Page 12 - LatAmOil Week 21 2020

LatAmOil COLOMBIA LatAmOil
“[It] would be the first time that something like that will happen,” he commented.
He also warned that intervention in the tariff regime would probably encounter some resist- ance. “There will be repercussions,” he said. “The government is preparing for litigation.”
Private producers in Colombia have been hit hard by falling oil prices and the demand destruction sparked by the coronavirus (COVID-19) pandemic. The Colombian Petro- leum Association (ACP), an industry group rep- resenting private operators, has frequently said that the tariffs on pipeline transport are too high under these circumstances.
Currently tariffs are set by Cenit, a subsidiary of Colombia’s state-run oil company Ecopetrol. Earlier this year, Cenit offered a 50% cut in pipe- line tariffs for May and June and said producers could pay back the balance from September onwards. But the ACP rejected its proposal, say- ing that the new financing plan would result in higher costs later in the year.
The Colombian government is trying to boost the country’s stagnant oil sector by mod- ifying contractual terms and lowering bureau- cratic hurdles. It hopes these measures will help promote exploration, which has declined in recent years.
Last year, Colombian authorities awarded 31 contracts to oil and gas companies within the framework of the mission to boost the energy sector. These deals are expected to bring in around $2.7bn worth of investment to the industry over the next few years. They may also help to replace the country’s depleted reserves and raise output.
Prior to the coronavirus outbreak, the gov- ernment had been expecting oil production to rise to 890,000-900,000 barrels per day this year on average. Recently, though, it cut its forecast to 750,000-850,000 bpd.
Before the pandemic, Colombia was extract- ing around 880,000 bpd of oil and exporting around half of the total. ™
GUYANA
Georgetown names 35 applicants in oil marketing agency tender
GUYANA’S Department of Energy has iden- tified the 35 companies that submitted expres- sions of interest (EoIs) last month in a tender for its oil marketing agency contract.
The department revealed in a statement last week that supermajors BP (UK) and ExxonMo- bil (US) were among the applicants, along with the Swiss-based commodity trading firms Gun- vor and Mercuria, as well as US-based trader Glencore and Netherlands-based Vitol. It also explained that it was preparing a shortlist of companies that would be invited to submit full technical and financial proposals by June 25 and would post details of the bidding process on its website.
The government said previously that it was planning to shortlist up to 20 companies.
The winner of the bidding contest will act as marketing agent for the Guyanese share of the Latin American country’s crude production. (Georgetown is entitled to a share of the oil pro- duced at the offshore Liza well, where a consor- tium led by ExxonMobil began to extract oil last December.)
The marketing agent will be expected to lift around five cargoes of around 1mn barrels each over the 12-month duration of the contract. Interested parties must have at least five years of experience in oil marketing and trading.
Guyana started to sell its share of crude via open-market tenders last year, since it has
no refining capacity. Its first cargo was sold to Shell-Western Supply and Trading, a subsidiary of Royal Dutch Shell (UK/Netherlands). The new marketing contract is anticipated to take effect once the Shell subsidiary has fulfilled its current contract to sell Guyana’s first 3mn bar- rels of crude.
Earlier this month, the Department of Energy (DoE) said it had proposed a list of experts to help evaluate prospective market- ers, saying the government’s evaluators lacked energy expertise. “The DoE proposed a list of names of persons to serve on the evaluation committee to ensure that the panel has the type of expertise required,” Mark Bynoe, Director of the Energy Department, was quoted as saying by the local daily Stabroek News. ™
Guyana is seeking an agent for the sale of its share of Liza production (Image: Hess)
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w w w . N E W S B A S E . c o m Week 21 28•May•2020