News and AnalysIs for

The Colombian Association of Natural Gas (Naturgas) is making a significant contribution to the government’s housing program. The plan is to build 100,000 low-income houses as part of broader program to increase home ownership. The companies will contribute just under US$12M, mostly through discounted infrastructure but also through a program to give away gas stoves. From a Naturgas press release, translated, extracted and with commentary by Hydrocarbons Colombia.

President Santos announced that pending royalties resources will be disbursed in February. The OCAD last year approved CoP$2.1T (US$1.4B) for projects and, according to Santos, “These resources will continue disbursement. Next month all those resources will be disbursed “(as quoted in national business newspaper La Republica).

The Colombian Petroleum Workers Union (known as USO) apparently also takes an extended vacation period over the year-end holidays since news was light over past three weeks. The biggest news was an agreement with SAExploration Company in Puerto Gaitan, Meta to settle a work stoppage. The company took back terminated workers and provided bonuses.

As a result of heavy rains, part of a pipeline near the village of Dosquebradas, collapsed, broke open causing a fire that killed several people and injured more. On about the one-year anniversary, Ecopetrol has issued a press release. Translated and with commentary by Hydrocarbons Colombia.

As reported by newspaper El Nuevo Siglo, there are now about 50,302 oil service workers in Colombia. Of these, 18,401 (36%) are unqualified staff, 18,431 (37%) have a technical degree and 13,470 (27%) are professionals. 15.636 (31%) are permanent employees and 34.667 (69%) have a temporary contract.

Newspaper El Neuvo Siglo reports on the growth of bio-fuels from a forum called “Past, present and future of bio-fuels policy in Colombia”. It says that demand has doubled in just the past two years. The current mix is 8% bio-fuel to 92% conventional gasoline and the industry wants that to increase to 10%. Bio-diesel is another opportunity especially in large scale mining operations.

The main story this week is the assassination of Milton Enrique Rivas, a union leader in Termotécnica, a Cepsa subcontractor in Puerto Gaitan, Meta. The USO has been trying to widen the conflict to include both Ecopetrol and Pacific Rubiales to no avail. Local authorities and the company blame union member for Rivas’ murder which – whether true or not – only raises tensions. This unfortunate death will have wider implications since Colombia’s black mark is a high rate of assassinations of union leaders, which obviously gets the attention of international labor groups, NGOs and even the Democratic Party in the US:

We recently attended a lively and interesting session on this topic, organized by national news magazine Semana and sponsored by the National Hydrocarbons Agency (ANH). There was much lively debate on the royalties issue and much agreement about the need for Corporate Social Responsibility. But we were left with the impression of Bogotá elites talking to Bogotá elites. There was little scope for the communities themselves to contribute.

It was telling that MinMinas reported that President Juan Manuel Santos announced a plan to boost the Putumayo department development. The department is one of the poorest and yet is the focus of much oil exploration and production. The projects initiated or ongoing have to do with issues of energy, roads, health, education, land titling and victims’ restitution. According to Santos, the government will set a special price for gasoline in this border department and there will be permanent electricity in Puerto Asis.

This week the USO reported on its national assembly and its plans to create an occupational health department. More important is a news item on hearings in Villavicencio on the social and environmental impacts of the mining and hydrocarbons sectors in the department of Meta. A left-wing senator, Alexander López Maya told the hearing that working conditions in Puerto Gaitan were typical of a concentration camp. That’s strange considering that Pacific Rubiales told a conference on sustainable communities and petroleum last Friday that it had no community or labor relations issues in Puerto Gaitan. Although the truth is no doubt somewhere between zero and the Gulag archipelago, we are inclined to think it very much closer to the company’s point of view than one reported by the USO.