News and AnalysIs for

MinMinas Federico Renjifo chose a neutral audience to make his first major policy statement of the year. The ANDI is the country’s major businessperson’s association and while there may have been members of the oil services industry in the audience we doubt there were many oil and gas company CEOs. He thus picked an audience that was not going to fight back if he said something that veered too far from the actual situation. From a MinMinas press release, translated and with commentary by Hydrocarbons Colombia.

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”.

Minority shareholders of Ecopetrol proposed Roberto Steiner Sampedro as an independent member of the company’s board. Steiner will be included for the position in the ninth row of the sheet that the Ministry of Finance will submit to the General Assembly of Shareholders. To this end, the minority shareholders submitted a “Shareholders’ Agreement” signed by representatives of seven pension funds.

Interoil has been telling the market they are getting out of Colombia for several months now. Yesterday they announced the sale of their exploration assets to Trayectoria Oil and Gas. Interoil says they received US$2M in cash for its working interest in the Altair and COR-6 blocks and avoided US$26M in exploration costs. The transaction is subject to approval by creditors and the ANH. Their working interest in the producing block LLA-47 is still on the market.

Radio Nacional de Colombia reports that according to the Colombian Petroleum Association (ACP), foreign investment will decline despite the country’s reserves increasing this year. Oil industry representatives said that “with the drilling of 135 new wells, the oil industry hopes to increase hydrocarbon reserves, currently estimated at 2,200 million barrels,” adding that “findings such as those achieved by Canacol in January 2012, in the Magdalena River middle valley with a daily production of 1,242 barrels per day, reinforces the official forecasts that the country could reach 41,000 million barrels in 2030.”

Gran Tierra recently issued a press release on its reserves for year-end 2012. The good news is that the company’s Colombian oil reserves 2P (Proved and Probable) are up 34% over 2011. Proved (P1) reserves are up 22% and Probable (P2) are up 85%. The bad news is that Colombian 2P gas reserves are down 64% although Proved gas reserves are only down 35%. Gas now represents only 5% of the company’s Colombian 2P reserves. Argentina gas reserves have also declined but the growth in oil in Colombia, Argentina and Brazil is sufficient to push 1P reserves up 20% and 2P reserves 15% on a total company basis. The official long-form filing may not appear until the end of this month and the company gave no explanation of the decline in gas reserves in its press release.