Gran Tierra announced its capital expenditures (CAPEX) Budget for 2013 will be US$363M of which US$295M will be spent on drilling and seismic activities. Colombia will receive US$224M or 62% of the total. The company will spend US$67M on Brazil but may spend more if initial onshore exploration results prove positive. Its production guidance for 2013 is 20,000bd net of working interest and royalties, which would be about 33% more than 3Q12.
Pacific Rubiales published an operational report full of interesting information but the real jaw-dropper was the growth in the venerable Rubiales field since receiving National Environmental Licensing Agency (ANLA) permission on August 8th to increase water injection. The field had produced (gross before royalties and working interest) 169mbd in July and that was the third month in a row that production had dropped. Production was only slightly better in August at 170mbd. But since then Rubiales’ field production has grown at 4% per month and the company says it is currently “in excess of 200 mbd” – 30mbpd higher than in July.
The main story this week is the assassination of Milton Enrique Rivas, a union leader in Termotécnica, a Cepsa subcontractor in Puerto Gaitan, Meta. The USO has been trying to widen the conflict to include both Ecopetrol and Pacific Rubiales to no avail. Local authorities and the company blame union member for Rivas’ murder which – whether true or not – only raises tensions. This unfortunate death will have wider implications since Colombia’s black mark is a high rate of assassinations of union leaders, which obviously gets the attention of international labor groups, NGOs and even the Democratic Party in the US:
Incidents were down considerably this week – everyone must be getting ready for the holiday. We calculate a 4-week moving average to smooth out weekly variations and although that rose significantly in the run-up to the first round of peace talks, it dropped almost as rapidly to settle at about 40 incidents per week. This value has held for the last five weeks and appears to be the “new normal”. There was a secondary peak just as this round of talks started and but since then counts have dropped for four straight weeks.
On Tuesday December 11 union leader Milton Enrique Rivas was killed in Puerto Gaitán (Meta). Rivas worked for Termotécnica, embroiled in a dispute with the Petroleum Workers Union (USO), and was killed a few meters from the company’s offices.
Message to SubscribersThe ANH and MinMinas have both had their final “rendering of accounts”. Congress is winding down and barely has enough energy to deal with tax reform which the government desperately wants to get done.