News and AnalysIs for

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.

The NGO Transparency International released its Corruption Perceptions Index 2012. The index scores countries on a scale from 0 to 100 where a 0 score indicates that a country is very corrupt and a 100 score indicates that it is very clean. None of the 176 countries included in the index got a perfect score.The graph here shows the ranking of all the countries in the study with lower ranked being better.

Villavicencio residents are upset about all things hydrocarbons it seems. They marched on city hall to complain about Ecopetrol and on the Llanogas distribution company offices to protest high prices. These are not isolated incidents in the same week. They would seem to be fomented by community leaders for broader political purposes, but which tap into a vein of discontent.

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.

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)

(The USO is the Colombian petroleum workers union. Unrepentantly radically left, it often seems trapped in some Marxist-Leninist twilight zone from before the fall of the Berlin Wall or perhaps before the Second World War. Still its capacity for mischief is unmistakable and so we believe it is important for oil and gas industry stakeholders to keep track of what they are up to. We will summarize major news items from their webpage or other sources and publish the summary every Monday. We will reproduce the tone of their items while not agreeing with their messages.)

(The USO is the Colombian petroleum workers union. Unrepentantly radically left, it often seems trapped in some Marxist-Leninist twilight zone from before the fall of the Berlin Wall or perhaps before the Second World War. Still its capacity for mischief is unmistakable and so we believe it is important for oil and gas industry stakeholders to keep track of what they up to. We will summarize major news items from their webpage or other sources and publish the summary every Monday. We will reproduce the tone of their items while not agreeing with their messages. )