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Punta Arenas: Hot News

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ENAP closes five oil rigs in Magellan Strait; Punta Arenas maritime agents disagree with peso billing.

ENAP closes five oil rigs in Magellan Strait

Five rigs and an oil pipeline in the Magellan Strait will be decommissioned by Chile's government owned oil company ENAP, reported the Punta Arenas office. The decision, effective next July, was taken after twelve months of studying costs, production forecasts and future prospects. According to Erica Hidalgo Barahona, president of ENAP's union the number of rigs eventually will be six and the personnel will be transferred to other areas of the company. However, no word was mentioned about what would happen to the staff from private subsidiary companies working in the industry. Enap Magallanes in an official release said that as part of the normal work of the company, there are permanent technical-financial assessments of the different activities involving exploration and exploitation of deposits. "In this case data indicated the convenience of stopping operations in the Spiteful-Brp oil pipeline and five rigs associated to two deposits in the framework of optimizing production in the off shore activities Administration Unit". The decision is based on the non viability of prolonging the life span of the pipeline and its direct financial impact for the company, given the diminished production volumes compared to extraction costs and the opportunity of a more efficient performance of human resources Ms. Hidalgo warned that the union still has not discussed if it will accept Enap Magallanes decision but admitted that closing oil rigs are "relatively normal decisions that occur each time the company assesses financial and environmental variables". But "an assessment on whether to close or not a rig must take into account the workers situation, and on this issue we haven't had any replies yet".

Punta Arenas maritime agents disagree with peso billing

The maritime private sector is not enthusiastic about having Punta Arenas port rates billed in Chilean pesos instead of US dollars as was recently announced by local authorities. Carlos Rivera Heavey, Chile's Maritime Chamber projects coordinator interviewed by La Prensa Austral recalled that in the event of a "pesification", most cargo transfers and handlings are international operations, while the percentage of Chilean participation is minimal. "You receive US dollars and you can pay with pesos in Chile, but if changing billing to pesos means an increase in port rates, I think it's not positive, rather counterproductive", said Mr. Rivera Heavey When Punta Arenas port authorities launched the idea of billing in pesos the main purpose was recovering the real value of services because since 2001 the Chilean peso revaluation and the country's inflation have created a cost mismatch. "Exporters and international cargo handlers have costs and rates in US dollars; the Magallanes farmer sells his wool in US dollars, and all port and transport services are billed in US dollars. Billing in pesos will undoubtedly mean a change in the cost structure", argued Mr. Rivera Heavey. Besides, Punta Arenas port infrastructure and services are not over demanded, and there's not a "safe" market "willing to absorb the 19% increase in rates" argued the Maritime Chamber official. The 19% is the result of a 10% revaluation of the Chilean peso against the US dollar and the 9% increase of the consumer price index, between 2001 and January 2005. "Increasing rates 20% when Ushuaia is gobbling the cruise market, there's restricted access for certain fishing vessels and maritime transport has suffered severely by land and air transport competition, I believe is entirely negative for Punta Arenas port, a quick way of definitively leaving Punta Arenas knock out", added Mr. Rivera Heavey. The Maritime Chamber official finally said that the problem has been presented for consideration to Andres Rengifo, head of the Port Companies chapter belonging to the System of Public Enterprises. "The problem belongs to Magallanes and they will have to solve it because they will suffer the full impact, the exporters and users of port services, anyhow we're concerned the initiative expands", admitted Mr. Rivera Heavey.