Ecopetrol Could Invest $3-3.5 Bln In 2019, Same As This Year

(Reuters, 1.Nov.2018) — Colombian state-run oil company Ecopetrol will likely invest between $3 billion and $3.5 billion in 2019, the same figure as forecast for this year, its chief executive officer said on Thursday.

The spending is the backbone of an ambitious plan to boost production and explore for more oil to replenish dwindling reserves. The company has said it will drill 620 wells and double the number of rigs in operation this year.

Ecopetrol still plans to reach $3 billion to $3.5 billion in investments this year, though it had spent just $1.79 billion through the third quarter, executives said on an investor call after the company released third-quarter results on Wednesday.

“We need to keep doing more work internally, but the idea is that we will be in that range of $3 to $3.5 billion for this year. It’s the range with which we’ll possibly enter next year and which in some way denotes stability in operations,” CEO Felipe Bayon said.

Ecopetrol’s board is still in the process of approving that investment for 2019, a spokesman said.

The company is working to lessen the effects of social protests, which temporarily shuttered three fields in February and kept the first-quarter investment to just over $400 million, Chief Financial Officer Jaime Caballero said on the call.

“We are implementing initiatives to quickly execute projects and to mitigate the impact of the social and environmental contingencies that materialized in the first half of the year,” Caballero said.

The company had cut its investment forecast for 2018 from $3.5 billion to $4 billion in August because of the protests and other spending delays.

Net profit jumped 177 percent to more than $866 million in the third quarter, while consolidated oil and gas production climbed to 724,000 barrels per day (bpd), just under the company’s 725,000-bpd goal for the year.

Output has so far not been affected by nearly continuous attacks on the Cano Limon-Covenas pipeline from leftist guerrilla group the National Liberation Army.

The pipeline, which can transport up to 210,000 bpd, has been offline for much of this year because of bombings and illegal taps.

Production from the Cano Limon field, operated by Occidental Petroleum Corp, has been routed through a second pipeline.

Ecopetrol has reserves equivalent to about seven years of production, well below the average of nearly 12 years for the world’s top oil and gas companies.

(Reporting by Julia Symmes Cobb and Nelson Bocanegra; Editing by Helen Murphy and Jeffrey Benkoe)

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YPFB Transporte Controls Gas Leak In Villa Montes

(Energy Analytics Institute, Jared Yamin, 1.Nov.2018) — A new gas leak along a pipeline in Bolivia was reported in Villa Montes in the department of Tarija. The leak occurred at 1:50 am on Nov.1 in the Puesto Uno sector of Villa Montes.

“Personnel from YPFB [Transporte] arrived on the scene almost simultaneously and closed the valves that were necessary to prevent the gas from flowing through that pipeline,” reported the daily newspaper La Razón, citing Villa Montes Search and Rescue Group Manager Enrique Sánchez.

No injuries were reported nor any material damages.

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Pemex Likely To Launch McDermott Offshore Platform In April

(Reuters, Marianna Parraga, Ana Isabel Martinez, 1.Nov.2018) — Mexico’s state-run Pemex is expected to start operating in April the largest offshore oil platform built in the country in a decade, which was constructed by McDermott International, an executive of the engineering firm said on Thursday.

Pemex is trying to reverse a 14-year crude output decline by boosting its offshore operations, especially in shallow waters along the southern Gulf of Mexico. Pemex has long been focused on the area, which is expected to see more activity from private producers that have won development rights there since 2015.

The new platform will replace a similar one that was damaged by a large fire in 2016 that killed three workers.

“McDermott is 100-percent vertically integrated. We were in charge of engineering here in Mexico, purchases, construction, transportation and installation. We will deliver the platform ready for operation,” Alfredo Carvallo, director of McDermott’s Mexico unit, told Reuters in a interview.

The Abkatun-A2 platform required an investment of $454 million, 180 Mexican engineers, 2,600 direct workers and over two years to be completed, Carvallo added.

The facility can handle up to 220,000 barrels per day (bpd) of crude output and 352 million cubic feet per day of natural gas. It is expected to serve Pemex’s most prolific shallow-water oilfields, including Ku-Maloob-Zaap, located in the Campeche Bay.

The 15,000-tonne platform, built near the port of Altamira in northeastern Tamaulipas state, is the first one fully assembled in Mexico. Transportation to its final location is expected to be completed in November, followed by installation and testing in the following months.

McDermott has built 10 platforms in the last decade for Pemex and is working on two additional infrastructure projects for the state-run firm. The company has been using its Altamira hub to build platforms for oil companies across the Americas, including Trinidad & Tobago in the Caribbean.

McDermott earlier this week said it was awarded a contract by Brazil’s state-run Petrobras to design and build a pipeline associated with a gas export system in the Santos basin’s pre-salt area.

