News and AnalysIs for

In late October of 2012, the ANH held a block auction as the centerpiece of a conference in Cartagena. Tomás de la Calle and I attended, distributing paper copies of the first Hydrocarbons Colombia monthly. The website had come up earlier in the week. Now, ten years after, the website continues to keep you informed, if not always entertained.

Or maybe it is Irene Vélez’s fault but in any event the change in government has clearly impacted the share prices of Colombia-focused oil and gas producers. To no one’s surprise (we assume), Ecopetrol is among the hardest hit.

You are probably reading this on October 4^th, 2022, less than two months after Gustavo Petro was sworn in as Colombia’s president. Amongst other broad commitments he said “I will work to achieve true and definitive peace.” Specifically, he announced that he would immediately begin negotiations with the ELN. Shortly after that, Petro began talking about a “Total Peace”, incorporating not only the ELN but the narcos who continue to terrorize parts of the country.

As the lead graph shows, crude oil production rose this year (10,786bd). Not much (1.5%), but it rose. Here’s why.

Among MinEnergia Irene Vélez’s many ‘faux pas’ is telling the Colombian Mining Association’s annual conference that developed countries should shrink their economies to reduce the load on the environment. This would also allow her and her cabinet colleagues to reduce the extractive sector – guilt free – because there would be less consumption.

Because the third quarter, at least, is unlikely to be as positive.

We spoke to Maria Lara Estrada of LATAM Airlines Colombia and she told us that the secret to cleaner aviation is all in the process. Sustainable Aviation Fuel (SAF) is the airline industry’s solution to lowering air travel emissions. (This was published last week in our sister publication ePower Colombia. We know that many of you read both but we thought this article was important to be in the two databases, for those that do not subscribe to both and for future searches.)

Now that 2022 is half over (from a financial viewpoint) we have a good view of what ISA is contributing to Ecopetrol’s results. We also take a look at the E&P Line of Business (LoB) and update our usual (and popular) charts on Transport.

Last week, we published some quantitative analyses on certain aspects of Colombia’s proposed tax reform. Here are some qualitative comments on ideas in the draft bill that are either not quantifiable or where we decided there were too many scenarios to make quantitative analysis feasible. Note that as we write – August 21, 2022 – MinHacienda is talking about changes to the draft and there will be negotiations in Congress from now until the bill passes. If there are significant changes to the bill, we will likely publish a new commentary rather than updating this one.

It is hard to believe that President Gustavo Petro was only inaugurated a week ago (as we write). The new government has already submitted two draft laws which represent its campaign commitment to hobble the extractive industries, especially oil and gas: a tax reform and a law against unconventional reservoirs. Here we do some simple graphics to illustrate the potential consequences of the windfall tax included in the former.