ACP as a source of information
Source: El Espectador – National
Date: March 16
Headline: Raw uncertainty
The outlook in the national industry is uncertain as long as the conflicts between Saudi Arabia and Russia over crude pricing are not resolved. Before production, the first victim in this conflict could be the exploratory programs being carried out in the country. (…) However, the Colombian oil company would have to rethink the investment that it sealed last year with Oxy in the United States for fracking. (…) The Canadian oil company Frontera Energy Corp has 15 contracts, Parex Resources Colombia Ltd has 10; Gran Tierra Colombia Inc appears with 6 and Cepsa Colombia S.A. reports 5 contracts. Other companies, such as Petrobras de Valores Internacional De España and Ongc Videsh Limited, have an active contractual relationship in the country. According to Francisco José Lloreda, president of the Colombian Petroleum Association (ACP), if a situation of low prices persists, companies will have to analyze the profitability of each project, “some may end up reviewing their investment programs and, of course, that would have impacts on the expectations of exploration and production in the country and on the contracting of goods and services.”. Responded in: elespectador.com (March 15)
Source: El Tiempo – National
Date: March 15
Headline: The dimension of the effects in Colombia
The planes were already starting to be empty at takeoff. To avoid losses, Avianca and Latam, two of the airlines operating domestic flights in the country, decided to reduce their flights by between 30 and 40 percent. (…) These are some of the pieces of the landscape that emerged during this week in Colombia, after becoming part of the countries affected by the pandemic, which coincided with a turbulent movement in the international environment, caused by a price war in oil that began with soft attacks between the major crude-producing powers (Saudi Arabia and Russia), but intensified this week and led to the price per barrel being set at $33.85 (Friday), a drop of 34 percent in the last 10 days. (…) Francisco Lloreda, president of the Colombian Petroleum Association (ACP), corroborates the effect of the low price on public income. “For every dollar that falls on average per year in the price of oil, the country stops receiving between 350 and 400 billion.”. Responded in:eltiempo.com (March 14), miradas.co (March 15),
Source: El País – Regional
Author: Francisco José Lloreda Mera
Date: March 15
Headline: The balance beam
One November afternoon, 13-year-old William Troeller hanged himself. The boy had seen his family progressively sink into despair. His father had lost his job, seven months ago they cut off the gas for non-payment, and he felt uncomfortable asking for his daily food ration while seeing his other five siblings hungry. This is one of the many cases recalled by Amity Shlaes in her book ‘The Forgotten Man.’ Those who are still alive must be a hundred years old and were children during the Great Depression. When the global economy crashed after the stock market collapse in New York, causing a widespread and devastating paralysis of most economic sectors, in cities and in the countryside. A crisis that mutated into human drama: in massive unemployment, poverty, illness, and deep hopelessness.published in: elpais.com.co (March 15).
Source: vanguardia.com – Regional
Date: March 15
Headline: Video: The Magdalena Medio, the epicenter of «fracking» in Colombia
“Fifty oil wells are not worth an ecosystem,” challenges social leader Javier Vega under the shade of a tree, the only refuge from the 40 degrees that heat the small town of Puerto Patiño, in the Colombian Magdalena Medio valley. Puerto Patiño - which faces the Doña María swamp on the Magdalena River, Colombia's main river artery - is a candidate for a “fracking” project to extract oil less than a kilometer from the town center. (…) He fears that the project that Canadian oil company ConocoPhillips plans in the area will dry up the Doña María swamp, from which the fishing village has been feeding for over fifty years and is vital for its traditions. (…) “If its potential is validated, the four pilot fracking projects currently on the table could mean an additional 450,000 barrels of oil per day for the country and oil and gas reserves for more than 25 years,” explains Francisco José Lloreda, president of the Colombian Petroleum Association, to Efe. Responded in: cronicadelquindio.com (March 15),cablenoticias.tv (March 15), 1lockers.net (March 15), eje21.com.co (March 16), elinformador.com.co (March 15).
Source: confidencialcolombia.com – National
Date: March 15
Headline: How to understand pilot projects for fracking in Colombia
In the first week of March, the decree was issued that gives the green light to the Comprehensive Research Pilot Projects -PPI/ on Unconventional Reservoirs - YNC, associated with hydraulic fracturing or fracking processes. The detailed institutional process that will need to be developed going forward raises questions about its execution horizon and the risks and opportunities for the country from its outcome. (…) Likewise, IDEAM and the Colombian Geological Service must define the baseline lines for surface waters and seismicity, the Ministry of the Interior for social aspects, and the Ministry of Mines must determine the period during which the reservoir sizing must be carried out to proceed with the evaluation. The Colombian Petroleum Association indicates that the PPII will involve investments of approximately US$ 650 million, making it important that conditions exist for their implementation.
