IOX- Towards consensus in Colombia
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"A panel discussion at the recent Campetrol Expo Oil & Gas 2017 entitled “Viable environments for sustainable petroleum development” showed more agreement than controversy, and even the moderator was dissapointed.
Social conflict
The Colombian Association of Petroleum (ACP) president, Francisco Lloreda, started his comments on the issue by paraphrasing remarks by fellow panel members, Ecopetrol’s Eduardo Uribe and even Vice Minister Botero: economics is the cause of the discontent; the environment is merely the excuse.
Political consultant León Valencia did not disagree with the assertion, although he did put a somewhat different slant on it. His company had been hired by an extractive industry company to take the pulse of Colombia’s rural areas and report back on the causes of anti-industry discontent. He and his team spent a year working on the study.
Root cause is definitely the lack of infrastructure – both economic and social, combined with a weak State presence overall.
In short, he said, “Referendums are a symptom of a deeper problem: trying to be heard.”
For this reason, Valencia disagreed with Lloreda’s implied (but not, in fact, stated) recommendation that referendums had to be controlled or even done away with.
Lloreda wondered how the economic benefits of the extractive industry, which accrue to all Colombians, can be denied by a few thousand voters in a small community, voters which have been misinformed if not lied to about the real environmental impacts.
Although he did not explicitly say this, the implication was that referendums should be stopped or at the very least be made non-binding.
As the time-bell rang to end the session, it was Ecopetrol’s Eduardo Uribe who had the last word. He said the industry “was not going to win this issue in the Courts or in the Congress”. “We need to convince the people that they are better off with the industry than without it.”
The petroleum engineer’s association, Acipet, has been the most active in using legal means to block referendums. Association president, Julio César Vera would probably agree with Lloreda’s above argument and said (in a press release) that the extractive industries represent 24% of the national power generation capacity, “Such a structure could be put at risk when a group of citizens in a town submits a request to promote a popular consultation that has no technical arguments,” referring to the Resolution that recognizes a local citizen as the promoter of a Popular Consultation in Hato Corozal (Casanare).
Presidential candidate Juan Carlos Pinzón said that communities are upset mainly due to changes to the General System of Royalties (SGR), because they are not seeing benefits of oil projects in their territories.
He said that producing regions should receive between 45% and 55% of royalties.
Joaquín Montealegre, Technical Leader of the Sector at the National Authority of Environmental Licenses (ANLA) said that compensation requires creativity and needs to be in line with communities’ needs, adding that so far proposals presented by companies have been traditional, “which is fine, but it has not been a sufficient focus.”
The Inter-American Development Bank (IDB) also made recommendations on social issues and said that communication channels between the Government, companies and civil society will be a key element to allow the sustainable and profitable development of industry projects, as long as Colombians understand that natural resources are public goods that generate value for all citizens.
The government has chosen to pay attention popular consultations and has changed its strategy to deal with them, or at least that is what it looks like.
Just like Granada (Meta), inhabitants of La Macarena were not able to vote because the State said it did not have enough resources to finance the referendum. This time, however, locals complained about the fact that the State had resources to finance the consultation of the Liberal Party but not theirs. (The Conservative and Centro Democratico parties had committed to participate in the consultation but pulled out at the last minute making both the government and the Liberals look bad. There was strong criticism from the press and public for the waste of public funds.)
After the statements of MinMinas Cardenas on Cenit, USO initiated blockades in different strategic points of Meta and Casanare.
Ecopetrol’s facilities like Mi Llanura, Apiay, Chichimene and Rubiales were some of the most affected. By last Friday, the blockades had been lifted.
Production
Industry experts agree on the fact that the sector is recovering from the oil crisis.
For Acipet’s Julio Cesar Vera, the sector will manage to drill 50 wells and maintain production above 850mbd.
According to Campetrol’s Germán Espinosa, the sector is "in stable equilibrium," even though the market remains volatile.
Exploration
Anadarko’s (NYSE:APC) president in Colombia, Alberto Gamboa said that offshore projects have challenges like the lack of capital to invest in the technology needed to operate in the Caribbean, which is a challenge in-and-of-itself because climatic conditions are not the best and the weather is constantly changing.
