Organized by the Petroleum Trade Committee (Comité Gremial Petrolero – CGP), the summit is coordinated by CAMPETROL, the Colombian Petroleum and Gas Association (ACP), the Colombian Association of Oil and Gas Geologists and Geophysicists (ACGGP), and Colombian Association of Electrical and Mechanical Engineers (ACIEM).

The event is expected to attract more than 3,500 participants and feature around 90 exhibitors, combining a business exhibition with academic and technical programs, as well as a dedicated business matchmaking forum.

Executives, policymakers, operators, suppliers, and technical specialists will examine topics including energy security, offshore development, hydrocarbons, natural gas, and the future of Colombia’s energy transition. The summit traditionally includes participation from senior industry leaders, including executives from Ecopetrol and CAMPETROL.

Dates: November 4–6, 2026
Venue:Convention Center in Cartagena de Indias

For more information and registration details, follow this link.

Pearl was the country’s Environment Minister in 2011 where he led plans for the country to adapt to climate change, and was also High Commissioner for Peace, where he negotiated with guerilla groups ELN and FARC.

“I appreciate the confidence of the companies affiliated with the ACP and the hydrocarbon industry; I arrive with all the energy to lead this sector that is so important for the country, with the aim of building bridges for the joint construction of an energy policy for the benefit of all Colombian citizens and regions, since this industry has an enormous responsibility with the future generations and is therefore committed to sustainable development,” Pearl said.

Orlando Cabrales Segovia, president of the Board of Directors of the ACP, said: “Frank assumes the position at a crucial moment for the industry and the country, in which the efficient management of natural resources and innovation in the sector are essential for national energy security, economic diversification, well-being and a better quality of life for Colombians.”

“We must continue to think about growth, yes, this must be green growth focused on sustainable development, to which the human talent of the hydrocarbons industry is committed, men and women who innovate daily to ensure socially and environmentally responsible operations,” said Pearl in his first statement as the new President of the ACP.

Pearls appointment comes as the last president, Francisco José “Pacho” Lloreda retired after nine years leading the organization.

“On behalf of the ACP Board of Directors, we regret Dr. Lloreda’s decision not to continue leading the gremio (trade association). In these nine years, he was a firm defender of the industry and national interests, raising the name of the Colombian Association of Oil and Gas, and the hydrocarbon industry. We express our sincere feeling of gratitude and admiration, wishing him the best in his future plans,” said Cabrales.

Firstly, the road blockages in Puerto Gaitan were lifted (see my LinkedIn post on Wednesday for more detail) and this meant to end the reported shortfall of 50,000 bpd – there will be talks in a couple of weeks but hopefully resolution can be found.

Secondly oil production for December was up 5.34% YoY and stood at 784k bpd, as per November the highest reading since Covid struck. This is clearly good news and hopefully it will be reflected in export data going forward; the last couple of months have been a disappointment.

Sticking with oil, the local trade association (ACP) published their 2023 outlook. Following on from a 2022 average production of 754k bpd (+2% YoY) the expectation is for another similar sized increase to 770k bpd. Again, this is positive news, but there is still a mountain to climb to get back to the 1million bpd last seen in 2015. One negative aspect was that ACP is anticipating 4% less exploration investment (US$1.24bn) in 2023 with increasing interest in natural gas.

The oil sector also crept into Central Bank Chairman Villar’s speech at the Treasury Congress. Whilst much of his focus was on interest rates staying higher for longer across Latin America with inflation peaking over the next month, he also noted that the lack of full transparency over new oil exploration licenses, is adding to Peso volatility on the currency markets. Touching on the Peso, thus far this week it has weakened slightly, in line with other emerging market currencies.

At the same conference, Director of Public Credit Acosta highlighted the success of recent bond issuances which reflect confidence – foreign investors remain key to this.

President Petro saw his approval level slip in the latest survey from Datexco. Colombians are rarely optimistic and there was an increase (to 55%) of those who feel the country is going the wrong way. Still well down on a year ago but moving upwards – Petro’s own approval level slipped from 54% in October to 44% in February.

