News and AnalysIs for

National business magazine Dinero reports that the Colombian State Council, a superior court for government issues, declared today that Ecopetrol must pay CoP$1B (US$568,000) for damages from a propane gas pipeline attack in 1991. The attack occurred in the section between Puerto Salgar and Facatativá, in the rural area of the municipality of Albán in Cundinamarca. The explosion and resulting fire from escaped propane damaged agricultural facilities and crops in the surrounding area.

The Territorial Development Finance company (Findeter) is an autonomous corporation reporting to Colombia’s Minister of Finance (MinHacienda). It can raise its own debt (which has a sovereign rating) and receives deposits from government agencies. It then lends this money to municipalities, departments (states) and other entities providing low-cost financing for infrastructure and development projects. The company recently announced its budget for next year. From a Findeter press release, translated and with commentary by Hydrocarbons Colombia.

The Government established a public-private partnership with the Carare Railroad Development Corporation (Corpocarare) and metallurgical coal producer Minas Paz del Río. The route runs through the Central Cordillera where non-conventional hydrocarbons blocks are defined and a few have been assigned.

National business newspaper Portafolio reports that the study “System of cities” of the World Bank and Colombia’s National Planning Department revealed the underdevelopment of the country’s road system. According to the study, apart from the usual traffic jams in cities, there is a notable lack of connectivity between them. In addition, the study states that “if Colombia had the quality of infrastructure of Costa Rica, economic growth could be up to 3 percent higher.”

Mintransporte Cecilia Alvarez-Correa announced road infrastructure investments planned by the government for next year. (As reported by national business paper La Republica) According to Alvarez-Correa, the government plans to allocate CoP$18 billion (US$9.9B) for infrastructure in 2014, CoP$11 billion more than in 2012.

According Fedesarrollo (as reported by national business newspaper Portafolio), low investment and the low quality of the roads make it difficult to Colombia being competitive in transport. Moreover, the government lacks information about 86% of the country’s roads which makes it impossible to know what is their condition.

Many Colombian news sources picked up a BBC story about Qatar investing its oil wealth in building a knowledge-economy. That so many picked up it meant a number of news editors thought it suggested a different approach to using royalties. That got us thinking as well.

The Colombian press reports that President Juan Manuel Santos has announced a CoP $900B (US$496M) investment in a sector of the route Bogotá – Villavicencio. The investment will be carried out to improve traffic flow on this route. Work on this stretch will begin in 2013. Another CoP$800B will be invested on a route linking the municipalities of Cáqueza and La Calera with Bogotá.

Ecopetrol announced that it transferred a package of assets to its subsidiary Cenit, a hydrocarbons transport company, in exchange for 45,582,982 shares. This contribution is part of a corporate reorganization in the hydrocarbons transport and logistics business line of Colombia’s national oil company, Ecopetrol.

RCN Radio has been giving considerable coverage to the problems of Meta, not always with a positive view towards the hydrocarbons industry. Last week however, it wrote an article on the drive from Bogota to Villavicencio with an objective mindset. This route is used heavily by tanker trucks moving crude from the Llanos to ports and refineries and, on the return leg, naphtha as a diluent to the fields. The report makes it clear there will not be a solution to congestion and dangerous accidents anytime soon and that there could be short-term consequences for the industry.