Finally, some good news for Colombia's beleaguered oil sector

Over the last few months, Colombia’s oil sector has received nothing but bad news. Though production has remained steady, at least for the time being, expenditures on exploration have been slashed, workers have threatened to strike, and the share prices of Colombia’s oil players have plummeted. On Wednesday, the oil industry received a much-needed boost when Colombia’s largest privately-owned oil producer, Pacific Rubiales Energy Corp., announced that it had received a takeover offer from Mexican company Alfa SAB and the Texan company Harbour Energy Ltd. The announcement immediately drove up Pacific’s bonds value by 14 percent.

Pacific Rubiales’ general counsel said that the company views the offer as “reasonable,” and wants to complete the sale as quickly as possible. The total value of the offer comes to approximately $1.7 billion. Bloomberg Business noted that Pacific had been severely affected by the oil crisis, causing the company to become overleveraged and its debt levels to soar to approximately $4.7 billion.

All of the major Colombian papers published articles on Thursday assessing the impact of the sale and whether it would be good or bad for Colombia. El Espectador said that rumors have swirled regarding the possible sale of Pacific Rubiales since as early as 2014. The analysts that the paper spoke with were divided in their opinions on the sale. One argued that the pending sale is a welcome sign of confidence in the future value of the Colombian oil industry and Pacific Rubiales in particular. However, another analyst cautioned that the collapse in Pacific’s share price is due not just to the fall in oil prices, but also to the recent announcement that Ecopetrol would not be renewing Pacific’s contract on the Rubiales oil field, which produces close to 241,000 barrels per day.

Portafolio spoke with former Venezuelan energy minister and former OPEC president Humerto Calderón Berti to get his take on the sale. Berti said that he expects that with the sale, Pacific Rubiales will focus much more on launching new operations in Mexico, and much less on Colombia. He said that though he does not know what the new owners plan to do, he believes that it would be a shame for Pacific to leave Colombia, given all that it has done to grow the country’s oil industry.