollar. Mexico is drifting weaker, and Colombia is suddenly tracking Brazil in a big, painful devaluation. The are both big oil producers whose state-controlled companies were once stock market darlings. They are both economies that were overhyped circa 2011, and are now probably in an excessive backlash.

The upshot:

Latin American currencies 5-year chart to 27 July 2015Here’s the 5-year chart. Colombia has detached from its usual peers and is devaluing mightily.

The upshot for me, as a consumer of Colombian Harina P.A.N. precooked corn flour in Canada, is that a kilogram of this white powder has dropped from CAD 4 to CAD 3.3 over the past year.

Given what we already saw in 2014, I suspect Colombia will get a competitive advantage in the production of other white powders. Next year’s coca production reports will likely show Colombian output surging.

 

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China plans huge Brazil-Peru rail link

Interoceanic Highway

The new road climbing out of the Amazon into the Andes

Story here.

Chinese premier Li Keqiang is to push controversial plans for a railway through the Amazon rainforest during a visit to South America next week, despite concerns about the possible impact on the environment and on indigenous tribes.

Currently just a line on a map, the proposed 5,300km route in Brazil and Peru would reduce the transport costs for oil, iron ore, soya beans and other commodities, but cut through some of the world’s most biodiverse forest.

The six-year plan is the latest in a series of ambitious Chinese infrastructure projects in Latin America, which also include a canal through Nicaragua and a railway across Colombia. The trans-Amazonian railway has high-level backing. Last year, President Xi Jinping signed a memorandum on the project with his counterparts in Brazil and Peru. Next week, during his four-nation tour of the region starting on Sunday, Li will, according to state-run Chinese media, suggest a feasibility study.

 

The criticisms are similar to those that met the Interoceanic Highway project along the same general route a decade ago. When I traveled that road in 2011, when it was mostly paved but still missing a couple final links, I found that the most of the predictions of doom had failed to come true, while there were some clear benefits from the road construction. However, the bad news may have been bubbling away, and I haven’t been back to see if things stayed so positive once the road was fully open.

Time to go back!

Aguirre, the Wrath of Petrobras

aguirre_1You can watch the film or you can read the legal brief, in which a modern-day Aguirre sues the king for sending him down a deathtrap Peruvian river. From US District Court for the Southern District of Texas comes the epic drama, “4:14-cv-02155,” starring one J Wilkerson and Petrobras America.

4.1 In February of 2013, Plaintiff was working as a mechanic at Defendant’s facility in Peru, where helicopters delivered supplies and materials in support of Defendant’s oil and gas exploration activities.

4.2 On or about February 13, 2013, when it came time for his work to end, and for Plaintiff to return to the United States, he was unable to depart via aircraft as planned, due to severe rainstorms. Consequently, Defendant provided a small aluminum boat and pilot to transport Plaintiff. The vessel was navigated through waters where there were visible trees rising out of the water, and presumably tree stumps hidden beneath the water. The vessel violently struck something in the water, which caused the vessel to flip, throwing Plaintiff into the water. Plaintiff lost consciousness, and sustained severe and disabling bodily injuries.

4.3 When he regained consciousness, Plaintiff was trapped in an air pocket under the boat. He swam out through a window, and up to the surface. He then began to float down the river. He spotted a small village and was able to make his way to the bank and up onto land. A small fishing boat, passing by, picked him up and took him to a village where he sat for hours, waiting for Defendant’s rescue boatto arrive. Defendant’s rescue boat transported Plaintiff back to Defendant’s work site from which he had departed in the aluminum boat. He was then transported by helicopter to Defendant’s main gas processing plant. From there, Plaintiff was transported by fixed wing aircraft to Lima, Peru, where he was taken by cab to a hotel. Plaintiff stayed at the hotel for roughly 6 hours, before flying by commercial airline back to the United States.

Petrobras America, the named defendant, simply says it’s never owned or operated anything in Peru, so quit bothering the poor saps. Sorry but this story doesn’t have much in the way of a cathartic conclusion. The case is ongoing in Houston.

