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.
The graph shows the destinations of Ecopetrol’s crude oil exports since early 2011. This is not the whole picture obviously – other companies do not provide this helpful detail – but it is illustrative. From a peak of 77% of exports in 3Q11, the US has diminished as an export destination to less than half, 46%. The US Gulf of Mexico alone has shrunk from 68% to less than 30%. Finally in 4Q11 a new top destination was crowned, the Far East, driven by deals in India and China (although the US as a whole remains the largest customer overall).
We showed a version of this graph in our November Inner Circle Monthly report which shows the two most common global benchmars, WTI and Brent and the Average Realized Oil Price in Colombia, as measured by those operators which report pricing. The Unweighted Average lies almost perfectly between average WTI and average Brent. The production-weighted Average is heavily pulled by Ecopetrol and shows more variation. The dotted lines show our estimate of these values for 4Q12 and our (admittedly early-days) projection of the numbers for 1Q12.
Multiple sources in the Colombian news media reported that Ecopetrol awarded business group Empresas Públicas de Medellín (EPM) a contract to build, maintain and operate two power lines that will transport electricity to the Barrancabermeja refinery. In the coming days, EPM will begin environmental procedures for the construction project, which will have a 230,000-volt substation and 250-MW-capacity lines 10-kilometers long .
National business paper Portafolio reports that Ecopetrol is preparing an analysis of the delivery date and costs of the Cartagena Refinery (Reficar) enlargement. Initially the company approved a US$4.9B budget; however, costs could exceed th US$5B. Ecopetrol expects to complete four of the fourteen units that make up the enlargement this year, which will become operational only when the entire set is ready, as the units are part of a complete refinement cycle.
El Espectador reports that governor of La Guajira, Juan Francisco Gomez Cerchar, requested that PDVSA be in charge of importing and distributing fuel in this department. To this, the Ayatawacoop indigenous cooperative, which distributes fuels in La Guajira, expressed its opposition and questioned the understanding of the governor and his staff on the issue, as this is not feasible under the law 681 of 2001.
According to DANE (as reported by national business newspaper La Republica), exports fell 8.2% in November 2012. Part of this decline was due to a 13% drop in exports of fuels and other extractive industry products, and the decline in the export of beverages, food and agricultural products.
2025, Hydrocarbons Colombia, All Rights Reserved.
