Energy

Guatemala is a net energy importer. Oil is the primary import and in 1998 Guatemala imported an estimated 24,000 barrels per day.

Guatemala is the only oil-producing country in Central America. Its reserves have attracted interest because of their proximity and similarity to the productive Tabasco formations in Mexico. Guatemala's oil reserves are concentrated in the remote northern Peten jungle region. During the country's 36-year civil war, rebels had been active in this area, creating problems for oil companies. Since the end of the war, the government has been opening areas for bidding and granting concessions for oil exploration. Guatemala's second licensing round in 1998 resulted in only three bids, primarily due to the low oil prices at the time. There was no round in 1999, as prices remained low in the beginning of the year and there was a presidential election in the latter part of the year. The country plans to hold its third licensing round in 2000, perhaps beginning in June or July. Ten blocks are expected to be offered, six of which are in the Peten Basin. The blocks are expected to yield more oil than natural gas.

Guatemala's largest oil producer is Union Pacific Resources, a U.S.-based independent company. In 1998, the company acquired the Xan field, Guatemala's largest producing field, through its acquisition of Norcen Energy Resources of Canada. Much of the country's production is shipped to the United States.

Guatemala has small proven natural gas reserves, although the country has not been fully explored and some suspect that significant reserves could exist. In December 1999, Guatemala and Mexico signed a protocol for the construction of a natural gas pipeline from southern Mexico to Guatemala. Mexico has plentiful natural gas reserves and has a considerable amount of gas available to export. The pipeline will cost an estimated $350 million. Trans Canada, Gaz de France, and ICA of Mexico reportedly have expressed interest in participating in the project. The pipeline could eventually extend to other Central American countries, which are highly reliant on hydroelectric power, providing a power alternative that is not vulnerable to droughts. An extension of the pipeline beyond Guatemala could also aid in the creation of a common Central American electricity grid.

In October 1996, the Congress of Guatemala voted to reform the electric power market, allowing the private sector to participate in a number of projects. The reforms gave private companies unrestricted access to the power grid, distributors, and wholesale customers, and provided for a general unbundling of generation, transmission, and distribution. Privatization of state-owned electric companies has begun with the selling off of the state distribution company, Empresa Electrica de Guatemala (EEGSA), and the primary generating company, Instituto Nacional de Electrificacion (INDE). On July 30, 1998, 80% of EEGSA, which provides power to more than 500,000 customers in Guatemala City and two neighboring provinces, was sold for $520 million, far higher than had been expected by Guatemalan officials, to a consortium of Spain's Iberdrola Energia (49% share), U.S.-based Teco Energy (30%), and Portugal's Eletricidade de Portugal (21%). Overall, EEGSA (now called DECASA) distributes 70% of Guatemala's power, with INDE and 14 smaller municipal distribution companies (plus a few private generation facilities partially owned by U.S. companies Enron, Teco, and Constellation Energy) accounting for the remaining 30%. Immediately following the successful sale of EEGSA/DECASA, Guatemala kicked off the sale of INDE as well. In October 1997, INDE was divided into three separate companies, with INDE becoming a holding company.

Guatemala also has begun several projects with its neighbors to increase the reliability of its power supplies. A planned connection with Mexico's electricity grid will allow it to import power. In addition, Guatemala and five other Central American nations -- El Salvador, Honduras, Nicaragua, Costa Rica, and Panama -- had agreed on a project, known as SIEPAC, that would interconnect their transmission grids, allowing power to flow between the different countries. With Panama already linked to Colombia's grid, SIEPAC could eventually result in the connection of the North and South American power grids. Different laws in each of the Central American countries have made progress on SIEPAC difficult, and the immediate aim has now shifted from the creation of a common grid to the creation of a common Central American power market.

Beginning in the 1970s, Guatemala became heavily reliant on hydropower with the construction of large hydroelectric dams (especially Chixoy, which provides a large percentage of the country's power). By 1990, hydropower accounted for 92% of Guatemala's total electricity generation, with oil and diesel-fired plants accounting for the rest. INDE hopes that the private sector will build over 1,000 megawatts (MW) of new hydropower in Guatemala in the coming years. INDE plans many new projects, including: 340-MW Chulac, 130-MW Xalala, 135-MW Serchil, 69-MW Oregano, 60-MW Santa Maria II, 59-MW Camotan, and 23-MW El Palmar.

Central America's first coal-fired power plant opened in December 1999, with Guatemala's dedication of the 120-MW San Jose Power Station. Owners include Teco Power Services, Coastal Power Company, and Compania de Centroamerica. The plant began operations in early 2000, burning low-sulfur South American coal. It is located about 75 miles south of Guatemala City.

Potential geothermal sites in Guatemala include Amatitlan (which came online in early January 1999), Zunil, Zunil II, Tecuamburro, San Marcos, Moyuta, Atitlan, Palencia, and Motagua. INDE has performed pre-feasibility studies for potential plants at Zunil II (50 MW), Tecuamburro (30 MW), and San Marcos (30 MW). Development of these sites likely would require the import of electric power systems. Currently, Guatemala imports most of its electric power systems equipment from the United States, and the market has been growing rapidly due to the General Electricity Law, passed by Guatemala's Congress in November 1996, which facilitates private investment in the sector.

Guatemala
Key Sectors
Energy: Production and Consumption of Primary Energy
(Quads)

		1995	1996	1997	1998	1999
Coal	Production	0.0000	0.0000	0.0000	0.0000	0.0000
	Consumption	0.0000	0.0000	0.0000	0.0000	0.0000
	Net Exports	0.0000	0.0000	0.0000	0.0000	0.0000
Hydro	Production	0.0200	0.0240	0.0220	0.0210	0.0240
	Consumption	0.0200	0.0240	0.0220	0.0210	0.0240
	Net Exports	0.0000	0.0000	0.0000	0.0000	0.0000
Natural Gas	Production	0.0000	0.0000	0.0000	0.0000	0.0000
	Consumption	0.0000	0.0000	0.0000	0.0000	0.0000
	Net Exports	0.0000	0.0000	0.0000	0.0000	0.0000
Nuclear	Production	0.0000	0.0000	0.0000	0.0000	0.0000
	Consumption	0.0000	0.0000	0.0000	0.0000	0.0000
	Net Exports	0.0000	0.0000	0.0000	0.0000	0.0000
Petroleum	Production	0.0210	0.0280	0.0340	0.0520	0.0510
	Consumption	0.0850	0.0890	0.0990	0.1190	0.1230
	Net Exports	-0.0640	-0.0610	-0.0650	-0.0670	-0.0720
Renewables	Production	0.0000	0.0000	0.0000	0.0000	0.0000
	Consumption	0.0000	0.0000	0.0000	0.0000	0.0000
	Net Exports	0.0000	0.0000	0.0000	0.0000	0.0000

Sources:

US Department of Energy