National newspaper Portafolio reports that current Mines and Energy vice-minister Tomás González will go to the President’s office, current Finance vice-minister Germán Arce Zapata will go to head the National Hydrocarbons Agency (ANH) and current head of the ANH Orlando Cabrales Segovia will replace Tomás González at Mines and Energy. The movement of Arce was described as absolutely certain, suggesting there was perhaps some doubt about where Orlando Cabrales might go.
Again a speech to the Large Scale Mining conference, which illustrates has the same problem to convince the population, press and opinion leaders that the economic benefit of their participation in the Colombian economy far exceeds the direct and indirect costs of extractive sector activities. From a MinMinas press release, translated and with commentary by Hydrocarbons Colombia.
Although hydrocarbons and mining are completely different, the Large Scale Mining sector faces many of the same public relations challenges that the petroleum sector faces. Political commentators accuse it of polluting and failing to pay its ‘fair share’ for the results of its activities. Communities look to extract services and investment that the Colombian state fails to provide in return for peace. Congressmen look at the sector’s profits and wonder how they can get a bigger slice of the pie for the public purse. In this context, what President Santos might say to the Large Scale Mining’s second annual conference has relevant things to say about the government’s attitude towards resource industries or extractive industries in general.
Caracol Radio reported that a group of congressmen led by Maritza Martinez, Jorge Enrique Robledo, Alexander Lopez and German Navas, presented to the State Council an action to nullify a concept of the Dian (Colombia’s tax authority). This concept allows oil and mining companies to deduct royalties from taxes payment.
As reported by newspaper El Nuevo Siglo, Orlando Cabrales, president of the National Hydrocarbons Agency (ANH), said that the agency will supervise the oil production of the companies in the country. At present, this work is done by the Ministry of Mines and Energy. “What we want is move forward with a much more automated control, much more systematic. It is now manual”, he explained, and he added: “We have to determine how much the production is.”
Business newspaper Portafolio reported that President Juan Manuel Santos said the government appointed six delegates of the National Planning Department (DNP) to decentralize this entity and establish direct contact with governors and mayors. The goal is to accelerate implementation of royalty-financed projects. The governors and mayors may think this is not enough.
Mauricio Cardenas, currently Finance Minister but until September 2012 Minister of Mines and Energy, closed the International Forum on Hydrocarbons 2013. He gave the finance department’s twist on the industry present and future and it gave the audience a somewhat different perspective. It was a generally positive speech, welcome in these difficult days.
Business magazine Dinero reports that the Comptroller General found irregularities in royalties’ resource management. According to a Comptroller’s report there are US$260Mn at risk in the Caribbean, Central East, Coffee Region, Llanos, Pacific and Central South regions, and projects from the National Royalty Fund in liquidation, for unfinished projects and for projects that do not work or have overruns.
In an interview with RCN Radio, MinHacienda Mauricio Cárdenas spoke of the need to increase oil reserves and the consequences of last year’s attacks against pipelines in the country. Cardenas said that considering there is enough oil in Colombia only for the next eight years, it is necessary to increase exploration; and this needs investment: “we need to explore properly: first, seismic activity. Then the expensive part of drilling wells, which can be worth US$30M, US$40M or US$50M.” He added that “this year Ecopetrol has US$10B, of which US$6B are for exploratory process. They are drilling more wells than at any time in their history. “