Peru calls PetroPeru pres in over oil spill

El Comercio says the president of PetroPerú has to go answer questions before the legislature because his company spilled oil.

Article:

The president of the board of Petro-Perú, Pedro Touzett Gianello, was called to answer questions about  the oil spill in the Cuninico, district of Urarinas, in the Loreto region, according to an announcement from the Environmental, Ecological, and Andean, Amazonian and Afro-Peruvian People’s Commission in Congress.

Not exactly a month in the slammer, but better than what we see with most state enterprises, or even private companies, when they pollute. So, good for Perú.

Gosh, Peru may fine state oil company big bux for oil spill

Venezuela and Ecuador, especially, could learn from this. Peru fines Petroperú for spilling oil. Real fines, too — max fine could be over US$50 million.

The Environmental Evaluation and Investigation Organization (OEFA) says it has started an administrative sanction proceeding against Petroperú for the 30 June 2014 oil spill in Segment I of the Oleoducto Norperuano, near where it crosses the Cuninico river, in the Urarinas district, province and region of Loreto.

It says the possible infractions that took place include spilling oil, which can be fined as much as 10,000 tax units, or about 38 million soles ($13.5 million).

The state oil company also may have failed to comply with its environmental management instrument, first by failing to maintain the pipeline, which can be fined as much as 57 million soles ($20.3 million) and second by not having detected and controlled the leak promptly, which can also be fined as much as 57 million soles.

More here, in Spanish.

No wonder the government wants to strip the OEFA of its power.

Another day, another Amazon oil spill

PetroPerú tries its hand at environmental devastation. Environmental Health News writes it up in English:

On the last day of June, Roger Mangía Vega watched an oil slick and a mass of dead fish float past this tiny Kukama Indian community and into the Marañón River, a major tributary of the Amazon.

Community leaders called the emergency number for Petroperu, the state-run operator of the 845-kilometer pipeline that pumps crude oil from the Amazon over the Andes Mountains to a port on Peru’s northern coast.

By late afternoon, Mangía and a handful of his neighbors – contracted by the company and wearing only ordinary clothing – were up to their necks in oily water, searching for a leak in the pipe. Villagers, who depend on fish for subsistence and income, estimated that they had seen between two and seven tons of dead fish floating in lagoons and littering the landscape.

“It was the most horrible thing I’ve seen in my life – the amount of oil, the huge number of dead fish and my Kukama brothers working without the necessary protection,” said Ander Ordóñez Mozombite, an environmental monitor for an indigenous community group called Acodecospat who visited the site a few days later.

Read it all here.

And on July 2, PetroEcuador had a freakishly similar situation. Amazon Watch offers the details: Continue reading

Anyone in favour of Peru giving away the store to Doe Run?

Otto gives some calm, measured advice to the government of Peru — primarily to “Grow some balls one time, will you? Doe Run Peru has failed to meet its contractual obligations… Screw ’em. Fuck ’em. …take over the plant, Ollanta.”

Then I get this press release from San Francisco, which says more or less the same thing, but in Spanish press release-ese. I’m not usually one to just run a press release here, but what the heck, maybe this will help the PR get seen:

El Congreso del Perú no debe otorgar extensión sin condiciones a Doe Run en La Oroya

Empresa usa tácticas legales y políticas cuestionables para presionar al gobierno

San Francisco, EEUU – Mientras que el Congreso peruano se encuentra considerando una norma para otorgar a la empresa Doe Run Perú (DRP) una extensión del plazo para el cumplimiento de las obligaciones del Plan de Adecuación y Manejo Ambiental (PAMA) por tercera vez, DRP usa tácticas legales cuestionables para presionar al Perú. El gobierno peruano no debe permitir la reapertura del complejo metalúrgico de La Oroya sin que la empresa cumpla de antemano sus obligaciones ambientales, se pronunciaron el martes las organizaciones internacionales Earthjustice y la Asociación Interamericana para la Defensa del Ambiente.

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