News and AnalysIs for

The General Royalty System (SGR) and the National Planning Department (DNP) have issued a string of nearly daily announcements in June detailing advancements and approval of projects that will receive funding using the royalty system.

Colombian President Juan Manuel Santos visited the city of Villavicencio in the Meta Department and called for a balance between oil production and the environmental and social needs of the community.

Colombia’s Unidad Nacional political party has put assistance to community mayors in obtaining funds from the General Royalty System (SGR) on the agenda, with a senior member suggesting changes might be needed at a congressional level.

The Banco de Bogotá has been one of the lead banks to finance the US$5B needed for all three phases of the Bicentennial Pipeline and bank executives expect this role to continue as the pipeline becomes operational.

We have not one but three interviews this month.

We calculate that Petroamerica is the 8^th largest company by market capitalization listed on the TSX or TSX-V exchanges with operations in Colombia and the largest non-operating company of the Canadian group.

Castilla Crude Refining Economics

In the last two months heavy grades have remained strong in the Gulf of Mexico market. Margins have been positive, at least in the higher end Gulf of Mexico conversion refineries.

The USO in a statement says it categorically rejects the model of new contracts that Ecopetrol’s administration is proposing. The union calls it an attack against the workers, as it will allow contractor firms to lower headcount, decrease salaries and hierarchical ranks of works, increase the work load through “multifunctional” workers. This will expose workers to a higher risk of accidents, breaking the internal policy of Ecopetrol called “Work Safely, Clean Barrels”.

Ecopetrol, through its subsidiary Bioenergy, has land holdings that exceed the legal limits established by Colombian law.

Counts were down for the third week in a row to 23 below recent and long-term averages. This was a much lighter than normal week for non-armed forces reported/guerrilla-initiated incidents. Our 4-week Moving Average incident count was down to 31.3 incidents (down for the sixth straight week) but the 52 week average was up slightly again to 39.2 incidents per week.