MANAGUA—Puma Energy, the international petroleum company that purchased ExxonMobil’s assets in Central America earlier this year, is purring about Nicaragua’s “promising future.”
“This is a country with enormous potential for growth, and we want to be a part of that growth,” said Daniel Mencía, general manager of Puma Energy Nicaragua.
On Wednesday night, Mencía officially announced Puma’s arrival in Nicaragua, three months after the company started operating here. The oilman said the $1.2 million process of converting 37 former Esso service stations to Puma stations is advancing ahead of schedule and should be completed “within the next few months.” The company also controls the operation of Esso’s former oil refinery in Managua.
For now, Mencía says, Puma is using the Nicaragua refinery to supply the local market. But he doesn’t rule out the possibility that Puma will one day expand its refinery operations and start exporting oil from Nicaragua to the rest of the region.
“The refinery has a capacity for production of approximately of 19,500 barrels a day,” Mencía told The Nicaragua Dispatch. “There is possibility for export, but really it’s enough to cover the Nicaraguan market at this time. Still, if there is an opportunity, if it’s necessary, we will export.”
The possibility of future oil exports is only part of Puma’s plans to continue expanding its operations in Nicaragua and Central America, Mencía says.
“The best is yet to come—our plans for Nicaragua are big and clear and robust,” he said, without elaborating.
Puma Energy was founded in northern Central America in 1997, and now operates in 29 emerging markets in Latin America, Africa, Asia, the Middle East, and the Balkans. Globally, the company has 1,200 gas stations and 3.8 million cubic meters of oil storage facilities, servicing both large industrial clients and individual consumers. The company’s international headquarters are in Switzerland.
As of March 1, when Puma finalized its acquisition of ExxonMobil’s Central American assets (for an amount the company won’t disclose), Puma Energy became one of the largest petroleum companies in the region. The company now operates in Belize, El Salvador, Guatemala, Honduras, Nicaragua and Panama.
In Nicaragua, Puma controls 40% of the market, according to Mencía. With the exception of a few privately owned gasolineras, all other filling stations in Nicaragua are owned by the state-owned oil company Petronic, or Honduran-owned Unopetrol, the company that last year bought Texaco’s holdings and converted them into UNO stations.
Refining ALBA oil
Puma Energy Nicaragua purchases its oil from Alba de Nicaragua, S.A. (ALBANISA), a privately owned Nicaraguan-Venezuelan oil company linked to members of President Daniel Ortega’s family.
“The petroleum that comes into the county is bought through ALBA, through ALBANISA,” Mencía told reporters Wednesday night. “Naturally, one of the great producers of petroleum that exists in the region is Venezuela and historically a great part of the petroleum supplied to Central America has come from there.”
Mencía stressed that Puma’s purchase of ALBA oil is a logistical issue, rather than one of fist-pumping political solidarity.
“Really it’s a logistical issue; it’s an issue of where the production is, and that’s where we are bringing product from,” he said.
Mencía insists that Puma’s business operation here has been transparent and seamless. He stressed that Puma’s involvement with ALBA is a business decision, and not due to contractual obligation imposed by the Sandinista government.
“There’s no obligation,” the Puma GM said. He said his company is free to buy petroleum from whoever gives “the best offer.”
Private sector applauds Puma’s investment
José Adán Aguerrí, president of COSEP, the country’s largest business chamber, says the private sector welcomes Puma’s vote of confidence in Nicaragua and Central America.
Aguerrí noted that Puma’s foray into Nicaragua is part of an important trend of growing foreign investment under the Sandinista government. In 2007, the year President Ortega returned to power, foreign-direct investment in Nicaragua represented 6.7% of the Gross Domestic Product (GDP), ranking Nicaragua fourth in Central America in its investment-to-production ratio. Four years later, Nicaragua’s foreign-direct investment is equivalent to 13.3% of its GDP, ranking Nicaragua No. 1 in the region, Aguerrí says.
“We think that Puma’s bet on Nicaragua and Central America was worth it,” Aguerrí.