Pacific Surges as New Oil License Boosts Output ProspectsAndrew Willis
Pacific Rubiales Energy Corp., Colombia’s largest independent crude producer, rose the most in three months after receiving licenses from the country’s environmental agency for its CPE-6 block.
The agency known as Anla also granted permits for the Guama block in northern Colombia’s Lower Magdalena Valley Basin, the Bogota-based company said in a statement distributed today by PRNewswire. Pacific has 50 percent of CPE-6 and is the block’s operator, while a unit of Talisman Energy Inc. has the other 50 percent. Pacific owns 100 percent of Guama. Shares gained as much as 5.3 percent in Toronto.
Pacific plans to start production at CPE-6, in Colombia’s Llanos Basin, next year after the licensing process experienced repeated delays. The block will allow the company to diversify output away from the Rubiales field, which accounted for 65 percent of net production, according to an October presentation. The Rubiales license is set to expire mid-2016.
“This block represents the first major step out for us from the Rubiales/Quifa SW field area and illustrates the repeatable and scalable nature of the company’s heavy oil strategy in Colombia, while also supporting the company’s plans to significantly increase its production over the next four years,” the company said in today’s statement.
The board of state-owned Ecopetrol SA, Colombia’s largest oil producer, has yet to decide on Pacific’s request for a new or extended license at the Rubiales field.
In an Aug. 13 interview, Chief Executive Officer Ronald Pantin said he expected a blanket exploration and development license for CPE-6 within three to six weeks. CPE-6 may be producing at 5,000 barrels per day by year end, Pantin said during an August conference call with investors.
The company “slightly improved upon the production of the second quarter,” Pacific President Jose Arata said in an Oct. 30 interview in Bogota. The purchase of Petrominerales Ltd. announced Sept. 30 is on running on schedule, he said.
Rubiales, listed in Toronto and Bogota, made at least 10 acquisitions of companies and oil block stakes over the past two years. Petrominerales will give it access to low-density crude, which is cheaper to transport than the heavy oil that makes up the bulk of its reserves.