There is concern in the oil sector about the possibility that Congress increases taxes on oil companies. Regarding this, Alejandro Martínez, Colombian Petroleum Association president, told a press conference: “We are extremely concerned about pending bills in Congress because these would increase the state’s share in the oil revenue, taking it from 70% to 90%, making Colombia lose competitiveness and attractiveness as an investment destination”.
The Hydrocarbons International Forum ‘Perspectives and value of companies in the sector’, organized by the School of Advanced Management Studies (Cesa) with support from the University of Alberta’s School of Business, will be held in Bogota on February 20. The forum will discuss investment opportunities in the mining and energy sector, access to capital markets for companies in Colombia and the valuation of oil companies in the global arena.
Business newspaper Portafolio reported that Paula Acosta, deputy director of National Planning Department (DNP), said the National Royalties Fund has 1,000 pending projects amounting to US$727B, even though after the royalties reform Legislative Act was issued, the government decided to liquidate it next December. (This is the fund for the old distribution scheme.)
Business magazine Dinero reports that Ecopetrol agreed to finance in pesos US$1B of its US$2B investment budget for this year, after the government recently requested the company to finance its operations in local currency instead of dollars (as we reported). The announcement was made by Minminas Mauricio Cardenas, who said that the projects will be funded: “The vast majority, over 50%, hopefully more than 60%, will be in local currency.”
An Argentinian Justice ratified the foreclosure of US$19B against Chevron for causing environmental damage in Ecuador’s Amazon. The plaintiffs’ lawyer, Pablo Fajardo, said that Chevron “has to pay or deposit (in a bank account in favor of the plaintiffs), each month, 40% of all its revenues in Argentina”. The plaintiffs claim to have been victims of contamination caused by Texaco, later acquired by Chevron, between 1964 and 1990.
The Ecuadorian state-owned oil company is in Bogotá looking for partners to develop three blocks in that country from the Southeast Round. Canacol is one Colombian-focused oil and gas company that has property in the country. Now Petroamazonas wants more. From a Ecuadorian government news agency report, translated and with commentary by Hydrocarbons Colombia.
National business newspaper Portafolio reports that the State Council (a superior court that decides on government-related cases) ruled in favor of Ecopetrol in a lawsuit in which 56 individuals sued the company for US$239M claiming ownership of the Cuisiana and Cupiagua fields subsoil. Ecopetrol provisioned the money in the mid-nineties while resolving the lawsuit, so now, after the ruling, it will be returned to the company and will be used on investments.
The government and the Central Bank agreed to take measures in order to curb the appreciation of the peso, which was revalued by over 10% in 2012 and in 2013 has depreciated by 0.62%. MinHacienda Mauricio Cardenas announced that besides a 0.25 basis points cut in the interest rate, the government will implement three measures for raising the exchange rate value by 8%.
Paula Acosta, deputy director of the National Planning Department (DNP), spoke to Portafolio.co about the strengths and weaknesses of the royalty system. Acosta said: “The system is running. The leaders already know how it works. It probably does not yet have the desired regional effect, but that is a consequence of a new process. The goal that the eight departments come together to make a great project still has not arrived. It’s something we have to build. Another gain is that there are many projects ready to present in 2013 and 2014. In general, the fundamental change is that everyone is moving based on projects and spending quality.”
Portafolio.co reports that, according to a study by Central Bank, despite the last 20 years’ worth of investment, exploration and successful drilling, it has not been possible to find oil fields with reserves as large as those of the Cupiagua (Casanare), Cusiana (Llanos) or Caño Limón (Arauca).
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