Website ConfidencialColombia.com reports that Pacific Rubiales will invest US$30M in social projects this year, 5% more than in 2012. Alejandro Jimenez, corporate social responsibility manager of the company, stated: “2013 investments will benefit indigenous and ethnic communities, and other minorities. The good relationship with communities was evident in the harmonious atmosphere that maintained an uneventful operation; there were no blocks or public order disturbances during 2012 or so far this year.”
Canacol’s production reports always generate work in the HCC offices because their business is never simple. Through the first half of 2012, most of their revenue-generating production was so-called “Tariff” which was essentially was a services contract where they pumped oil for another company at a set fee per barrel. This was a low-netback business that the company has been deemphasizing, expecting it to be only about 11% of its business in 2013. As the graph shows, they also report figures before royalties, a not uncommon practice but one we do not agree with and normally try to adjust for.
Business newspaper La Republica reports that Pacific Rubiales awarded suppliers and contractors with the best performance in 2012. To this end they organized the third meeting of suppliers and contractors. Federico Restrepo, the company’s vice president of corporate affairs and sustainability said these incentives allow service companies “continue to accompany us on this journey towards higher levels of activity, efficiency and competitiveness.”
The graph shows Operating Income Margins (averaged over the previous four quarters) fell in 3Q12 for all companies except Suroco and have been falling for two quarters except for Suroco and Parex. The companies shown are the largest producers who are specialized in Colombia and who publish sufficient financial detail for us to do the calculation. The trailing four quarter average (MA 4) smooths out some of the variation but does not do justice to Gran Tierra which has actually had rising margins this year but these are lower than the corresponding quarters in 2011.
Chilean oil and gas company GeoPark produced its first set of quarterly results for the nine-months ending September 2012. The company says it plans to produce quarterly results from this point forward. In 2012, GeoPark acquired Colombian producers Winchester, La Luna and Hupecol all of which contributed to a nearly 50% year-over-year increase in oil and gas production and a 147% increase in revenue. The company produces gas in Chile but with the new Colombian assets its revenues from oil have climbed to 87% of total.
This is the latest in a steam of announcements by the state-owned oil company about new patents coming out of their R&D group. From an Ecopetrol press release, translated and with commentary by Hydrocarbons Colombia.
Source: Campetrol, Hydrocarbons Colombia
This graph shows the latest data published by the Colombian Petroleum Services Association (Campetrol) from 2011 which is the last full year for which data is available from the Colombian company regulator SuperSociedades. These companies are registered in standard industry code (CIIU) C1120 which is defined as “SERVICE ACTIVITIES. RELATING TO OIL AND GAS EXTRACTION, EXCLUDING SURVEYING” Twenty-five firms or 16% of the companies studied comprise 80% of industry revenues. The Top 5 include industry heavyweights like Schlumberger, Haliburton, Weatherford and Baker Hughes. But there is a very long tail of 134 companies with average 2011 revenue of US$7.8M. (Twenty-eight firms have no data and so were excluded.) The bottom 50% of firms (80 companies) have average revenues of US$1M.
Pacific Rubiales recently published its investment plans for 2013. Ecopetrol did the same before at the end of December. Although the gross amounts are quite different – Pacific will invest US$1.7B whereas Ecopetrol will invest US$9.7B – considering their relative sizes in terms of revenues and production, Pacific will invest much more. We estimate 40-45% of 2012 revenues for PRE versus only about 25% for Ecopetrol.
Parex reported preliminary production numbers for 4Q12 of 12,800bd. That represents a nearly 18% increase over the third quarter. December average production was 13,550bd so there would be high hopes for 1Q13. We had previously written that one of the company’s challenges was growing new fields faster than the Kona field was declining. Although this press release provided no field-level detail, it certainly appears that Parex accomplished this in aggregate.
Suroco has operating and exploration interests in Colombia’s Putumayo basin. According to a company press release, they exited December with production at 1,400bd compared to an average December production of 1,271bd. This can be compared to September’s figure of 1,231bd and 3Q12’s figure of 1,111bd.