Industry expert Luis Pacheco warned that handling royalties’ resources in the Caribbean was going to be different that in the rest of the country, because this region is made up of established cities like Santa Marta, Barranquilla and Cartagena, and their social power is not really focused on the communities but on their well positioned, powerful political class, which are eagerly waiting this capital.
The industry knows that Colombia needs to boost its E&P projects, and it is impossible not to mention fracking when talking about exploration.
Ecopetrol’s CEO Felipe Bayón insisted on the development of the NOC’s pilot project and said that it is necessary to create synergies between the government and rural areas to develop unconventional projects (UC) in the country, because they are one of the strategies to expand Colombia’s energy self-sufficiency. He did say that UC requires high standards of social and environmental responsibility.
Bayón added that the NOC will make investments of between US$3.5M and US$4M during 2018; an increase of between 35% and 55% compared to investments made this year, and said that “85% of the NOC’s resources will go to E&P activities, representing an increase of more than US$1B compared to this year's investment.”
Gas
Promigas’ Vice President of Distribution, Rodolfo Anaya, highlighted the company's activities in Latin America, especially in Peru, where it invested around US$250M to supply gas to more than 150,000 households.
He stressed that Promigas' strategy is to increase gas consumption in Peru, while analyzing markets like Chile and Mexico.
Also, during the First Meeting of Liquefied Petroleum Gas (LPG) in Colombia, organized by Agremgas, members of the sector said that the ‘Gas for the Post-conflict’ project will bring the fuel to rural areas that were affected by the armed conflict and allow the replacement of diesel with propane in electrical generation.
Other news
EITI wants to strengthen the implementation of its ethics standard in Latin America and sees Colombia as a role model for other counties of the region. Coincidentally, this week the Attorney General's Office charged Ecopetrol's project coordinator, Augusto Villamizar, for alleged irregularities in the awarding of a contract.
The Superintendence of Industry and Commerce (SIC) did not allow Terpel to keep ExxonMobil's gas stations.
"
"A panel discussion at the recent Campetrol Expo Oil & Gas 2017 entitled “Viable environments for sustainable petroleum development” showed more agreement than controversy, and even the moderator was dissapointed.
Social conflict
The Colombian Association of Petroleum (ACP) president, Francisco Lloreda, started his comments on the issue by paraphrasing remarks by fellow panel members, Ecopetrol’s Eduardo Uribe and even Vice Minister Botero: economics is the cause of the discontent; the environment is merely the excuse.
Political consultant León Valencia did not disagree with the assertion, although he did put a somewhat different slant on it. His company had been hired by an extractive industry company to take the pulse of Colombia’s rural areas and report back on the causes of anti-industry discontent. He and his team spent a year working on the study.
Root cause is definitely the lack of infrastructure – both economic and social, combined with a weak State presence overall.
In short, he said, “Referendums are a symptom of a deeper problem: trying to be heard.”
For this reason, Valencia disagreed with Lloreda’s implied (but not, in fact, stated) recommendation that referendums had to be controlled or even done away with.
Lloreda wondered how the economic benefits of the extractive industry, which accrue to all Colombians, can be denied by a few thousand voters in a small community, voters which have been misinformed if not lied to about the real environmental impacts.
Although he did not explicitly say this, the implication was that referendums should be stopped or at the very least be made non-binding.
As the time-bell rang to end the session, it was Ecopetrol’s Eduardo Uribe who had the last word. He said the industry “was not going to win this issue in the Courts or in the Congress”. “We need to convince the people that they are better off with the industry than without it.”
The petroleum engineer’s association, Acipet, has been the most active in using legal means to block referendums. Association president, Julio César Vera would probably agree with Lloreda’s above argument and said (in a press release) that the extractive industries represent 24% of the national power generation capacity, “Such a structure could be put at risk when a group of citizens in a town submits a request to promote a popular consultation that has no technical arguments,” referring to the Resolution that recognizes a local citizen as the promoter of a Popular Consultation in Hato Corozal (Casanare).
