News and AnalysIs for

Newspaper El Neuvo Siglo reports on the growth of bio-fuels from a forum called “Past, present and future of bio-fuels policy in Colombia”. It says that demand has doubled in just the past two years. The current mix is 8% bio-fuel to 92% conventional gasoline and the industry wants that to increase to 10%. Bio-diesel is another opportunity especially in large scale mining operations.

Water issues are especially important in Colombia given the uncertain framework around unconventional hydrocarbons and the significant use of water both as an input and an output of heavy oil extraction in the Llanos. Recently the Ministry of Environment and Sustainable Development brought together a number of government and academic groups to study underground aquifers. From a MinAmbiente press release, translated, and with comments by Hydrocarbons Colombia.

Pacific Rubiales published an operational report full of interesting information but the real jaw-dropper was the growth in the venerable Rubiales field since receiving National Environmental Licensing Agency (ANLA) permission on August 8th to increase water injection. The field had produced (gross before royalties and working interest) 169mbd in July and that was the third month in a row that production had dropped. Production was only slightly better in August at 170mbd. But since then Rubiales’ field production has grown at 4% per month and the company says it is currently “in excess of 200 mbd” – 30mbpd higher than in July.

The OECD will be in Bogotá this week to study Colombia’s environmental policy. The investigation is part of a larger study to identify best practices but the government is taking it as a way of validating its current strategy and showing off to the world its implementation. MinAmbiente also plans to make a major gesture in environmental management of the sensitive and emblematic Amazon region by expanding the Chiribiquete Park. From a MinAmbiente press release, translated and with commentary by Hydrocarbons Colombia.

The National Environmental Licensing Agency (ANLA) amended the environmental license granted in 1987 to the Chevron Petroleum Company. This amendment allows Chevron to develop gas wells in the Rioacha area (La Guajira).

Based on numerous reports in the Colombian press Minminas Federico Renjifo believes about 100,000 barrels of oil production is held up due to delays in the granting of environmental licenses. In some cases National Environmental Licensing Agency (ANLA) employees are making requirements beyond those established by law. Renjifo also claimed that the licenses are a bottleneck and there need to be manuals for the procedures to be followed by companies to get crude oil exploration and development licenses.

The Colombian press and congress is stirred up about the lost hydrocarbons potential of the territory that disappeared in the redrawing of the Colombia-Nicaraguan maritime border (see map by Hydrocarbons Colombia). Nicaragua adds fuel to the fire by publicly rubbing its hands with glee over the prospect of auctioning the zones to deep pocketed oil companies. That may indeed happen – although we think PDVSA will end up with them – but we do not believe this represents lost reserves, production or money to Colombia.

Resolving a long standing dispute between Colombia and Nicaragua, the International Court in The Hague redrew the maritime boundaries between the two countries today. Colombia keeps the islands in the Caribbean that have been part of the country for a very long time but the court extended Nicaragua’s economic zone further east, surrounding some of this islands and nearly enclosing others. Some offshore blocks disappear from the National Hydrocarbons Agency’s (ANH’s) inventory completely and some have been reduced in size.

RCN Radio reports that the Farc are assumed to be responsible for an explosives attack on the TransAndino pipeline in two separate locations. The first was in the village of El Verde in municipality of Puerres in the department of Nariño and the second was a few kilometers away in the village of San Pablo in the municipality of Cordoba in the same department. Both are located near the border with Putumayo.

Earlier we reported that Maurel & Prom have come under fire for seismic testing in Boyacá. Residents claim that explosive charges damaged houses and ruptured water pipes, leaving residents of one municipality without water for five days. National radio network W Radio took up the residents’ cause and made the story a central part of its morning program, which enjoys the country’s highest audience rating. Today at the Colombia-Canada Chamber of Commerce’s Dialogue Canada event, National Hydrocarbons Agency (ANH) head Orlando Cabrales Segovia gave his point of view.