News and AnalysIs for

It was telling that MinMinas reported that President Juan Manuel Santos announced a plan to boost the Putumayo department development. The department is one of the poorest and yet is the focus of much oil exploration and production. The projects initiated or ongoing have to do with issues of energy, roads, health, education, land titling and victims’ restitution. According to Santos, the government will set a special price for gasoline in this border department and there will be permanent electricity in Puerto Asis.

National business magazine Dinero has finally recognized the challenges facing the industry. The article points out that while the oil industry is one of the strongest in the country, there has been no major oil discovery recently, terrorist attacks on pipelines continue, there are delays with the environmental licensing (as we recently reported) and strikes and shut-ins in the oil fields.

National weekly news magazine Semana published a report about the country’s regions where the most organized violent incidents are happening. According to the report, the division splintering of large criminal organizations has led to the emergence of criminal gangs seeking to appropriate the local illicit business.

National business newspaper Portafolio reports that the study “System of cities” of the World Bank and Colombia’s National Planning Department revealed the underdevelopment of the country’s road system. According to the study, apart from the usual traffic jams in cities, there is a notable lack of connectivity between them. In addition, the study states that “if Colombia had the quality of infrastructure of Costa Rica, economic growth could be up to 3 percent higher.”

This week the USO reported on its national assembly and its plans to create an occupational health department. More important is a news item on hearings in Villavicencio on the social and environmental impacts of the mining and hydrocarbons sectors in the department of Meta. A left-wing senator, Alexander López Maya told the hearing that working conditions in Puerto Gaitan were typical of a concentration camp. That’s strange considering that Pacific Rubiales told a conference on sustainable communities and petroleum last Friday that it had no community or labor relations issues in Puerto Gaitan. Although the truth is no doubt somewhere between zero and the Gulag archipelago, we are inclined to think it very much closer to the company’s point of view than one reported by the USO.

National business magazine Dinero has finally recognized the challenges facing the industry. The article points out that while the oil industry is one of the strongest in the country, there has been no major oil discovery recently, terrorist attacks on pipelines continue, there are delays with the environmental licensing (as we recently reported) and strikes and shut-ins in the oil fields.

The National Hydrocarbons Agency (ANH) announced that oil production in November was 970,632 bpd, although the figure had been reported even before the end of the month (which should raise questions about how it is calculated).

The NGO Transparency International released its Corruption Perceptions Index 2012. The index scores countries on a scale from 0 to 100 where a 0 score indicates that a country is very corrupt and a 100 score indicates that it is very clean. None of the 176 countries included in the index got a perfect score.The graph here shows the ranking of all the countries in the study with lower ranked being better.

With so much doom and gloom around the Colombian hydrocarbons industry it’s nice to celebrate some good news. The graph shows MinMinas reported gross production (before royalties and working interest) the Las Maracas field and Petroamerica’s recently reported November figure. Production is up over 500% since July.

In our Inner Circle Exclusive Monthly Report for November we published MinDefensa figures that showed hydrocarbons infrastructure attacks were down to 196 in 2011 from 917 in 2002. The graph shows the importance of picking your measurement dates to make your point. The Defense Minister implied (but did not say) that there had been a steady decline from 2002 to 2011. We obtained this data for attacks on Ecopetrol and they clearly show a rather dramatic increase since 2010 – the start of the Santos presidency – from about 30 during the later years of Uribe’s second term to 150 as of the end of October 2012.