There are sixty pages to wade through, but sticking with the oil theme, Minister of Mining & Energy Velez is rated at 2.1 (out of 5) – the lowest within the cabinet. That said, no-one is hitting it out of the ballpark. Within that space, the president is beginning to make his moves on taking more control over the energy sector in terms of pricing; a situation that local companies are deeply concerned about.

Please find below the LinkedIn Video :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-economy-oil-activity-7029782125629341696-qXQL?utm_source=share&utm_medium=member_desktop

Have a wonderful weekend.

Roops

“Today we continue to report good news for the country. The hydrocarbon sector continues to reactivate and promote the development of Colombians. As of October 2022, export revenues of more than $16 billion USD were generated, compared to $10.6 billion in 2021, meaning an annual increase of 53%, equivalent to more than three tax reforms in 2022,” said Nelson Castañeda, Executive President of Campetrol.

At the end of November 2022, Colombia has an accumulated 59 exploratory wells drilled, thus exceeding the 25 total wells in 2021 (an increase of 136%).

According to the report, which monitors the behavior of the sector’s major actors at an industrial and macroeconomic level, 17 exploratory wells were drilled in the third quarter of this year, an increase of 143% compared to the seven registered in the same period. from the previous year.

As of September 2022, 14.1 million barrels of crude oil have been exported. This variation was mainly due to decreases in the price of oil, from the average of $100.5 USD/Bbl in August to $89.8 USD/Bbl in September, mainly due to downward pressures caused by expectations of a global economic recession in 2023.

“Definitely, the tax policies established in the reform presented by the new government could affect the performance of the companies in the segment, the sector and the country,” added Castañeda.

The report highlights that the growth rate of the Colombian economy in the third quarter of the year was 7.0% annualized (against 13.6% in the same quarter of 2021). For its part, the sector of crude oil extraction, natural gas and support activities registered economic growth of 1.3% in the third quarter (against -4.6% in the same period of 2021).

In November, 155 drilling & workover rigs were registered, exceeding the pre-pandemic activity of 136 rigs in January 2020.

In the third quarter, the preliminary average oil production in Colombia has maintained the growth trend, reaching 750.3 KBOPD (barrels of oil per day), an increase of 1.2% (9.1 KBOPD) compared to the third quarter. quarter of 2021.

“We hope that this behavior will be boosted by the investment plan proposed by Ecopetrol (NYSE: EC) for 2023, which includes investments of between $25.3 and $29.8 trillion COP, amounts that will be possible thanks to financing with own resources and the collection of the account receivable from the Fuel Price Stabilization Fund (FEPC), with whose contribution the national government will allow the sector to continue generating jobs and local and regional productive chains,” said Andrés Sánchez, Campetrol’s director of economic and administrative affairs.

Campetrol’s Oil Balance is a quarterly report, which exposes the behavior of the main figures of the oil, gas and energy sector in Colombia, at an industrial and macroeconomic level. Additionally, it outlines the perspectives of the sector from Campetrol’s vision based on forecasts and future projections of various indicators. The figures in this report are published with the latest official data available

• Subscribe free at www.FinanceColombia.com or fcsubscribe.com
• Loren Moss LinkedIn: https://www.linkedin.com/in/lorenmoss/
• Podcast: “Colombia Business News” iTunes, Audible, Spotify, etc.
• Youtube: “Colombia Business News Recap”
• Recommended: ACP – Escenarios de política energética y su impacto para los colombianos https://acp.com.co/web2017/es/publica… (in Spanish)
• Vostock Capital Events: https://vostockcapital.com/

ProcessMaker is a no-code/low-code open-source process automation platform founded two decades ago by Bobby Vernon and Brian Reale (above photo).  The two entrepreneurs failed early and quite often during their initial years, but in 2008 the team launched one of the first open-source workflow software solutions in the industry at the time, now known around the world as ProcessMaker.

ProcessMaker has bootstrapped its way from zero to 140 global employees, several million open-source downloads, and hundreds of customers across 52 countries, focusing primarily on applications for mid-market banking, higher education, and manufacturing.  Customers include community banks, multi-nationals, and over150 universities. In 2020, ProcessMaker was named a representative vendor by Gartner in its 2020 Market Guide for Intelligent Business Process Management Suites (iBPMS) and also clinched the 2020 CODiE Award for Best Digital Process Automation solution. ProcessMaker was also most recently ranked an enterprise BPM momentum leader on G2 Crowd.