Presidential candidate Juan Carlos Pinzón said that communities are upset mainly due to changes to the General System of Royalties (SGR), because they are not seeing benefits of oil projects in their territories.
He said that producing regions should receive between 45% and 55% of royalties.
Joaquín Montealegre, Technical Leader of the Sector at the National Authority of Environmental Licenses (ANLA) said that compensation requires creativity and needs to be in line with communities’ needs, adding that so far proposals presented by companies have been traditional, “which is fine, but it has not been a sufficient focus.”
The Inter-American Development Bank (IDB) also made recommendations on social issues and said that communication channels between the Government, companies and civil society will be a key element to allow the sustainable and profitable development of industry projects, as long as Colombians understand that natural resources are public goods that generate value for all citizens.
The government has chosen to pay attention popular consultations and has changed its strategy to deal with them, or at least that is what it looks like.
Just like Granada (Meta), inhabitants of La Macarena were not able to vote because the State said it did not have enough resources to finance the referendum. This time, however, locals complained about the fact that the State had resources to finance the consultation of the Liberal Party but not theirs. (The Conservative and Centro Democratico parties had committed to participate in the consultation but pulled out at the last minute making both the government and the Liberals look bad. There was strong criticism from the press and public for the waste of public funds.)
After the statements of MinMinas Cardenas on Cenit, USO initiated blockades in different strategic points of Meta and Casanare.
Ecopetrol’s facilities like Mi Llanura, Apiay, Chichimene and Rubiales were some of the most affected. By last Friday, the blockades had been lifted.
Production
Industry experts agree on the fact that the sector is recovering from the oil crisis.
For Acipet’s Julio Cesar Vera, the sector will manage to drill 50 wells and maintain production above 850mbd.
According to Campetrol’s Germán Espinosa, the sector is "in stable equilibrium," even though the market remains volatile.
Exploration
Anadarko’s (NYSE:APC) president in Colombia, Alberto Gamboa said that offshore projects have challenges like the lack of capital to invest in the technology needed to operate in the Caribbean, which is a challenge in-and-of-itself because climatic conditions are not the best and the weather is constantly changing.
Industry expert Luis Pacheco warned that handling royalties’ resources in the Caribbean was going to be different that in the rest of the country, because this region is made up of established cities like Santa Marta, Barranquilla and Cartagena, and their social power is not really focused on the communities but on their well positioned, powerful political class, which are eagerly waiting this capital.
The industry knows that Colombia needs to boost its E&P projects, and it is impossible not to mention fracking when talking about exploration.
Ecopetrol’s CEO Felipe Bayón insisted on the development of the NOC’s pilot project and said that it is necessary to create synergies between the government and rural areas to develop unconventional projects (UC) in the country, because they are one of the strategies to expand Colombia’s energy self-sufficiency. He did say that UC requires high standards of social and environmental responsibility.
Bayón added that the NOC will make investments of between US$3.5M and US$4M during 2018; an increase of between 35% and 55% compared to investments made this year, and said that “85% of the NOC’s resources will go to E&P activities, representing an increase of more than US$1B compared to this year's investment.”
Gas
Promigas’ Vice President of Distribution, Rodolfo Anaya, highlighted the company's activities in Latin America, especially in Peru, where it invested around US$250M to supply gas to more than 150,000 households.
He stressed that Promigas' strategy is to increase gas consumption in Peru, while analyzing markets like Chile and Mexico.
Also, during the First Meeting of Liquefied Petroleum Gas (LPG) in Colombia, organized by Agremgas, members of the sector said that the ‘Gas for the Post-conflict’ project will bring the fuel to rural areas that were affected by the armed conflict and allow the replacement of diesel with propane in electrical generation.
Other news
EITI wants to strengthen the implementation of its ethics standard in Latin America and sees Colombia as a role model for other counties of the region. Coincidentally, this week the Attorney General's Office charged Ecopetrol's project coordinator, Augusto Villamizar, for alleged irregularities in the awarding of a contract.
The Superintendence of Industry and Commerce (SIC) did not allow Terpel to keep ExxonMobil's gas stations.
"