Monthly Archives: June 2013

Colombia oil drilling falls, ANH stops publishing stats

Is there a relationship between these two facts? (Click images for original sources)

Oil drilling in Colombia falls 8%

Oil drilling contracting falls 8% in May (year over year)

For the fifth month of the year, a third of the drilling machines were unused, sector statistics show

Despite ending May with 51 exploration wells drilled, which fulfills 37.7 percent of Government goals [of 135] for the year, growing environmental licensing times and the need for companies to optimize their spending has produced a reduction in drill rig contracting, statistics from the Colombian Oil Association (ACP) and Oil Service Chamber of Commerce (Campetrol) show.

…At the end of May, … of 267 rigs registered, which include a range of power ratings, a third are unused while 171 are in use and 6 are in maintenance.

…Campetrol says that among rigs of more than 500 hp, the reduction in contracting is … between 10 and 12 percent…

“This is the lowest level of activity since the end of 2011…”

The ACP says the National Environmental Licensing Authority is nearing a new method of approving small changes more quickly, which will help exploration activity…

And then

Screen Shot 2013-06-27 at 3.26.20 AM

 

 Which is to say, Colombia’s oil regulator, after months of being late on its impressive and useful release of oil-related statistics, has stopped publishing them. They now tell people to get the information from the oil ministry, which also doesn’t publish much of the detailed information. Here’s a link to the last release from ANH. Just a few days ago ANH had posted a menu item for 2013 statistics, but it’s gone.

I guess if the numbers don’t look good, best not to publish the numbers, right? That’s the kind of transparency and good government we all want to see.

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Understanding Venezuela’s defense against ExxonMobil & ConocoPhillips

Sometime soon, the World Bank-linked ICSID tribunal will announce its awards in the arbitration cases brought by ExxonMobil (XOM) and ConocoPhillips (COP) against Venezuela for 2007 expropriations. What’s six years between friends?

Juan Carlos Boué writes an 84-page (plus notes) publicly available article in English explaining these huge arbitration cases, and why the outcome may not be as favourable (with a u) to XOM and COP as is widely assumed in the USA.

[The XOM and COP decision to leave Venezuela] has been presented as the calamitous culmination of a process whereby, through a mixture of bullying and unilateral measures, the Chávez administration sought to impose extortionate new terms on oil exploration and production activities in Venezuela, which rode roughshod over the vested rights of investors. Chávez’s actions, so this story goes, not only led to suspension of the transfer of managerial know-how and technology from which Venezuela had benefited so handsomely throughout the 1993-2006 period (and without which the gigantic resources of the Orinoco Oil Belt would not have been developed) but, ultimately, paved the way for the involuntary exodus of foreign oil companies from the country and the expropriation without compensation of their assets. That being the case, so this version goes, the aggrieved companies involved were left with no alternative but to initiate legal proceedings against a rogue government and its state oil
company and affiliates.

The picture presented in the paragraph above is drawn in strokes so broad and crude that it reduces the conduct and outcomes of Venezuelan oil policy from 1999 onwards to the level of a mere caricature. Nevertheless, the broadcast and print media have had no qualms about echoing and amplifying it, while a number of OECD governments – most especially, that of the USA – have seemed equally at ease to use it as a premise for taking foreign policy decisions with regard to Venezuela. That such credence should be vouchsafed to unproven allegations raised in the context of acrimonious litigation is hardly unprecedented in the annals of US foreign relations. Unfortunately, as on many a previous occasion, this facile stance contributes nothing towards understanding the real issues underlying, and arising from, a state’s exercise of its sovereign powers to the apparent detriment of the rights (real or alleged) of foreign investors.

If you’re an international law junkie, and I know many of you are, you can read the whole thing here.

Pacific Rubiales buying warplanes for Venezuelan oppostion? Moooooooooo

I think regular readers know that I can be skeptical about Colombia-oriented oil company Pacific Rubiales and its related companies. But this sounds like some of the more ridiculous bullshit I have ever come across. (Translation mine)

Pacific Rubiales implicated in alleged arms purchase of Venezuelan opposition

The ex-vice president of Venezuela, José Vicente Rangel, said the Canadian oil company was involved in the acts he denounced at the start of the month, in which “opposition Venezuelans” signed a purchase contract for 18 warplanes.