ProcessMaker has bootstrapped its way from zero to 140 global employees, several million open-source downloads, and hundreds of customers across 52 countries, focusing primarily on applications for mid-market banking, higher education, and manufacturing.

“At ProcessMaker our mission is to make every second count,” explained CEO and Co-Founder, Brian Reale. “This resonates in everything we do.  At the most obvious level, it means empowering organizations to make their business processes more efficient.  On a deeper level, it means giving customers a way to quickly build and deploy beautiful, engaging digital business processes that users love.”

In its mid-market banking vertical ProcessMaker offers an off-the-shelf commercial account opening process that can be deployed by community banks in just a couple of weeks.  The result is that community banks can now deliver to their customers an experience that rivals the digital experience of banks 10 times their size at a fraction of the cost.   During COVID, this meant the banks were able to pivot from in-person commercial account opening to a fully digital, best-in-class experience while still focusing on building relationships with their customers.

In Higher Education, ProcessMaker automates student facing processes like transfer of credit approvals and grade change processes.  At one of the largest public university systems in the US, ProcessMaker reduced the average time for approving transfer credits from 5 months to 19 hours.

“We make a huge impact on student lives,” explained Reale.   “For students who were already struggling with the financial and emotional stress of the pandemic, waiting 5 months to know when or if transfer credits would be approved, often meant the difference between dropping out of college or staying to graduate.”

“This investment and partnership with Aldrich Capital marks a significant milestone for ProcessMaker, and I am very proud and excited for our team.  Moving forward with Brian’s continued leadership combined with the experience and resources of ACP, our growth prospects could not be brighter,” said ProcessMaker co-founder Bobby Vernon.

“Aldrich invested in ProcessMaker because it is a highly capital efficient founder-run business that has a respected global brand.  ProcessMaker is a market innovator that has proven that it knows how to be profitable and thrive even during a once in a century world-wide pandemic.  At ACP, we love low-code process automation and fully expect hundreds of market verticals to be transformed in the next decade.  Together with ACP, we expect ProcessMaker to continue to be a leader in this huge opportunity,” said Aldrich Capital Partners Managing Partner, Mirza Baig.

The global process automation market is expected to reach nearly $17 billion by 2023 with a CAGR of 5.8% according to a recent report.  The investment from Aldrich Capital will allow ProcessMaker to continue to invest in its market leading digital process automation platform and build out its presence in community banking, higher education, and manufacturing.

The report, prepared based on the preliminary planning and budgets of oil companies surveyed by ACP, shows the growing interest in natural gas by companies. For 2021, 45% of the total exploration budget will be focused on the search for gas, with a projected $400 million USD to develop gas production, representing 15% of the total investment in production.

“A rebound in investment in the sector is good news for the country, since not only the oil and gas industry guarantees the generation of fiscal resources that allow the nation and the regions to leverage public investment in strategic projects for economic and social reactivation, but also guarantees the self-sufficiency of the country, which will require energy for its industrial reactivation,” said the president of the ACP, Francisco José Lloreda Mera.

Exploratory investment will be concentrated in Colombia’s Caribbean region; while investment in production will go mainly to the Meta, Santander & Norte de Santander departments.

At the regional level, exploratory investment will be concentrated in the Caribbean region, primarily in Córdoba, and mostly on the mainland, where a significant part of the resources will focus on the search for natural gas. On the other hand, investment in production will be directed mainly to the department of Meta, which will continue to be the primary recipient of investment, followed by the Santander, Norte de Santander, Casanare, Antioquia, Putumayo and Huila departments.

“Natural gas is gaining strength in the energy matrix, so it is not surprising that its share has been growing in recent years. Colombia has geological potential, but for it to develop it is necessary to promote the growth of its demand, which implies measures that facilitate timely marketing, competitive transportation to consumption centers and promote competition under equal conditions. This will be key to promoting the growth of this energy in the country, the supply and the reliability that is required in an energy transition process,” explained Lloreda.

