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.
EnvironmentA congressman from Boyacá wants hydrocarbons E&P contracts in the Boyacá province of Sugamuxi to be revoked and he has requested a debate in the lower house to achieve it.
As reported by Dinero, the company Cenit, a subsidiary of Ecopetrol, began operations last week. Cenit, specialized in oil transportation and storage, starts as the second largest company in the country, with US$7.7B in assets. “Cenit is the missing piece in the industry to strategically meet increasing hydrocarbon production in the country. We are the link the sector needed to solve the bottleneck in crude transport and for operational excellence in the service” said Camilo Marulanda, president of Cenit.
Last week the USO was picking on Pacific Rubiales and this week the focus was Ecopetrol. The first item highlights a problem we have heard in other contexts: that Ecopetrol has been extending times for paying contractors. In the particular case here, the contractor decided not to pay their workers and the USO questions why they got the contract if they did not have sufficient liquidity to deal with Ecopetrol’s payment terms
Counts were down to 30 which is 20% below recent and long term averages. Our 4-week Moving Average incident count was down 8% to 33.6 incidents but the 52 week average held steady at 36.6.
The Comptroller General (like an Auditor General) says that MinMinas, Ecopetrol and the National Hydrocarbons Agency (ANH) should be monitoring Pacific Rubiales production processes in fields that will eventually revert to Ecopetrol. The report contends that practices designed to optimize short-term extraction could damage the deposits to such an extent that future production will be adversely affected. From a Controlaria press release, translated and with commentary by Hydrocarbons Colombia.
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