The Quifa/Pacific Rubiales/Ecopetrol story never dies! Now the Comptroller General (a kind of Auditor General) weighs in on the March 13, 2012 ruling to emphasize the difference in current WTI prices versus the historic prices, and therefore the Colombian state risks losing US$13M.From a Comptroller General press release, translated and with commentary by Hydrocarbons Colombia
Javier Gutierrez, president of Ecopetrol, made a visit along with company directors to inspect the progress of the Bicentenario Pipeline in the departments of Casanare and Arauca, saying it’s “weeks” from being operational.
Ecopetrol has kicked off its third National Call to Biodiversity, and is on the lookout to invest US$2.2M in conservation projects that focus on the tropical dry forest. From an Ecopetrol press release, translated and with commentary by Hydrocarbons Colombia.
Reyes Reinoso, president of Ecopetrol’s Cartagena Refinery (Reficar) spoke with Portfolio.co regarding the refinery’s modernization project. According to the executive, the project is now in its final stage and Ecopetrol’s board of directors have now approved a proposed increase in the total budget.
Ecopetrol’s results always grab our attention because they come out first. It is tempting to think of them as a bellwether for the industry if only because of the weight the state-owned-enterprise (SOE) has in total Colombian market calculations. So when the giant disappoints, as it did in 1Q13, it is worth asking the question if the causes are common to the industry in general or are unique to Ecopetrol.
As reported by Dinero, the company Cenit, a subsidiary of Ecopetrol, began operations last week. Cenit, specialized in oil transportation and storage, starts as the second largest company in the country, with US$7.7B in assets. “Cenit is the missing piece in the industry to strategically meet increasing hydrocarbon production in the country. We are the link the sector needed to solve the bottleneck in crude transport and for operational excellence in the service” said Camilo Marulanda, president of Cenit.
The Comptroller General (like an Auditor General) says that MinMinas, Ecopetrol and the National Hydrocarbons Agency (ANH) should be monitoring Pacific Rubiales production processes in fields that will eventually revert to Ecopetrol. The report contends that practices designed to optimize short-term extraction could damage the deposits to such an extent that future production will be adversely affected. From a Controlaria press release, translated and with commentary by Hydrocarbons Colombia.
There were a number of recent articles – of which we pick on ones from La Republica and Dinero from last week – to say that Colombian investors were streaming out of Ecopetrol and into Pacific Rubiales. The reasons were increases in Pacific Rubiales’ production and reserves, flat reserves and concerns about production in 1Q13 for Ecopetrol. All this is true so the logic is impeccable. The graph shows that perhaps investors are not as responsive to this logic as the articles suggests.
Pacific and Ecopetrol have been fighting over an escalation clause in the Quifa contract for over a year now. In late March, the day before Pacific was to publish its 2012 annual results, an arbitration board ruled in favor of Ecopetrol. After weeks of saying that there were legal avenues to be explored and pointing out that the arbitration board specifically stepped away from ordering the company to pay, Pacific now says they will honor the decision.
As reported by Caracol Radio, Congress will discuss the lawsuit between Ecopetrol and Pacific Rubiales for Quifa field exploitation. According to Senator Jorge Enrique Robledo, Pacific cannot refuse to pay Ecopetrol 1.5M oil barrels (equivalent to US$382M), after the Colombian courts ruled in favor of Ecopetrol.