President of the ACP, Francisco José Lloreda Mera

Finally, the report highlights that 95% of the investments in 2021 will be carried out on land, while in offshore and unconventional fields (YNC) the investments will be aimed at developing studies and other activities prior to exploratory drilling, which is forecast for 2022.

Investment climate

The report also presented the results of the survey on the country’s investment climate, which assesses several fundamental aspects for the sector: prospectivity, competitiveness of goods and services, fiscal aspects, availability of infrastructure, contractual, environmental and social aspects, political stability, regulatory security, prior consultation and security in operations.

This year, the overall rating averaged 5, placing it in the acceptable range, registering a decrease compared to that granted in 2019 (6 / good). Of the 11 elements evaluated, only one totally favorable perception of the country remains, which continued to be Political Stability, which improved from 63% and 65% in 2018 and 2019, respectively, to 75% in 2020.

The perception of Prospectivity (The quality of being or having a likely location in which to prospect for minerals), which had always been a strength of the country, is now seen mostly as neutral or indifferent. In the remainder of the aspects evaluated, a perception classified between neutral and weak continues to prevail.
“The responses of the surveyed companies invite us to continue working, in conjunction with the Government, on the structural issues that need to be improved to regain interest in investing in Colombia. It is necessary to promote the growth of the natural gas market, reduce oil pipeline rates, have greater regulatory security, review contractual issues, optimize environmental licensing processes, among other aspects that are fundamental for the country to attract investment, develop its potential in oil and gas and generate the necessary resources to mark the economic and social reactivation,” concluded Lloreda.

Oil transportation provider Cenit (Spanish for Zenith), the pipeline operator owned by government controlled Ecopetrol announced last week “relief of up to 50% on pipeline transportation fees for oil producers” according to the headline of a printed statement released by Cenit. Reading the details however, the transporter is only offering delayed terms.

“Producers can pay only 50% of their rates during May and June, and the remaining balance will be due in 2 months,” said the statement.

“Even though this conjuncture also impacts the midstream segment due to the lower volumes transported through the systems due to the drop in demand, we are convinced that it is necessary to support producers and senders in general with financing initiatives so that the industry of hydrocarbons in Colombia continues to be a lever for the country’s economic and social development,” said Héctor Manosalva Rojas, president of Cenit.

Petroleum producers are not impressed

ACP had a very direct response to the initiative, saying that it does practically nothing to address the situation, but is little more than public relations. In a written public response, the ACP said:

1. The proposal of the transporters does not reduce the rates. It is not a 50% decrease in rates, but an offer of financing (for two months) with interest charged on this percentage. The measure does not supply the financial requirements of the senders against the current value of the rates, which, as indicated, are excessively high. This would only increase transportation costs, since after two months the same rate would have to be paid with interest (1.5% annual cash).
2. The financing offered by the carriers does not take into account the reality of the price crisis that the sector is experiencing, the duration of which is not clear. This price situation is leading private companies to close fields and therefore reduce their production. To date, production has been reduced by about 52,000 barrels per day and a further cut of 30,000 barrels per day is expected, starting next month. This not only affects the production of crude with consequences for the energy self-sufficiency of the country, but also reduces important resources of royalties, taxes and economic rights, considerably impacting the finances of the Nation and the contributions to the regions.
3. Regarding specific rate reductions, the real proposal of Ocensa (the pipeline that transports the largest volume of oil in the country) is to decrease rates by only 0.6%. In other words, it goes from a rate of $7.75 USD to $7.70 per barrel; a minimum adjustment when oil prices have fallen 71% since January and 42% in the last two months, and more, if one takes into account that in July 2019 the company increased tariffs by 10%.
4. Considering that the crude oil pipeline transportation rates have an operating cost weight of around 45%, what the industry requires and has requested is a 60% reduction when the Brent reference price is below US $ 45 a barrel.
5. The stage of negotiation between carriers and senders has been exhausted without success, taking into account that the offers presented by the carriers have not been the product of a negotiation, but rather unilateral announcements.
6. It is for this reason that the ACP has requested the Ministry of Mines and Energy to intervene in oil pipeline transportation tariffs, using its powers provided by the Petroleum Code, issuing a resolution that restores an economic balance in the hydrocarbon sector in this period of low prices, as a measure to help mitigate the current crisis.