GREMIO
Source: El Tiempo
Date: March 16
Headline: The accounts change
Only ten days have passed since the first case of coronavirus (causing the covid-19 disease) was confirmed in Colombia. The total number of cases had already risen to 45 in the country by this Sunday, while the Government has taken more than twenty measures in sectors such as education, migration, public health, working from home, sectoral aid, among others. (…) The harsh shock in the oil market will have an impact not only on Ecopetrol's plans, the largest company in Colombia, but also on public finances, which are highly dependent on these revenues, as well as on the royalties of the regions. For every dollar that the price of the barrel drops, on average, the country stops receiving between 350,000 and 400,000 million pesos per year.
Source: El Tiempo
Date: March 16
Headline: Why are environmental leaders murdered in Colombia?
In December 2019, following the Global Witness report on 24 environmental leaders murdered in Colombia that year, President Iván Duque announced the signing of the Escazú Agreement, which seeks to protect them. (…) Their dispute has been against what they consider a “lack of rigor” from the National Environmental Licensing Authority (ANLA) in controlling the exploitation carried out by Ecopetrol in the Lorito 1 project. This was vacated by the company following community actions. However, in December 2018, just a few meters from the first project, a second platform was built. ANLA indicated that in 2013 the extracting company was required to take preventive, mitigation, and control measures to avoid affecting the nearby river and the aqueduct. Later, relocation was chosen, a project that, according to them, is “suspended.” Ecopetrol claims that the well is in the exploratory phase and denies any type of contamination associated with the project “that affects the environment or water sources.”.
Source: El Tiempo
Date: March 16
Headline: Ecopetrol, R.I.P.? By: Gabriel Silva Luján
The last time someone dared to suggest that it was time to review the strategic role of Ecopetrol and the convenience of its current ownership structure, they nearly crushed the character. Former Minister Jorge Humberto Botero, when proposing a couple of years ago the sale of said company, was actually trying to open a highly relevant debate about the role of Ecopetrol in the fiscal structure and energy policy of the country. That debate, which at that time ‘did not catch on,’ has now become unavoidable. (…) Ecopetrol has managed to survive essentially because other producing countries have assumed the cost of controlling the excess supply, which has become unavoidable, permanent, and structural in the global hydrocarbons market. This reality was clearly exemplified, once again, with the new price war unleashed by Saudi Arabia when it opened the taps of its practically infinite crude oil production.
Source: La República
Date: March 16
Headline: Importation of ethanol from the U.S. put Bioenergy S.A. in jeopardy.
For several years, local ethanol producers have made various requests to the Government to apply compensatory measures to the biofuel imported from the United States. The price difference makes the industry uncompetitive and companies have decreased their sales. The first affected by the situation was Bionergy, a subsidiary of Ecopetrol, which was admitted by the Superintendence of Companies to start a reorganization process. (…) According to Jorge Bendeck, president of Fedebiocombustibles, Bioenergy's bankruptcy “was foreseeable” and the current situation of the ethanol industry will “cause all companies to enter a crisis at some point.” According to federation figures, the fuel alcohol market in Colombia, during 2019, represented a total of approximately 726 million liters sold, between national and imported ethanol, of which 449 million liters were of national origin and 277 million liters came from the United States.
Source: La República
Date: March 16
Headline: The measures of 30 companies to face the crisis generated by the virus.
With the arrival of Covid-19, the National Government, led by the Ministry of Health, has taken charge of the situation to prevent the disease from continuing to spread. However, from the private sector, many companies have also done their part to contain the situation. (…) Regarding the state oil company, Ecopetrol, it was decided to train all workers, contractors, and families, and special protocols were established for workers in ports, while Enel created a local committee responsible for coordinating prevention measures and responses and suspended international travel.
Source: Portafolio
Date: March 16
Headline: Oil companies are already planning to reduce investments in Latin America.
