July 15 (Bloomberg) -- Pacific Rubiales Energy Corp. (PRE) fell to an eight-week low on concern tests of its oil-recovery technology won’t be enough to persuade state-owned producer Ecopetrol SA (ECOPETL) to use it in Colombia’s largest field.
Pacific Rubiales dropped 5.2 percent to 33,500 pesos at the close of trading in Bogota, the biggest drop in a month. The stock was the worst performer on the benchmark Colcap (COLCAP) index, which climbed 0.4 percent.
Pacific executives are meeting today with Ecopetrol officials to discuss the test results of the Synchronized Thermal Additional Recovery technology, or STAR, 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 currently has a partnership with Ecopetrol that expires in mid-2016.
“The STAR issue has been driving them down with too many rumors coming out that it hasn’t been all they were expecting,” Maria Velasquez, an analyst at brokerage Serfinco, said by telephone from Medellin. “There’s speculation that the result won’t be positive, but it’s all just speculation.”
While Bogota- and Toronto-listed Pacific says STAR is effective and safe, the USO oil workers’ union says it causes water pollution and tremors. A team of technicians from Ecopetrol and Pacific has been assessing results from tests at the Quifa SW field.
Pacific said in a statement today that the STAR pilot met its objectives based on 18 months of tests.
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