“Businessmen with problems with Venezuelan justice living in the United States and people linked to the oil company Pacific Rubiales that operates in Colombia” were involved in the May 27 purchase in San Antonio, Texas (USA), he said.

More here, if you’re up for a giggle.

h/t The Otto.

Venezuela not as safe a haven as Snowden’s team may think

Yesterday, someone using a computer well protected against cookies and snooping dropped in a few times to read my prior posts on Venezuela protecting fugitives from US justice:

Venezuelan intelligence defends Derwick Associates from the deadly peril of journalism

Venezuela protects guy who allegedly ripped off Citgo

Now I wake up to find that Ed Snowden, fugitive from US justice, may be on his way to the Bolivarian Republic. I really hope that his team isn’t hoping that he will receive the same treatment in Venezuela as that received by the nice people at Derwick Associates, who were accused in the press of overcharging the Venezuelan government, and by Guillermo Clamens, accused in the US of having stolen millions of dollars from Citgo. Continue reading

Arevenca’s constellation of weirdness only grows

Photo stolen without permission from http://mightymaca.com/page/spirulina/

Photo stolen without permission from http://mightymaca.com/page/spirulina/

Fox News has this remarkable expose of the ridiculous scam organization IIMSAM. It’s intellectually honest about the possible connections to US President Obama, which is saying something for a Fox News story. It also shows that this bizarre group issues travel documents that are fishy at best.

The writer left out one really odd tidbit that wouldn’t interest a general audience, but is sure to fascinate those of us following Latin America oil scams. As SG pointed out in comments in April, Miguel Lausell is an IIMSAM goodwill ambassador. Lausell, you might recall, was once a representative of the oil scam called Arevenca. He is one of the defendants being sued by Betterroads Asphalt in Puerto Rico for non-delivery of almost $8 million worth of petroleum products.

This link is also about Lausell and IIMSAM.

Mmmm spirulina. Delish.

Is Petrobras “richer, more powerful, stronger” enough yet?

Early 2010: Investors in Petrobras (PBR) hear about the Brazilian government’s plan to issue more stock for the state-controlled oil company and buy most of it.

September 23 2010, President Lula da Silva is quoted by financial news outlet Bloomberg News:

Previous governments “only went to the stock exchange to sell public companies,” Lula said Sept. 21 at a railway inauguration. “I will go to the stock exchange to capitalize Petrobras.”

“Petrobras will be richer, more powerful and stronger, and consequently Brazil will richer, more powerful and stronger,” he said.

June 2013, we can see how much stronger and more powerful the company became once shareholders realized that the government would look out for itself, rather than minority holders:

Screen Shot 2013-06-19 at 4.32.27 PM

 

What’s a little 8-year low between friends? And yes, that volume spike there? That was Sept 24, 2010. The stock barely moved that day. That is the picture of “smart money” leaving.

From what I can tell on this here table, Brazilian rubes are included among “other entities.” They have 2.44 billion shares, 18.7 percent of the company, while all other global investors hold 34 percent. The balance is held by various government agencies. Since Brazil’s stock-owning classes make up a tiny part of the world’s investors, those Brazilians have taken a uniquely serious hit on this price decline. How much of a hit? On the decline from, say, $40 a share to $15, you’re talking $25 a share, or $61 billion in lost wealth for Brazilians just on Petrobras’s share decline. Much of that is probably coming out of pension funds for regular people.

So much for “richer, more powerful and stronger.”

PS: I should be clear that I’m no expert on Petrobras, and I know I’m being very simplistic by assigning the stock drop to that one move by the government, without looking at the general shift out of emerging markets, the regulatory problems for the presalt, and probably many more elements I would know about if I spent more time paying attention to Wall Street. Regardless, I think the volume spike alone shows that Lula’s words mattered.