Pacific Falls as Ecopetrol to Take Over Rubiales Field in 2016By and
Rubiales field in Meta province is Colombia's largest
Ecopetrol to take over field when Pacific E&P contract ends
Pacific Exploration & Production Corp. fell after partner Ecopetrol SA said it will take over operation of the Rubiales field, Colombia’s largest, at the end of their contract in mid-2016.
Pacific’s shares fell 8.1 percent to 5,580 pesos at 9:40 a.m. in Bogota trading, reaching the lowest since April. The stock has lost 63 percent this year, the worst performer on the benchmark Colcap index.
Ecopetrol, Colombia’s state-controlled producer, announced its board’s decision to start operating the field, which provides Pacific with more than a third of its production, in a regulatory filing Monday. Ecopetrol had said in March that Pacific’s contract for the field wouldn’t be extended. At the time, Pacific had said that it could make a new proposal to keep running the prospect.
“The very optimistic might have been holding out for a deal,” Rupert Stebbings, the managing director of equity sales at Bancolombia SA, said from Medellin.
Pacific, which was previously named Pacific Rubiales, changed its name to reflect a broader Latin America focus.
Pacific’s proposals for the field had initially focused on the potential benefit of a proprietary technology called Synchronized Thermal Additional Recovery. The STAR system didn’t meet expectations during a pilot project, Ecopetrol said in 2014.
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