News and AnalysIs for

Mayor General (R) Jorge Rodríguez Clavijo addressed the Colombo-Canadian Chamber of Commerce this morning, and while he was realistic about the challenges, he was upbeat about the changes in the past 10 years and about the Santos government’s efforts in the field. He stayed away from political issues like the peace talks or the impact of Venezuela and kept to the facts.

As reported by RCN Radio, road blocks were lifted around Yopal, capital of the Casanare department (which produces 18% of the country’s oil and 70% of its gas) after citizens barriaded them to protest the lack of water. According to Ivan Mustafa, Deputy Minister of Water, an agreement between the government and the people of Yopal was reached. Meanwhile, people will continue to receive water in tanker trucks.

With investors walking away from Colombian oil and gas stocks but interest rates low and companies still upbeat about their prospects, there have been a number of announcements about new debt issues and debt intentions. Other less conventional uses of cash like share buybacks have also become more prevalent.

As reported by Dinero, by February this year the stock-market capitalization of the companies listed on the Colombia Stock Exchange (BVC) increased by 6% compared to February of 2012, going from US$248B to US$263B. This even though capitalization declined compared to January this year, when it was US$273B.

It came as a tweet inviting contractors and providers to review the company’s Corporate Code on Conduct and Ethics. But Pacific makes it clear as early as page 7 that “the principles listed in this Code form part of your contractual agreement with Pacific Rubiales Energy and its subsidiaries”. Having been burned at least once by ethical lapses on the part of its contractors, the company does not want it to happen again.

As reported by Portafolio, Fulvio Conti, president of power company Enel, announced that the company will enter “the gas-selling business, gradually, focusing on end customers, especially in Colombia and Chile.” Conti said that entering this business would be handled by Endesa and will be conducted over the next five years. Thus, Enel would replicate the business model that has in Europe, where subsidiary Endesa Gas is the second largest gas marketer in Spain.

Ecopetrol is sending out a number of press releases designed to bolster its corporate social responsibility credentials. This week, environmental issues have the focus especially the company’s considerable investment as part of its long-term strategy to produce “clean barrels”. From an Ecopetrol press release, translated and with commentary by Hydrocarbons Colombia.

We find the USO’s embracing of environmentalism incredibly cynical but they have seized on this as a way to connect with the broader public and justify their strategies. Ecopetrol understands this and so we have a recent detailing of their environmental investments. Pacific Rubiales also highlights its environmental record, but principally it seems for ethical investors.

Incidents were up this week to 44 just over 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. (On average during the past year, 75% of incidents have been initiated by the Armed Forces and this week the percentage is 87%.) Our 4-week Moving Average was flat at 42 incidents per week closer to what amounts to a long-term average.

Peace talks advance based on the approval of President Santos and new proposals from the FARC. In recent statements, Santos said: “My conclusion, after talking extensively with the committee that is in Havana, is that the process is going well: they are working on the construction of an agreement that never before has been done in Colombia.” Indeed, Santos was so optimistic with the progress that he said achieving peace is a matter of months: “This is how conflicts end, here and anywhere in the world: with serious and disciplined working on drafting an agreement with concrete commitments. If we keep the pace of the last few weeks, it is perfectly possible to complete the work in months.”