News and AnalysIs for

The dispute between the USO and Oxy is grinding away. On the one hand, the USO continues to complain that management is not listening and on the other, holding out the olive branch to continue to extend the dialogues. Last week between a holiday on Monday and then the traditional Colombian Easter holiday from Wednesday noon, the negotiating teams no doubt did not accomplish very much.

This was Holy Week in Colombia, Easter in the Christian calendar, and by luck it corresponded this year with a holiday on Monday, March 25. This meant most of Colombia was on vacation virtually the whole week and the Armed Forces turned their focus to ensuring there were no embarrassing incidents affecting tourists. Lining the roads with soldiers when city dwellers are on the highways is also good publicity. Incidents were down this week to 34, below the long term average.

Orlando Cabrales attended a conference in Argentina on unconventional hydrocarbons a few weeks ago just as he was transitioning from being head of the National Hydrocarbons Agency (ANH) to being Vice-minister of Energy.

Our Monthly Report for March 2013 is now available for download (see below). We have a guest commentary on gas pricing by Felipe Villegas Gómez, León Teicher gives his opinion on best practices for managing community relations and monthly collaborator Tomás de la Calle writes on the economics of exporting oil from Colombia.

The oil & gas and mining companies currently present in Colombia complain, rightfully so, about the lack of coordination between the various ministries and institutions of the state, which inevitably generate delays and uncertainty for their business.

As reported by Dinero, the Sustainable Integrated Management Report 2012 presented by Ecopetrol during its shareholders meeting was qualified, for the second year running, with an A+ (the highest rating) by Global Reporting Initiative (GRI), a sustainability reporting rating company.

Naturgas, the association of producers, transporters and distributors held its annual meeting in Cartagena last week. Colombian President, Juan Manuel Santos, attended a ribbon cutting ceremony to launch gas services in a historic small town near the city and then addressed the association’s membership, giving a pep talk for domestic gas. From a Naturgas press release, translated and with commentary by Hydrocarbons Colombia.

Rafael Ramírez, president of Petroleos de Venezuela (PDVSA) said the company made net profit of US$4.2B last year, down from the US$4.5B reached in 2011. PDVSA’s total revenues in 2012 were US$124.5B while in 2011 they totaled US$124.7B. Business magazine America Economia reports Ramirez saying: “We have a difference that I think is not very important, US$200M (…) in a similar environment.”

As reported by the Colombian news media, during the General Assembly, Javier Gutiérrez, President of Ecopetrol, said that because of the 109 attacks against the oil infrastructure of the company, last year nearly 9,559bd were lost, of which 6,000bd correspond to Ecopetrol. For this reason, since last year the company added new monitoring technology, strengthened the inspection and maintenance procedures for pipelines and transportation systems. He added: “We are investing to anticipate such attacks and maintain transport infrastructure integrity, for which we are spending US$359M.” Gutierrez said that Ecopetrol invested US$5.3M to strengthen contingency plans, drills and inform about 1,350 communities.

Last week was the natural gas industry association’s annual conference and he minister’s speech is a much anticipated event. MinMinas Renjifo did not disappoint the crowd with the breadth of his speech but we understand the content has the industry concerned over certain points. From a MinMinas press release, translated and with commentary by Hydrocarbons Colombia.