It is a stereotype that rolls easily off the tongue: the Colombian royalty rate is 20%. Data from 1Q13 shown above shows that it is not. The bars represent the average royalty rate for the top producing departments (excluding X Factors paid on E&P contracts) and the figures displayed on the bars themselves is average daily production in thousands of barrels per day.
The National Hydrocarbons Agency (ANH) is preparing a campaign to push through regulations that would allow exploration for unconventional reserves in areas that have already received approval for conventional extraction.
Pacific Rubiales CEO Ronald Pantin says that recent changes to simplify environmental licenses will improve its timelines for the environmental permit process in Colombia, which in the short term will lead to approval of a license to operate the CPE-6 block in the Llanos basin.
The director of the National Planning Department, Mauricio Santa María believes that the long term goals of the new royalties system (SGR) are on track despite a growing chorus of critics questioning its effectiveness.
Colombia’s Chamber for Petroleum Goods and Services, Campetrol, published a statement written by Pacific Rubiales which outlines the company’s case that it has been a model in terms of development and ideas for how the industry must move forward.
The Natural Gas Association (Naturgas) says that proposed changes that would institute a system of public auctions to set wholesale prices as proposed by Colombia’s Energy Regulatory Commission and Gas – CREG would lead to price increases and opposes the system.
Parex made a somewhat unusual midyear announcement of its reserves and a more usual announcement of its 2Q13 production. Both stories are very good but the reserves story is spectacular. By the close on Thursday, July 11 2013, the stock was up 17% from its Tuesday close.
A decree expected in late July will reportedly shorten the environmental licensing process for small changes to conventional projects that already have gained approval.
Delays in environmental licensing are seen as the main cause in an 8% drop in rentals of perforating drills in January-May 2013.
The General Royalty System (SGR) and the National Planning Department (DNP) have issued a string of nearly daily announcements in June detailing advancements and approval of projects that will receive funding using the royalty system.