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LatAmOil COMMENTARY LatAmOil
“That’s the big bet. If these projects are success- ful, immediately it generates appetites for the Caribbean coast. It gives us a great opportunity to recover reserves or incorporate new reserves, in gas more than anything,” he commented.
The field assigned to Shell and Noble appears to be highly prospective with respect to gas, the ANH head added. He did not give a reserve esti- mate for the site but said that it might contain liquid hydrocarbons as well as gas.
Colombia is hopeful that the work per- formed by Shell, Noble and the other investors in the four fields will help attract new investment from international oil companies (IOCs) with experience in offshore exploration and devel- opment, the ANH head added. He conceded, though, that investors might not rush into the offshore zone until prior to the completion of seismic surveys.
Fracking plans
Morelli was speaking the day after Felipe Bayon, the CEO of Ecopetrol, talked to Reuters about his company’s plans to proceed with pilot pro- jects at unconventional fields.
Bayon told the news agency in an interview that the NOC hoped to begin using hydrau- lic fracturing (fracking) techniques at several onshore fields in Colombia before the end of 2020. “I think in the second half of next year we will be ready to start drilling,” he stated. “The Ministry [of Mines and Energy] is working on the protocols. They’ll take some months, those will come out and then we can apply for the licences.”
He stressed that Ecopetrol was taking a cau- tious approach, since the outcome of the pilot
projects will influence government decisions about whether to allow fracking at other fields in the future.
“This is not about us rushing it,” he remarked. “This is about doing it well. This could be the next 20 to 30 years of energy security.”
He also told Reuters that the NOC had already set aside $500mn in funding for work on unconventional hydrocarbon deposits. Eco- petrol will use some of this money to finance its pilot projects, he said.
The CEO did not identify any of the fields slated for inclusion in the pilot projects. He explained his reticence by saying he did not want to encourage land speculation in any of the areas near the fields, Reuters reported.
He also declined to say whether Ecopetrol had lined up any partners for these initiatives. Nevertheless, he did indicate that the company was open to working with additional investors that were seeking to establish a foothold in Colombia.
“There are a lot of companies that are not currently in Colombia doing unconventionals that would like to be in Colombia,” he told the news agency. “We have several pilots that we are looking at.”
In the meantime, he said, Ecopetrol will work to build up its own expertise in fracking through a joint venture project with the US company Occidental Petroleum. The two companies are slated to work together in the US, at unconven- tional fields in the Permian Basin, and the com- pany employees involved in this project will be inagoodpositiontoacquiretheskillsneededto develop unconventional reserves in Colombia, he explained.
Pemex pays off bonds ahead of schedule
Ecopetrol is “
also looking to build up its own expertise in fracking through a JV with the US company Occidental Petroleum
MEXICO
MEXICO’S national oil company (NOC) Pemex succeeded in paying off more than $5bn worth of debts ahead of schedule last week.
Pemex said in a statement that it had accom- plished this feat by using $5bn in extra capital received from the government to repurchase securities with a face value of $5.0855bn that were scheduled to mature between 2020 and 2023.
This sum covers about one third of the secu- rities due to mature during that interval and includes $34.3mn worth of bonds due to mature in 2020, $2.781bn worth of 2021 bonds, $771mn worth of 2022 bonds and $778.8mn worth of 2023 bonds, as well as $34.066mn worth of accrued and unpaid interest from the securities, it said.
The NOC also explained that it had paid a total of $5.17bn for the securities, in line with a tender offer.
Seven banks – BofA Securities, Citigroup Capital Markets, Credit Agricole Securities (USA), Goldman Sachs, HSBC Securities
(USA), J.P. Morgan Securities and Mizuho Securities USA – acted as dealer managers on the transactions, it added.
In a separate statement, the company said that rebuying the bonds would help reduce its debt burden and strengthen its financial stand- ing. As a result, it said, Pemex will be able to reduce its exposure to risk in the future.
The NOC is keen to avoid risk, and not just because it is struggling under the burden of a $104bn-plus debt portfolio. It has seen Fitch Ratings downgrade its credit status to “junk” this year, and Moody’s Investors Service has indicated that it may follow suit.
According to Pemex’s statement, the com- pany carried out the bond repurchase pro- gramme in tandem with three benchmark bond issues on September 12. These new securities are due to mature in seven, 10 and 30 years, it said.
The company also stated that it intended to reveal more information about the repurchase at a later date, once the parties fixed the terms and conditions of the transactions.
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