Late last week, the board of directors of Colombian state
oil company Ecopetrol met and decided
not to renew its contract with Canadian oil company Pacific Rubiales to operate
the Rubiales oil field. Rumors began to emerge late on Thursday, but by Friday,
both companies had released
statements confirming that the decision was mutual.
This was a difficult decision for Ecopetrol, one of the most
important that the board needed to make, but its hand was forced by the
plummeting price of oil. As Semana
pointed out, Ecopetrol at this point
has two options: running the field by itself or looking for a partner that it
could hire to run the operations of the field. The Rubiales field, which
produces approximately 160,000 barrels per day, is the largest oil field in
Colombia and accounts for 30% of Pacific Rubiales’ total production. Under the
current contract, which now will expire in 2016, Ecopetrol receives
60% of production and Pacific Rubiales receives 40%.
In other oil-related news, Colombian business journal Portafolio
published a piece on Friday detailing why Colombian oil costs so much to
produce. According to Portafolio, oil companies in Colombia pay an average of
$10 USD per barrel of oil they extract, whereas the regional average is just $7
USD for heavy crude. The article lays out exact what those $10 per barrel gets
spent on, and then turns to one of the main obstacles that oil companies in
Colombia face, that of transportation. The cost per barrel can range all they
way up to $30 per barrel, if an illegal armed group seizes a shipment.
This piece bears all the hallmarks of a very well-executed
public relations strategy on the part of oil companies operating in Colombia.
The impending strike by the oil sector unions has dominated headlines in recent
weeks, and this article represents an attempt by the companies to take back
control of the media narrative. Only time will tell if they are successful.
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