This week’s likely top stories: Colombia’s peace talks suspended over kidnapping; U.S. will grant refugee status to select minors from Central America; Brazilian police arrest 27 in Petrobras corruption scandal; Cruise ship tourism is booming in Cuba; Pemex invests millions in hydrocarbon production and exploration.
Kidnapping Halts Colombian Peace Talks: Colombian President Juan Manuel Santos has suspended peace talks with the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC) after the rebel group kidnapped a Colombian army general this weekend. General Rubén Darío Alzate Mora—who was apparently dressed as a civilian when captured—and two other people were reportedly abducted on Sunday by the FARC’s 34th front in the western department of Chocó, making General Alzate the first general ever to be kidnapped by the guerrillas. Colombian Defense Minister Juan Carlos Pinzón deployed hundreds of troops to the area on Sunday. On Santos’ orders, Colombian government peace negotiators will not travel to Havana today to participate in the second round of the two-year-old peace talks with the FARC.
Some Central American Minors to Receive Refugee Status: Vice President Joe Biden announced on Friday that the U.S. government will grant refugee status to minors from Guatemala, Honduras and El Salvador if their parent is a legal U.S. resident. The program, to be launched next month, will permit immigrant parents to request refugee status for any children under age 21 living in any one of the three Northern Triangle countries. Upon arrival, the children will be eligible to work and will eventually be eligible for permanent residency and citizenship. Currently, a maximum of 4,000 Latin American immigrants per year from Colombia and Cuba only are eligible for refugee status in the United States. Biden’s announcement comes amid growing concerns about the surge of unaccompanied Central American migrant youth who entered the U.S. illegally this year. The Obama administration is expected to announce further reforms to the immigration system in the coming weeks.
Brazilian Police Arrest 27 in Petrobras Corruption Scandal: In response to mounting political pressure to resolve the Petrobras corruption scandal, Brazilian police made 27 arrests on Friday in connection with the investigation by order of federal prosecutors at the Ministério Público Federal (Federal Public MInistry). Those arrested included Renato Duque, the former director of engineering and services at the state-owned oil company, as well as nine executives from construction firms who signed fraudulent contracts with Petrobras. Authorities also froze $277 million in assets belonging to 36 suspects and three unnamed companies. Former Petrobras director Paulo Roberto Costa, arrested in March, first disclosed the details of the company’s alleged decade-long, $3.8 billion dollar kickback scheme to buy influence among the members of the ruling Partido dos Trabalhadores (Workers’ Party—PT). Responding to the arrests, President Dilma Rousseff, who chaired the board of Petrobras from 2003-2010 while serving as energy minister, commented that “This will change forever the relationship between Brazilian society, the Brazilian state and private companies.” Following Petrobras’ statement that it would delay the release of its third quarter earnings, the company’s stock fell five percent on the IBOVESPA exchange.
Hike in Cruise Ship Tourism Projected in Cuba: The state-run Cuban tourism agency, Cubatur, announced late last week that it is expecting the arrival of more the 200 cruise ships at ports throughout the island during the upcoming winter season, which ranges from late November to April. Tourism is the nation’s second largest source of income (after technical and medical expertise), and it brought 2.85 million visitors to the island in 2013. The resurgence of cruise ship tourism reflects the Cuban government’s attempt to diversify its tourist offerings. The cruise ship industry had been all but abandoned in Cuba since the Spanish firm Pullmantur was acquired by the U.S.-owned Royal Caribbean cruises in 2006 and subsequently shut down all operations to the island. The Cuban government has rejuvenated the cruise ship tourism sector by establishing joint operations with international companies. This was made possible by the Foreign Investment Law, inaugurated in 2014, which aims to attract foreign investment through concessions such as new tax breaks, more flexible labor policies, and a reinforcement of the offer of allowing 100 percent ownership.
Pemex to Invest Millions in Upstream Oil Industry: Petróleos Mexicanos (Pemex) announced to investors today that it is planning to invest up to $161.7 million between 2015 and 2019—or 78 percent of its available capital—to its upstream search for potential underground and underwater sources of hydrocarbons. Pemex’s investment may cover shale gas extraction from the Agua Nueva deposit in the Tampico-Misantla Basin and deep-water drilling across the Perdido Fold Belt in the Western Gulf of Mexico. By comparison, only $34.4 million will be rerouted back into downstream activities—such as refining, marketing and distribution—to increase the efficiency of oil refineries like the complexes in Tula, Salmanca, and Salina Cruz. Since peaking in 2004, Pemex’s crude oil production has fallen by nearly one million barrels a day. Moreover, this past October, the state-owned oil company posted its eighth consecutive quarterly loss. Against this grim background, the redistribution of capital resources into upstream projects represents Pemex’s long term objective of achieving national energy security by diversifying the national energy portfolio.