The sharp drop in crude oil prices recorded last week makes it more difficult for many high-cost producers to compete with the low prices being offered by Saudi Arabia and other countries. A handful of independent oil and gas producers operating in Latin America plan to reduce investments as the industry wobbles due to falling crude prices and investors sell bonds out of doubts about how much longer companies can make profits. (…) Parex Resources Inc., a Calgary-based company that produces oil in Colombia, highlighted that it would reduce capital spending to an approximate range between US$160 million and US$175 million this year if oil remains between US$30 and US$40 per barrel, according to a statement issued recently. It is worth noting that it made investments of US$208 million last year. Frontera Energy did not respond to messages seeking comments.
Source: Portafolio
Date: March 16
Headline: The rise of the dollar would drive up natural gas rates in the country.
Due to the sharp rise in the dollar's exchange rate recorded in recent days, consumers will end up paying the price, as the value of their bill for natural gas service would increase. The reason is that, both in the first link of the production chain in the gas fields of the national territory and in imported natural gas, their costs are traded or calculated based on the price of the dollar, which is currently around $4,000, which would lead to a possible spike in the receipt for this fuel. (…) For his part, Jorge Linero, president of Gas de Canacol Energy, stated that the import of gas represents an estimated increase in natural gas prices of 80% for the consumer.
Source: El Nuevo Siglo
Date: March 16
Headline: Off the record. Sell 8.5% of Ecopetrol?
For some union leaders, the fiscal problems that this year will bring the economic backlash of the coronavirus pandemic should lead the Government to rule out the possibility of incurring more public debt, especially by resorting to the credit line approved by the International Monetary Fund (IMF, currently led by Kristalina Georgieva). On the contrary, they believe that the most viable alternative to fund state coffers and avoid an excessive increase in the fiscal deficit would be to sell 8.5% of the shares of Ecopetrol that it is authorized to divest, which could mean for the Nation an income of no less than 15 trillion pesos.
Source: El Meridiano de Sucre
Date: March 16
Headline: Who will be right? By: Ismael Guerra de la Ossa
A study by the General Comptroller of the Republic (CGR) on the prospects of the country's gas sector, in the short and medium term, has generated a controversy involving organizations related to this hydrocarbon. (…) The study also notes that Cusiana, thanks to operational developments, has compensated somewhat. It adds that weaknesses are evident in the control exercised by Minminas over affiliated entities such as UPME, ANH, and CREG, as information is managed that is not processed in a timely manner and shared, to achieve a specific objective. (…) Naturgas states that «in addition to counting production declarations, it sums the proven and probable reserves that, apparently, the Comptroller does not take into account. The quantities of natural gas from Canacol (100 million cubic feet starting December 2022) and Orca (80 million cubic feet starting January 2024) are also not included in the study.».
Topics
Source: El Espectador
Date: March 16
Headline: A double crisis. By: Salomón Kalmanovitz
The global economy faces two enormous challenges at the same time: a pandemic that can only be confronted by locking down the population of each country for a reasonable time, during which a lot of wealth generation is lost while extreme therapeutic measures are taken, and the breakdown of the quota agreement of the Organization of the Petroleum Exporting Countries that has already hit us. (…) The struggle between Saudi Arabia and Russia for greater market share and Putin's aim to kneel American producers who invented the costly fracking process disrupted a precarious market balance and precipitated prices from levels of US$65 per barrel to around USS30 currently. It is said that U.S. oil requires a higher price of US$45 to cover its production costs.
Source: El Espectador
Date: March 16
Headline: On fracking and its pilots in Colombia
Regarding the pilot tests of fracking being conducted in compliance with the environmental precautionary principle, which obliges the administration, when there is no evidence ruling out the possibility of environmental damage from human activity, to conduct research that ensures certainty of safety —with reasonableness, proportionality, and weighting—. The research on the possible effects of hydraulic fracturing technology opens a participation mechanism that is guaranteed in a timely provision to interested parties of information about the progress and results of the experiment. This activity should be impartial, that is, carried out directly by the administration. However, the pilots that will support the definition of fracking in Colombia will be conducted by an interested party, which may skew the study and detract from its legitimacy.
Source: La República
Date: March 16
Headline: Analysts foresee that the dollar will remain above $3,900 this week
Last week, the price of the dollar in Colombia surpassed the level of $4,000 for the first time and, despite its reduction of $92.24 during this Friday, the Representative Market Rate for this Monday stands at $3,942. (…) The expert added that this situation, combined with the sharp drop in oil prices to levels of US$32 and US$35, caused widespread selling in global markets with significant devaluations in stocks and a major depreciation of emerging currencies, especially in the Colombian peso, with -4.73% just in the last week and -18.22% so far in 2020, a figure that placed it as the most devalued in Latin America.