McDermott also announced it plans to divest its global storage tank business and pipeline construction in the United States, which had combined revenues of about $1.5 billion last year.

Pemex’s crude output slightly increased to 1.825 million bpd in September, but its accumulated annual average of 1.863 million bpd is 4 percent below last year’s production, the company said on Thursday.

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Exclusive: Perenco, Gazprombank Named In Venezuela Graft Case – Source

(Reuters, Alexandra Ulmer, 1.Nov.2018) — Anglo-French oil company Perenco and Russian financial firm Gazprombank have been identified in testimony by a former Venezuelan state oil company official who said he received millions of dollars in bribes in return for giving them preferential treatment, a source with knowledge of the matter said on Thursday.

Abraham Ortega, a former financial executive at state oil company PDVSA, accepted $5 million in bribes to favor a French oil company and from a Russian bank, U.S. prosecutors in Florida said on Wednesday in a statement, which did not name either company. Ortega received $3 million to help the French company and $2 million to favor the Russian one, according to the Department of Justice announcement.

Prosecutors said that in exchange, Ortega helped the companies gain “priority status” to loan money to oil joint ventures in which they were partners with PDVSA.

The high-profile case is one of a slew of U.S. probes into corruption in Venezuela, which is reeling from hyperinflation, empty shelves and mass emigration, but the case is one of the first to link corruption in the oil sector to prominent foreign firms.

Perenco declined to comment. Gazprombank and PDVSA did not immediately respond to requests for comment.

The case stemmed from cash-strapped PDVSA’s chronic delays in paying dividends to foreign firms, a second source said.

Perenco was desperate to receive those funds and get the money out of Venezuela, according to the source. Perenco agreed to loan money to the Petrowarao joint venture it ran with PDVSA, but as part of the deal had to be paid its late dividend payments beforehand.

The company received those payments in late 2013, the source said. Former oil minister Rafael Ramirez, who is now on the run from leftist President Nicolas Maduro’s government, announced in 2014 that Perenco was loaning $420 million to Petrowarao to quintuple its oil production to 24,000 barrels per day.

However, the source said that Perenco ended up loaning a small fraction of the promised amount.

In total, Ortega said he accepted $17 million in bribes as part of a broad embezzlement scheme. The money was hidden in the United States, Switzerland and the Bahamas, according to the U.S. prosecutors.

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Ecopetrol Boasts 67% Exploration Success Rate To-date In 2018

(Energy Analytics Institute, Piero Stewart, 1.Nov.2018) — Colombia’s state oil company Ecopetrol is boasting a 67% exploration success rate based on six completed wells thus far in 2018.

Of the six wells, two were abandoned and 4 were successful, reported the company in its third quarter results update. Three other wells are still under evaluation.

Ecopetrol aims to drill a 12 exploratory wells in 2018.

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PDVSA’s Citgo Contributes To 8th Annual Houston Energy Day Festival

(Citgo Petroleum, 1.Nov.2018) — CITGO Petroleum Corporation recently participated in Houston’s largest free family festival, Energy Day. The event brought together families, students, energy professionals and other members of the community for a day of science, technology, engineering, and mathematics (STEM) programs, exhibits and activities. With more than 25,000 attendees filling Sam Houston Park on Saturday, Oct. 20, Energy Day was, once again, an impressive display of education and community.

The popular event was presented by the Consumer Energy Alliance (CEA) and the Consumer Energy Education Foundation (CEEF).

“Energy Day is a shining example of this city’s prospering energy industry and its dedication to giving back,” said Rafael Gomez, Vice President Strategic Shareholder Relations and Government & Public Affairs.

CITGO was a sponsor of the event and organized a station where visitors participated in hands on activities that demonstrated how petroleum is used in every day products. As an active corporate citizen of Houston, CITGO prides itself in demonstrating the benefits of a STEM education and careers in the energy industry.

“Inspiring students to be excited about STEM education is a pillar of our corporate social responsibility efforts,” said Gomez. “Energy Day is great way to achieve that goal outside the classroom setting. Giving children the chance to experience dozens of hands-on exhibits in a single day keeps them entertained and engaged.”

The five-hour event offered 61 exhibits, including bike riding to generate electricity, creating LED bracelets, learning about the physics behind sports, and studying out how infrared images, robotics and virtual reality are used in STEM industries. To cap off the day, more than 180 students and teachers were awarded nearly $2,300 as part of the Energy Day Academic Program.

“Teaching children about the incredible opportunities STEM offers in a layout that’s welcoming and accommodating was our goal, and we’ve been able to provide that for the last eight years thanks to the support of local schools, energy experts and sponsors, said CEEF’s Energy Day Director, Kathleen van Keppel.”

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