News and AnalysIs for

Not much new this week except a major fine on Ecopetrol subcontractor and subsidiary Ecodiesel for US$333.000 for refusing to negotiate with the union which the USO says is the lowest fine that can be levied in this case. Otherwise, the Termotécnica dispute drags on.

Incidents were down this week, returning the average for the last four weeks. The vast majority of these were the Army continuing to discover camps, minefields and weapons caches so perhaps the Farc are keeping up their truce commitment.

According Fedesarrollo (as reported by national business newspaper Portafolio), low investment and the low quality of the roads make it difficult to Colombia being competitive in transport. Moreover, the government lacks information about 86% of the country’s roads which makes it impossible to know what is their condition.

National business magazine Portafolio reported that Enrique Velasquez, Ecopetrol Exploration VP, said that, while in 2010 the company’s oil, condensate and natural gas reserves were 1714 Mboe, in 2011 they totaled 1857 Mboe, an 8.3% increase. In 2011, the reserve replacement ratio was 164%. However, it is important to note that 2011 reserves report did not include the two previous years’ findings. Velasquez said that these reserves will be enough for 8.4 years.

The National Hydrocarbons Agency (ANH) was active this week with announcements of the final results of the supplemental auction round, phase 2 of the 2012 Round of auctions, an accounting of its actions for the year and a number of press interviews highlighting plans for next year.

The forum “Sustainable communities and oil”, organized by the ANH and national weekly news magazine Semana, will be held in Bogota on December 7. (As reported by the business magazine Dinero)

National business newspaper Portafolio reports that in 2013, the National Hydrocarbons Agency (ANH) will invest US$153.4M in subsurface studies in many areas of the country. The ANH will do this investment with the purpose of provide subsurface information to prospective investors, since in 2012 Round some companies chose not to invest in certain areas due to lack of geological knowledge.

MinMinas Federico Renjifo participates in The Colombia Business Summit conference organized by The Economist in Paris. From a MinMinas press release. Translated and with commentary by Hydrocarbons Colombia.

Many Colombian news sources picked up a BBC story about Qatar investing its oil wealth in building a knowledge-economy. That so many picked up it meant a number of news editors thought it suggested a different approach to using royalties. That got us thinking as well.

On November 19, 2012 we reported that Pacific Rubiales was buying C&C Energy in an all stock deal. Now in a press release, Fitch reports they rate the deal neutral to positive because “Pacific Rubiales’ production profile will improve through this transaction, as C&C’s lighter crude production will provide Pacific Rubiales with a more favorable diluent source to transport its heavy crude production. Pacific Rubiales estimates that this acquisition will represent savings of approximately USD376 million per year on diluent cost.”