It apparently only dawned on President Juan Manuel Santos last week at the annual mayors’ meeting that the new royalty system had left some producer municipalities without funds. This is the fourth of four articles we have published this week as the government tries to solve in a matter of days, a problem that has built up over a year. From a DNP press release, translated and with commentary by Hydrocarbons Colombia.
As reported by Portafolio, the Comptroller General recovered US$4.1M from royalties through its audit program. The payment of this money was made by the insurer QBE, guarantor of the royalties in the departments of Meta and Casanare. According to the Comptroller, both departments made “risky fiduciary operations”, in which public money was put into a trust constituted by private individuals and got lost by not returning to the corresponding territorial public funds.
In an interview with El Espectador, MinMinas Federico Renjifo spoke about oil and environmental licenses, among other topics. Regarding oil production, Renjifo said: “This year we reached 1.014M barrels. This month we reached 1.027M barrels and we can reach 1.033M barrels. It has been a good indicator and the challenge is to maintain that production. We have increased reserves. Colombia requires a reserves increase.” He added that it is necessary to increase exploration, since there has not been a great discovery and current reserves are extracted from small wells.
President Juan Manuel Santos clearly got an earful last week at the annual meeting of the country’s mayors. This is the second major change to the now not-so-new royalty process within days. From a DNP press release, translated and with commentary by Hydrocarbons Colombia
The new royalties distribution system was designed to increase the chances that they were spent on projects that increased economic infrastructure and decrease the chances that they ended up in the pockets of a few well-connected crooks. The plan also intended to allow all regions to compete for funds, not just producer regions. But the process is slow and took too long to get going. Well-run municipalities suffered along with corrupt ones. Now the government is backing down and will look at more direct payments. From a President’s Office press release, translated and with commentary by Hydrocarbons Colombia.
Meta governor Alan Jara has been particularly critical of the new royalty system and for understandable reasons: as the largest producer department he had the most to lose from a centralized distribution system. Here MinMinas tries to show what Meta has received and also to show Jara’s personal involvement in the process. From a MinMinas press release, translated and with commentary by Hydrocarbons Colombia.
At a recent conference in Cartagena, MinMinas Renjifo gave a ‘state of the industry’ speech. We did not care much for what he said about policy (see several articles last week) but this MinMinas press release is part of a necessary campaign to remind Colombians of the benefits of a well-running energy and mining sector. Translated and with comments by Hydrocarbons Colombia.
As reported by Caracol Radio, Congress will discuss the lawsuit between Ecopetrol and Pacific Rubiales for Quifa field exploitation. According to Senator Jorge Enrique Robledo, Pacific cannot refuse to pay Ecopetrol 1.5M oil barrels (equivalent to US$382M), after the Colombian courts ruled in favor of Ecopetrol.
France’s EFE news agency interviewed Oscar Villadiego, board chairman of the Regional Association of Oil, Gas and Biofuels Industry in Latin America and the Caribbean (ARPEL). Villadiego said that Latin America and the Caribbean form a region “full of opportunities” to produce hydrocarbons, adding that “more space should be given to new technologies to better and more dynamically develop these resources.”
We have heard Orlando Cabrales give the speech so many times while he was president of the National Hydrocarbons Agency (ANH) that we could probably deliver the slides ourselves, perhaps even in our sleep. Now German Arce Zapata has taken over. He avoided the CWC Colombia Oil and Gas Summit and Exhibition in Cartagena, leaving that job to MinMinas Renjifo and went to Punta del Este in Uruguay to deliver, if not his maiden speech then one of this first presentations. We are just not sure we like the message. From an ANH press release, translated and with comments by Hydrocarbons Colombia
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