Finance Colombia was able to reach Alejandro Ospina Angarrita, the president of UTIPEC, Colombia’s principal petroleum workers’ union, who generally is in agreement with the industry association on this topic.

Alejandro Ospina Angarrita is president of UTIPEC, Colombia’s principal petroleum workers’ union

Finance Colombia: What is UTIPEC’s proposal to solve the crisis?

Ospina: An immediate reduction of the pipeline transportation rates that are approved by the Ministry of Mines and Energy, and not just a financing of these costs as the transporters have proposed, in order to make production possible in the fields that are closed today and thus recovering the job that is being destroyed due to the low competitiveness of the Colombian oil industry.

The measure must be adopted immediately, and must be maintained until a revision of the tariff methodology is made, which overcompensates the investments made in these systems, so that it has brought us to the current situation which although in the past was bearable at high oil prices, it clearly does not reflect the reality of the business when compared to nearby competitors, such as in Ecuador, where a system of similar length, which must cross the Andes mountain range, offers rates of less than 30% of those collected in Colombia.

Finance Colombia: What should the administration of Ivan Duque and the ANH do?

Ospina: Pipeline tariffs are currently defined and approved by the Ministry of Mines and Energy, so it must be the national government that takes the exceptional measure, making the temporary adjustments and this same entity, which must carry out a review of the methodology with all market agents, to harmonize it with the reasonable remuneration of the investments.

The ANH, as administrator of the country’s hydrocarbon resource, and therefore promoter of the development of the industry in Colombia, must support producers, both the state controlled Ecopetrol and private companies, in the search for a competitive scheme to keep viable the oil activity. It is important to explain that Ecopetrol is the main entity affected by the current pipeline tariffs and consequently the Colombian state as the main shareholder of the company, since although Ecopetrol it is true, benefits from midstream activity, it is also true that there it only acts as operator of some of the systems, and co-owner of most of them, so in this business, there are other external beneficiaries; meanwhile the adverse impact of the tariffs affects Ecopetrol as the main producer and user of the same.

According to the most recent ACP economic report “Double covid-19 crisis and price war industry: impact for Colombia and the hydrocarbon sector,” with the current crisis it will be necessary to severely curtail investments and production of oil budgeted for 2020, and the group projects a daily drop of 35,000 barrels, which could reach 100,000 if the Brent reference crude price remains below $25 USD a barrel the rest of the year. This situation, added to the already high costs of operating in Colombia, means that the revenues per barrel fail to cover the average costs to produce oil in the country.

The ACP report, prepared based on information provided by the managers of a representative group of the private production companies, indicates that the national average of operating costs is between $20 – $25 dollars per barrel. For its part, the “break-even” or balance point to cover costs of production in Colombia is located between $40 and $45 dollars a barrel, that is, below this range, companies earn revenue that barely covers their current cost of production.

“The price crisis and high uncertainty have led companies to reduce investments, closing wells and fields, with a serious impact on employment, the contracting of goods and services and in the economic dynamics of the producing regions; this without counting the effect on the collection of royalties, taxes and contractual economic rights, and their impact on the finances of the nation,” said Francisco José Lloreda Mera, president of the ACP on a morning conference call with reporters today.

• A daily drop of around 35,000 barrels of oil is expected, which could reach 100,000 if Brent remains below $25 a barrel the rest of the year.
• ACP says that regulated oil transportation rates for pipelines represent around 45% of the total cost of operation.
• Tax revenues of the central government and the regions could fall more than 75% due to the petroleum crisis.

“The national government is aware of this, important measures have been taken, but an urgent intervention in pipeline transportation rates, as they are excessively high compared to the cost of production, are not internationally competitive, and are the main obstacle to companies in this difficult situation,” said Lloreda.

