News and AnalysIs for

Canadian services firm Zedi Inc has selected PetroTiger, a Colombian oil services firm with operations in Colombia, Ecuador, Argentina, Mexico and Panama, to resell its services.

This is the first time that Zedi has authorized an international reseller.

This map is the portion of the National Hydrocarbons Agency (ANLA)’s detailed map of exploration and production blocks in the area around the Caribbean islands of San Andres. The blue-grey color means the blocks are available for assignment but currently unassigned. It is doubtful if anyone will ask for them now. The Environment Ministry just had the area (known as “Seaflower”) declared one of 18 marine areas under the “Protocol on Specially Protected Wildlife Areas in the Caribbean Region”.

Yesterday a prominent Colombian congressman, Simon Gaviria went on a national radio program and made a statement (which he attributed to the Finance Minister) about Pacific Rubiales that – if true – would have had a significant impact on the company’s future performance. We will not repeat it so we are not even accidentally responsible for continuing a rumor which is patently false./

We have been collecting financial and operational data on the companies with significant production in Colombia. Our database goes back to 2009 and so far covers nine companies in depth. The seven in the chart are sufficiently mature for us to estimate their average Operating Income for the last year. Economic theory says that larger companies in terms of revenue should have better margins if only because they can spread their fixed costs over a bigger base. Sometimes larger companies lose this advantage by being bloated and inefficient.

Pacific Rubiales receives a lot of criticism in the alternative press for its massive publicity campaign. Image advertising is seemingly everywhere and the company is the major sponsor of the National Soccer Team. Websites like La Silla Vacia, Kien y Ke or RazonPublica.com speculate that the publicity is an attempt to buy the mainstream media and whitewash what must be terrible things the company must be doing.

Colombia’s Auditor General — known in Spanish as the Contralora — is supposed to be responsible for assuring that the nation’s resources are well spent and that revenues reflect economic activity. Lately however, Sandra Morelli Rico has become concerned that the Environment Ministry (MinAmbiente) has not been sufficiently vigilant on environmental issues, especially in the extractive sector. We commented on her letter about non-conventional hydrocarbons extraction here. On Monday, October 22nd the office published a report criticizing a number of projects in the extractive and energy sectors for reasons which — while they will play well to certain sectors of public opinion — in some cases appear to lack a basis in fact.

This is more fun than anything else at this point. We have taken our Security Incidents Near Hydrocarbons counts and color coded the departments. The more red the color the more incidents. The fewer, the “cooler” the situation and thus the department is “blue”. We have superimposed the outlines of the major basins for reference.

The Colombian Petroleum Association (ACP) has published a press release on the negative impacts of a number of laws initiated by Congress – which are not backed by the government – that seek to increase government take and give back to local communities part of what they lost in royalties. Translated and with commentary by Hydrocarbons Colombia.

Ecopetrol and Chevron will upgrade the compression facilities at the Chuchupa field to increase its daily gas production. For this, the field will be off-line from October 30th to November 3rd. More maintenance will take place at the end of the month. From an Ecopetrol press release, translated and with commentary by Hydrocarbons Colombia.

The National Hydrocarbons Agency (ANH) recently published basic exploration statistics as of September 2012. From a drilling point of view the news is not good — the country is likely to fall short by 58 wells — and from a success point of view the story is even worse. Only 3 of the 93 wells drilled are reported as being productive and all 34 A3 wells that have come to a definite conclusion have been declared dry. There are still 52 A3 wells under testing. Seismic is a better story with the country likely to exceed its targets for kilometers of seismic by a comfortable margin (see chart at the bottom of this article).