News and AnalysIs for

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.

Orlando Díaz Montoya, manager of Ecopetrol’s Barrancabermeja refinery, spoke to national business paper La República about the modernization project that is moving forward there. According to Diaz, in 2012 the project advanced 12.3% and is now being engineered to join new systems to existing ones. To start this phase requires the purchase of land, logging permits, permits for the connection to the national interconnected system, an Environmental Management Plan and a Port Concession.

Local news website NoticiasDeVillavicencio quotes Alan Jara, governor of Meta, saying that the process of building a refinery in Meta continues. To this end the government created the company Llanopetrol which is associated with the U.S. company, Structural Solution. The name of the refinery will be Llasol and, according Jara, the land for the construction is available, there is oil to be refined and the project has the support of Colombian President Juan Manuel Santos.

If one were confronted with the simple question: “What is the price of a barrel of oil?” you would need to reply in turn with many other questions: “When?”, “Where?”, “A physical or a ‘paper’ barrel?”, “What quality?”, “To be sold/bought by whom?”, etc.

Despite the wild swings of global benchmarks, most Colombian producers managed to keep their prices steady, losing only US$1 or so from their 2Q12 prices. But Ecopetrol’s average realized price was down over US$4 and C&C Energy’s price was down nearly US$5.

The popular press likes to report on the movement of WTI and Brent as benchmarks for Colombia crude prices. In the worst cases, they only report WTI often calling it “the price of oil”. The reality is that Colombian crude spans a number of grades and qualities based on viscosity and sulfur content. The global benchmarks are relevant but quality and transportation cost against such benchmarks are what determines price. The graph shows the distribution of API (viscosity) by volume as measured by the Ministry of Mines and Energy.

According to a MinMinas press release, natural gas service this year reached 550,000 new users and electricity subsidies for economic stata 1, 2 and 3 will total CoP$ 2.3B (US$1.3B). This was announced on Monday by MinMinas, Federico Renjifo, as part of the mining and energy sector Accountability Public Hearing.

Ecopetrol guarantees that all diesel fuel from January 1st, 2013 will have only 50ppm sulfur. From an Ecopetrol press release with comments by Hydrocarbons Colombia.

The Spanish electricity generation company said in a press release that it will enter the retail gas market next year. According to the press release: “This initiative responds to the opportunities presented in the Colombian market and expectations that consumers currently have for new offers and agents.”