Source: La República
Date: March 16
Headline: There will be growth after the Covid-19 effect
No one can deny that the global economy will not be the same as before when the ravages of Covid-19 begin to fade, perhaps entering the end of the year. The losses in stock prices in various stock exchanges will be very difficult to recover, just like the frantic devaluation of emerging currencies that will leave the pesos anchored at unforeseen rates. And regarding oil, it will be a miracle if this year the WTI and Brent barrels reach prices close to the US$70 that they recently touched.
Source: La República
Date: March 16
Headline: Preventing without stopping. By: María Claudia Lacouture
We are in a complex moment due to the pandemic, at the right time to take safe measures to prevent the spread of the coronavirus and avoid halting the productive apparatus. On one hand, reinforce prevention actions; on the other, focus strategies to replace Chinese supply and recover lost clients. (…) The pandemic came accompanied by a drastic drop in oil prices and a strong devaluation that complicates the productivity of various industries. The public deficit, debt, and generally the State's accounts will be affected, while the nervousness of investors leads them to seek refuge in safer assets like gold, dollar, and bonds, devaluing emerging markets.
Source: Portafolio
Date: March 16
Headline: The U.S. will take advantage of crude prices to fill reserves
The President of the U.S., Donald Trump, said on Friday that the government will buy oil taking advantage of low prices to bring the country's strategic reserves to their maximum, as a precautionary measure against the coronavirus pandemic. Crude prices fell around 25% this week, in a market with low demand and subjected to a price war between Saudi Arabia and Russia. «We will buy, at a very good price, large quantities of oil» intended for the strategic reserves, Trump said at the White House. «We will fill them to the top,» he added.
Source: Portafolio
Date: March 16
Headline: The start of the year was good
Some economic indicators published last week revealed that the year 2020 started with dynamism. The Dian reported a 12.8 percent increase in revenue for January and February reaching 29.6 trillion pesos. (…) However, the double impact of the arrival of the coronavirus pandemic in Colombia, along with the drop in oil prices and the surge of the dollar will generate an impact that will be felt in the upcoming measurements of statistical organizations. The total magnitude of those effects of Covid-19 on trade, industry, taxes, hotels, and employment is still too early to determine accurately.
Source: Portafolio
Date: March 16
Headline: Exports with the dollar at $4.000. By. Mauricio Cabrera Galvis
Will there be an export boom with the dollar above $4.000? Will new exports incentivized by devaluation compensate for the drop in oil revenues? These are relevant questions to understand how serious the balance of payments crisis can be with the collapse of oil prices. (…) After the devaluation of 2014, with the past oil shock, none of those three conditions were met and that is why agricultural exports have stagnated around US$7.300 million, and industrial product exports fell from US$9.400 to 8.300 million.
Source: El Nuevo Siglo
Date: March 16
Headline: Remembering Camus. By. José Félix Lafaurie Rivera
I dusted off my copy of “The Plague” and reviewed my old underlinings, like a snapshot of my youthful concerns. And I did it because today, in the face of the pandemic that frightens the planet and the petty struggle for world hegemony, which terrifies it with the collapse of oil prices, the rise of the dollar, the sharp fall of stock markets, and poverty, as if the fears of illness and death were not enough, Camus's work has a double and pertinent reading. (…) Putin's arrogance and his nostalgia for the expanded power of the U.S.S.R., which led him to annex Crimea in 2014, reappears today with the breaking of the pact with OPEC to reduce production and sustain oil prices. The drop in demand due to Covid-19 is compounded by the oversupply from the surge in U.S. production, of almost 90%, thanks to the effective but “costly” fracking. And in that “cost” lies Putin's bet in his struggle for world hegemony tied to oil.
Institutional
Source: El Tiempo
Date: March 16
Headline: Why do fracking pilots still lack social license?
While the Government and some experts agree on the need to carry out comprehensive research pilot projects (PPII) to have scientific information on the impact of fracking in Colombia, in the village of Planta Nueva, in the district of El Centro, in Barrancabermeja, María Jaramillo refuses to let her community be the epicenter of an experiment. (…) In a tour that EL TIEMPO made through some villages and municipalities of the middle Magdalena valley in the departments of Cesar, Antioquia, and Santander, many communities that have lived off the promise of oil oppose seeing their regions as an oil pantry. They also distrust the pilot projects of fracking that, according to the Ministry of Mines and Energy, would be carried out in this region.
Colombian Association of Oil and Gas