News and AnalysIs for

We do not usually comment on global petroleum trends but having stared at this graph for weeks now we thought it worth publishing. It shows weekly closing prices for the two most commonly discussed benchmark prices – WTI and Brent – in US dollars going back to just about a year before the collapse of Lehman Brothers, the generally accepted start of the current financial crisis.

Business magazine Dinero reported that lawyer Camilo Araque filed a demand at the Constitutional Court against article 101 of Law 1450 of 2011. Araque considers that this article, which decrees that the Ministry of Mines and Energy is in charge of setting the price of fuel, “displays an incontrovertible ignorance of the Constitution.”

Naturgas, the association of producers, transporters and distributors held its annual meeting in Cartagena last week. Colombian President, Juan Manuel Santos, attended a ribbon cutting ceremony to launch gas services in a historic small town near the city and then addressed the association’s membership, giving a pep talk for domestic gas. From a Naturgas press release, translated and with commentary by Hydrocarbons Colombia.

Last week was the natural gas industry association’s annual conference and he minister’s speech is a much anticipated event. MinMinas Renjifo did not disappoint the crowd with the breadth of his speech but we understand the content has the industry concerned over certain points. From a MinMinas press release, translated and with commentary by Hydrocarbons Colombia.

Portafolio reported that during the XVI Naturgas Congress, the superintendent of Domestic Public Services, César González Muñoz, said the management of the Gas Development Fee Fund budget has been inefficient, because the US$30.5M (77% of total approved projects) invested between 2007 and 2012 benefited only 54,601 of the 78,823 users the government expected to benefit.

As reported by Portafolio, Fulvio Conti, president of power company Enel, announced that the company will enter “the gas-selling business, gradually, focusing on end customers, especially in Colombia and Chile.” Conti said that entering this business would be handled by Endesa and will be conducted over the next five years. Thus, Enel would replicate the business model that has in Europe, where subsidiary Endesa Gas is the second largest gas marketer in Spain.

The Colombian government has a long term program to increase natural gas penetration in Colombia. The purpose is environmental – diversification from more carbon intensive fuels – and partly developmental. Last year the association of producers, transporters and distributors of natural gas Naturgas signed an agreement with the Minister of Mines and Energy to add just over 430,000 new users. The target was exceeded. From a Naturgas press release, translated and with commentary by Hydrocarbons Colombia.

The coffee-growers strike has inspired the truck-drivers’ union to declare a strike and block key north-south routes. Colombia’s refinery capacity is all in the north and yet there is significant population and demand in the south. The Ministry of Mines and Energy (MME), has coordinated fuel transportation alternatives supported by the Colombian Air Force (FAC), to supply the regions that have been affected by road blocks in the south.

As reported by National business newspaper Portafolio, Fitch Ratings Colombia, a rating agency, estimated that the company Terpel will invest US$895 in the next five years, due to expected increases in sales.

Norte de Santander is a crude producing department but it has no refineries. It is closer to Venezuelan refineries than Colombian ones and there is a large problem with contraband because Venezuelan gasoline is subsidized and Colombian is not. Thus service stations in the northeast have developed legally sanctioned supply chains into the neighbor country. Because of the turmoil in its neighbor, the Colombian government has stepped in to assure supply. From a MinMinas press release, translated and with commentary by Hydrocarbons Colombia.