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Pacific Rubiales slides on concerns Ecopetrol will nix oil recovery technology

  • Pacific Rubiales (OTCMKTS:PEGFF) fell to eight-week lows on concerns that tests of its oil recovery technology won’t be enough to persuade Ecopetrol (NYSE:EC) to use it in Colombia’s largest field.
  • Pacific execs are meeting with EC officials to discuss the test results of the STAR technology, which is designed to increase flow by heating oil in the well; Pacific is proposing to share production extracted using STAR at the Rubiales field, where it has a partnership with EC that expires in mid-2016.
  • While Pacific says STAR is effective and safe, the USO oil workers union says it causes water pollution and tremors.
Comments (2)
  • pi_fernandez@hotmail.com
    , contributor
    Comments (3) | Send Message
     
    There are local concerns on how Pacific Rubiales is lobbying its contract extension before Ecopetrol and the ANH (National Hydrocarbons Agency).

     

    There was a recent scandal in a restaurant in Rio de Janeiro (during the recent Soccer World Cup in Brazil) that involved the son of the Colombian President, the Pacific Rubiales Public Affairs Manager, a local News TV representative and other member of the presidential family. It is thought that Pacific Rubiales paid for all travelling and entertainment expenses and that explains the public rejecting this sort of lobby.

     

    The scandal video is said to be available in YOUTUBE.

     

    This issue can severely affect Ecopetrol which is a national oil company (85% goverment and 15% private shareholders including pensión funds), because the concesión ends and all assests and production should pass to Ecoeptrol unless Pacific Rubiales manage to get the contract extent negotiations. This is a large oil field, significant reserves, and therefore many million of dollars involved.

     

    I personally own shares of Ecopetrol through my pensión fund (nearly USD 7,000) and am concerned not only for the recent drop of Ecopetrol share but also for this way of handling things that are not transparent.

     

    I have not seen any official press release from Pacific Rubiales explaining this situation. However, some radio news program, congressmen, etc, are demanding and open debate and hope everything be settled according to the law, best practices and according to the tradition on how concessions reversiones have been handled in the past 60 years.
    15 Jul 2014, 08:51 PM Reply Like
  • Lordparrot
    , contributor
    Comments (39) | Send Message
     
    Thanks for your feedback I also own Ecopetrol and share your same concerns, as I understand just today EC announce it won´t use the STAR technology , any new comments from someone that is Colombian and close to the source of the news is appreciated.
    24 Jul 2014, 06:10 PM Reply Like
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