Pacific Contract Bid Said to Diminish Role of Criticized TechAndrew Willis
Pacific Rubiales Energy Corp. is seeking to continue operating Colombia’s largest oil field without basing its effort on technology that has drawn criticism, two people with knowledge of the proposal said.
A December request to state-controlled Ecopetrol SA for a contract extension at the Rubiales field makes little reference to the Synchronized Thermal Additional Recovery technology, known as STAR, the people said, asking not to be identified because the matter isn’t public. STAR, which tries to boost recovery rates from mature fields by heating oil underground, didn’t meet expectations during a pilot project, outgoing Ecopetrol Chief Executive Officer Javier Gutierrez said in September.
Pacific Rubiales, based in Bogota, had no immediate comment and Ecopetrol didn’t reply to an e-mail and phone call seeking comment. Pacific Rubiales increased production at the Rubiales field 10-fold in five years, to more than 200,000 barrels a day, helping Colombia boost output to record levels, according to a 2014 company investor presentation. The contract for the field, which accounted for about 40 percent of Pacific Rubiales’s net output last year, is set to expire mid-2016.
Credit Suisse Group AG analysts said in a note last month that Pacific Rubiales may need to sell assets or cut its dividend as oil prices collapse and the outlook for the Rubiales field declines.
In an earlier proposal for a new contract at Rubiales, Pacific said Ecopetrol could keep primary production and share in the oil extracted using STAR.
The new proposal, which includes the Piriri field, also would alter the division of oil and investments between the two companies, the people said. Ecopetrol is expected to respond to the request in a few weeks, one of the people said.