The annual report of this prestigious organization reveals an increasing perception that bribery is a taking place in Colombian business. The graph above shows the frequency of response for various types of bribery comparing 2012 responses to 2010. Uniformly, 2012 responses are higher than 2010 indicating the perception of corruption has worsened. More concerning, and more easily addressed is the result that, despite this increased perception, Colombian businesses seem to take few steps to mitigate such practices. From the Transparency Colombia press release, translated and with commentary by Hydrocarbons Colombia.
The National Hydrocarbons Agency (ANH) published their (outgoing) president’s slides from his presentation to Cera Week, the big oil and gas investor show in Houston last week. What he said is just as important as what the slides say but there still are messages. Orlando Cabrales could not have displayed these slides and said things that radically deviated from their implicit message. Here we focus on unconventional resources for adding to reserves. The graph shows how important unconventional resources are to the ANH’s “Abundance” scenario for new reserves up to 2030.
A few weeks ago we reported a La Republica article outlining a number of potential changes. But nobody else but Reuters picked up the story and the ANH (unusually) started issuing press releases on Orlando Cabrales’ activities. Directly after the news report he was to represent Colombia at an unconventional hydrocarbons conference in Buenos Aires and present at the global industry’s biggest event, Cera Week in Houston. Now, on the second day after he gets back, he finds himself with a new job. From a MinMinas press release translated and with commentary by Hydrocarbons Colombia.
The ‘Qifa case’ has acquired a life of its own. This lawsuit between Pacific Rubiales and Ecopetrol turns on a clause that triggers an increase in Ecopetrol’s participation once production hits a certain level. The fight is over whether the trigger is defined by total production or just Pacific Rubiales’ net production. So much has been published on such little understanding that a number of ‘myths’ have arisen that Pacific has gone public to deny.
Incidents were down again this week to 40 just a little below the long term average. Again this week a higher than recent average number of the items were initiated by the Armed Forces which is a good sign. Our 4-week Moving Average was down very slightly and it now sits at 42 incidents per week closer to what amounts to a long-term average.
According to Mercedes Rincón, member of Congress, in view of the profits that currently Ecopetrol earns, it is clear that the government was wrong when, two years ago, it tried to sell 10% of the company’s shares that owned. As reported by El Nuevo Siglo, the congresswoman believes that the government’s aborted attempt to sell another 10% would have been a bad idea and it has proven better to have held onto the shares.
While it may seem that the USO’s campaign to discredit the mining and energy industries is self-destructive, one must keep in mind that their goal is not to close the industry but to force multinationals to leave. They want to go back to the days when Ecopetrol ran everything and thus 100% of the jobs were USO jobs. Terpel workers settle for about 4% (which is only slightly over the inflation rate) and Cartagena refinery workers vote to go on strike. If the union manages to stop construction as well, that will delay the Cartagena refinery upgrades even more than they have been.
Peace talks advance with the visit of a congressional committee to Havana and demands by victims of the conflict. After a meeting with the National Unity Coalition in the Casa de Nariño, President Santos said: “I informed the National Unit Coalition how exactly this process is going, how it has been making progress, and what texts are agreed, in which, as has already been said, no previous process ever achieved a step of this nature.” Santos also commented: “The committee went (to Havana) for two very specific purposes: to show these legislative gentlemen progress and to point out the importance of recognizing the victims.” He added: “Of course it is still a long way to go and that is why the issue of time is so important.”
Interoil, operator of a number of Colombian oil blocks got approval from its shareholders to raise US$35M from existing and other investors. The equity is necessary to meet the requirements of bondholders to restructure and extend the company’s debt. The equity will be raised through a crash private placement that will close March 13, 2013. According to a company presentation, Interoil had US$97M of debt and US$10M in cash as of December 31, 2012 and it is using all of the proceeds from production in Peru and Colombia to pay for its debt. It is unable to invest in expanding production because of the debt load.
The Colombian government has a long term program to increase natural gas penetration in Colombia. The purpose is environmental – diversification from more carbon intensive fuels – and partly developmental. Last year the association of producers, transporters and distributors of natural gas Naturgas signed an agreement with the Minister of Mines and Energy to add just over 430,000 new users. The target was exceeded. From a Naturgas press release, translated and with commentary by Hydrocarbons Colombia.
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