Wednesday, April 8, 2015

Colombian oil production better than expected

The Colombian oil industry once again beat the odds and kept its average oil production above 1 million barrels per day for the month of March. Oil production in the country actually increased by 4.2% over the previous year to an average of 1,021,000 BPD, slightly below February’s average of 1,027,000 BPD. The Colombian minister of Mines and Energy, Tomás González was excited by the results, saying, “For the first time we have had six consecutive months at this level of production.” He explained that this means extra revenue for the Colombian government to pay for its various social programs.

In mining sector news, Reuters reported that an international arbitrator decided that Brazilian company CCX Carvão de Colombia will not be able to negotiate a sale of three coal mines in the Colombian Guajira to a group of investors represented by Blackstone Group LP. According to the ruling, this prohibition is in place until a final decision can be reached on a request by Yildirim Holding Inc., with whom CCX had entered into an asset-purchase agreement for the mines in 2014. Blackstone had reportedly bid $170 million for CCX’s Cañaverales and Papayal coal projects.

Colombian business journal La República reported on the Colombian mining industry’s worries regarding Colombia’s new National Development Plan. According to the article, the Colombian mining industry has become severely weakened and destabilized by legal and judicial uncertainty. The laws and regulations governing the sector seem to be in constant flux, and an industry that once held tremendous potential to be a real driver of economic growth in the country is now in jeopardy. The report calls on the government to make a detailed analysis of the National Development Plan to assess the destabilizing impact it could have on the mining industry.



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