News and AnalysIs for

The Ministry of Mines and Energy (MinMinas) will meet this week with representatives of coal miners Cerrejón and Drummond, as well as Ecopetrol (NYSE:EC) to discuss Coal Bed Methane (CBM) that has been the center of conflict between the two coal miners over an unclear concession.

The General Controller’s office has issued a report that blames a number of manmade influences, including oil production, livestock and rice plantations, for the Casanare drought earlier this year, but singled out seismic activity and the drilling of wells as the main responsible action for the drought.

The National Planning Department and other authorizes have organized an expo for regional entities on the royalty system, while Meta finally has its OCAD review. Producing regions might not like the new royalty system, but other regions, such as Sabana de Torres, Santander, have used it to their advantage. These and other stories in our routine round-up of royalty related stories.

The National Environmental Licensing Authority (ANLA) has placed restrictions on the disposal of produced water from the Rubiales field into a waterway with the same name, citing the environmental risk for the area surrounding Pacific Rubiales (TSX:PRE) namesake, and largest producing field.

Brazilian oil operator Óleo e Gás Participações (OGX) says that social and environmental issues pushed it to divest its Colombia assets in the Cesar Rancheria (CR) and Lower Magdalena (VIM) basins, and continues negotiating with the National Hydrocarbons Agency to reach an final exit plan.

We have low expectations of ‘rendering of accounts’ sessions because they are typically well orchestrated to avoid controversy and minimize the risk of criticism spiraling out of control. However we were presently surprised by the recent MinMinas session which essentially closed out the first Santos government’s management of the area.

National Hydrocarbons Agency head, Javier Betancourt has been telling audiences that MinMinas Amylkar Acosta wants the ratio of crude oil reserves to production (R/P) to be 10 years and he wants it done within five years. A bold goal that we think will require some important changes.

A Bucaramanga based company called Allianza Ingeniería is leading a group of developers that received a patent for a technology that can treat water extracted from hydrocarbons production at a low cost and the company wants to see the technique used at a greater scale in the country.

Local hiring, road maintenance and safety standards were all discussed at departmental meetings in Casanare, where local authorities have been working to facilitate a smoother relationship between oil companies and local communities. This and other stories regarding Colombia’s roads.

The Minister of Environment (MinAmbiente) Luz Helena Sarmiento has announced the establishment of 2 million hectares of protected land, and says that the government looks to declare 2 million hectares more as part of its efforts to better adapt to climate change.