Page 6 - LatAmOil Week 48 2019

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TRINIDAD AND TOBAGO
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He has, for example, cancelled or postponed competitive bidding rounds. Additionally, he has sought to let Pemex, the national oil com- pany (NOC), take the lead in new projects.
As a result, some potential investors are now ignoring green eld projects. Instead, they are looking for farm-in deals with companies that are already well established in Mexico.
is is a good option under the current legal regime, said Benigna Leiss, Chevron’s former country manager for Mexico. “If I want to grow and there are no [licensing] rounds [scheduled], the only option le is to buy a stake in some of the existing [projects]. Fortunately, regulation allows doing so,” she told Reuters earlier this week.
Large investors also stand to bene t from such arrangements, Reuters indicated. When- ever these companies need to raise extra funds to cover investments in Mexico and elsewhere and are having a hard time doing so under Lopez Obrador’s policy regime, they can o er small portions of their equity stakes to newcom- ers, it said.
Some of the companies that have followed this course include large operators such as China National Offshore Oil Corp. (CNOOC) and Wintershall (Germany), it added. Smaller inde- pendents such as Grupo Diavaz (Mexico) and Hokchi Energy (a Mexican subsidiary of Argen- tina’s Pan American Energy) have also looked
COLOMBIA
for partners. For example, the former is hoping to nd an ally that can help cover its investment obligations at the Miquetla onshore eld, which it is developing jointly with state-owned Pemex.
This shift away from greenfield prospects has fostered the emergence of a busy secondary market in oil and gas assets, and it does appear to represent an opportunity for potential buyers such as Chevron (US). But it does have draw- backs, commented Ruaraidh Montgomery, the director of research at the Welligence consul- tancy. “Mexico’s secondary market is interesting to some competitors, as it allows them to monet- ise portfolios but does not bring new investment opportunities,” he said..™
Colombian government requests
special dividend from Ecopetrol
The state will use its share of the funds to cover tax breaks offered in response to widespread protests
Mexico’s President Andres Manuel Lopez Obrador (Photo: El Universal)
COLOMBIA’S government has asked Ecopet- rol, the national oil company (NOC), to pay out a special dividend of COP3.7tn ($1.1bn) before the end of this year.
Last week, the country’s Ministry of Finance and Public Credit said it had called an extraordi- nary general meeting (EGM) of shareholders to discuss the proposed distribution of funds. It did not say exactly when the meeting would be held.
e government’s proposal calls for Ecopet- rol to use funds from its occasional reserve to cover the payment, which would be classi ed as a special dividend and not as an advance on the regular dividend due to be paid in 2020. It also states that the Finance Ministry will use the div- idend to fund investment programmes. If share- holders approve the measure at the upcoming meeting, the company will distribute dividends to its minority shareholders on December 23 and to its majority shareholder on December 26.
The outcome of the EGM is a foregone
conclusion, as Colombia’s government holds 88.5% of the NOC’s shares. Accordingly, Ecopet- rol will soon make a payment of COP3.2745tn (approximately $920bn) to the state.
The funds will help the Finance Ministry cover the cost of President Ivan Duque’s tax relief initiative. Colombian legislators are currently debating a new tax bill, and the president said last week that he wanted the dra law to include provisions granting tax breaks to the poorest 20% of the country’s population. He did so in response to widespread demonstrations by citi- zens critical of the government’s economic and social policies.
Alejandro Reyes, a senior economist at BBVA’s Colombian division, commented last
week that the special dividend programme would help Duque’s administration address protesters’ demands without draining its own coffers or undermining the country’s invest- ment-grade credit ratings. 
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w w w . N E W S B A S E . c o m Week 48 05•December•2019