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.
Chilean operator with participation from Korean industrial giant LG has published its first set of annual results after purchasing Winchester Luna and Hupecol in early 2012. From a corporate perspective all of its absolute indicators are up significantly because of success in Chile and the acquisition of significant production in Colombia. However, as the graph shows, EBITDA margins in Colombia are poorer than the Colombian average (which was pulled down by poor results at Canacol) and much poorer than the company’s operations in Chile.
The second day of a two-day conference can be light on content, but a session on infrastructure at the CWC Oil and Gas Summit and Exhibition in Cartagena provided useful updates on Puerto Bahia, the Bicentennial Pipeline, the proposed Pacific Pipeline and other projects. Since most commentators put infrastructure high in the list of current challenges for the Colombian industry, the session was timely.
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 wrote a few weeks ago that ‘Debt is the new black’ about how Colombian oil and gas companies were using debt rather than equity. At the CWC Oil and Gas Summitt and Exhibition in Cartagena recently, Scotiabank’s Rolf Schmitz gave a good explanation of why there is a strong interest in M&A in Colombia but that companies are using debt rather than equity to finance their activities.
Pacific Rubiales always says it has no labor relations issues but the USO continues to publish reports that it does. This week it is workers fired in the mid-2011 protests so technically they do not represent PRE labor. A second article about qualified technicians saying that Pacific will not hire them smells like the same story printed twice: PRE will not hire them because the company already fired them once. The USO – making common cause with the ELN and probably the Farc as well – is heating up the debate on kicking out multinational oil companies. Root cause is probably that they find Ecopetrol more pliant.
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