The industry leader further explained that “pipeline transportation is the only link in the chain of the sector whose cost in recent years has remained practically the same, representing around half of production costs, is not manageable by E&P companies because it is regulated by the Ministry of Energy, and various studies show that it is excessive; so it is essential that the tariffs are reviewed not only for the moment of price crisis and for the sustainability of the industry in the short term, but the current methodology should be structurally reformulated towards the future,” added Lloreda.

Measures taken to date

In order to mitigate the double crisis caused by Covid-19 and the fall in international prices, the Colombian government has advanced in actions for E&P (Exploration & Production) contracts with the National Hydrocarbons Agency (ANH) related to extension of terms and reduction of bank guarantees. Likewise, for all taxpayers, progress was made in the refund of VAT balances and flexibility in the tax schedule. Finally, additional measures were announced to defer payment of economic rights.

According to ACP, these decisions are extremely important to the industry and are expected to help preserve E&P contracts, future investment and to partially alleviate the burden on companies to support their sustainability during the crisis.

“The reduction of contributions of this sector to the national economy, which is projected at more than 75% compared to 2019, is critical at this time when more income is required to help the population more vulnerable to the economic and social emergency caused by Covid-19. We hope to continue advancing in the search for effective measures with the government that allows us to continue operating and mitigate the crisis in the sector, while preventing a devastating effect on employment and the regional & national economy,” emphasized Lloreda.

Photos courtesy ACP

According to ACP, the investment in E&P is expected to reach $4.97 billion USD, 23% higher than in 2019. The investment in exploration is expected to be between $920 million and $1 billion USD, 18% higher than in 2019. 70% of investment attention will be directed towards terrestrial projects and 30% destined for offshore activities.

• The investment in exploration for 2020 will be 18% higher than in 2019, representing an increase of 25% compared to the previous year.
• Potential gas fields lead the increase in projected exploration.
• The investment climate was rated between acceptable and good. Political stability, geological prospects and contractual aspects leaning favorable.

“To be able to materialize these investment projections, it is important that Colombia maintain political stability, continue advancing in contractual and fiscal aspects, work on improving environmental conditions and reducing processing times and transportation costs. This will allow us to catch up with other countries that are now taking the lead, because while in Colombia the investment in E&P fell in 2019, international projections estimate that in the rest of the world it grew approximately 4%, ”said Francisco José Lloreda Mera, president of the ACP (pictured above).

Production activity during 2020 should be valued, according to the report at $4.05 billion; 25% higher than in 2019. 53% of those resources will be towards drilling, and 15% to improved recovery, making up 19% of Colombia’s current production. The remaining amount will go to production facilities and other needs.

Gas exploration should be at approximately $300 million USD, or 1/3 of the projected total spend. $340 million USD will go into natural gas production, or 8% of the total production budget.

• To view the report (in Spanish) click here.
• To view the associated presentation (in Spanish) click here.

Though exploration and production expenditures decreased 7% in 2019 compared to the previous year, greater efficiencies in production meant that actual production held stable.

The ACP estimates that 2020 oil production will be approximately 890,000 barrels per day, up 1% over 2019, and commercial gas production will be roughly 1.09 billion cubic feet per day, or 190,000 BoE (Barrels of Oil Equivalent). 90% of the production will be in Colombia’s Eastern plains, the Middle Magdalena region (near the Barrancabermeja Refinery), and Caguán-Putumayo.

“Companies are focusing their investment efforts on sustaining production at the levels we had in 2019, avoiding the natural decline of the fields. If these investments were not made, the report indicates that the production of crude oil would fall to values ​​close to 730,000 barrels this year, hence the importance of continuing to boost the dynamism of the sector, overcome internal obstacles and be more competitive against the behavior and conditions of the industry in the rest of the world,” said Lloreda Mera.

According to the ACP, Colombia’s political stability compared to other jurisdictions is the country’s primary advantage, though stoppages and protests that took place last year do create a climate of uncertainty. Environmental, social and security issues are the primary challenges to investment attraction. The country’s geology remains very promising, with a prospect of significant additional finds.

In the report, the ACP calls for a continuation of collaboration between the industry, communities and the government to make operations in the regions of Colombia feasible, advance contractual reforms, and encourage new investments.

Photos courtesy ACP