News and AnalysIs for

Incidents were down this week to 40 just about 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. In fact, the ratio is sufficiently high to think that either the traditional media are only reporting extreme events or the Farc are relatively quiet. (On average during the past year, 75% of incidents have been initiated by the Armed Forces and this week the percentage is 90%.) Our 4-week Moving Average was up slightly at 43 incidents per week closer to what amounts to a long-term average.

This week concluded the seventh round of peace talks and both the government and the FARC commented on it. The parties issued a joint statement in which they say: “We continue to make progress on discussion of the first item on the agenda and in building agreements on issues of access and use of land, undeveloped land, property formalization, agricultural frontier and protection of reserves areas.”

RCN Radio reports that according to Pacific Rubiales’ vice president Federico Restrepo, the company has increased its oil reserves thanks to projects like the La Creciente gas field (Sucre) and others developed in Peru. Pacific also increased its reserves to 517M proved barrels with other findings which will allow oil supplies until 2027.

ProductionMinMinas recently published final oil and final gas production numbers by month for the period January to December 2012. The graph shows the distribution of production by department.

Caracol Radio reported that the government will use drones to monitor and protect the Cano Limon Coveñas and TranAandino pipelines. Additionally, the government will increase the rewards to prevent attacks on pipelines and also will use twenty helicopters recently purchased for the same purpose.

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.