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Colombia 2013 | ENERGY & MINING | B2B: OIL SERVICES

Higher production capacity means more business for oil services providers, with market leaders identifying opportunities early on.

Rosario Canepa
ROSARIO CANEPA
General Manager
Calmena Energy Services
Hermes Aguirre
HERMES AGUIRRE
President of the Board
CAMPETROL

What does Colombia represent for Calmena's overall operations?

ROSARIO CANEPA Our company has been based in Colombia since 2010, though it also works in Canada, the US, Mexico, Brazil, and the Middle East. We are present in the country with two lines of services, which are directional drilling and contract drilling. We are just starting our operations in Colombia, so it will take some time to develop them. For the time being, we are involved exclusively in exploration. The construction of pipelines is very strategic for the country, and will definitely affect our business, but not in a very direct way. Nevertheless, the Colombian market provides an increasing number of opportunities. There is also the possibility to improve the pipelines, which would be very interesting from a strategic point of view. If these lines connected the Atlantic Ocean over the basin of Venezuela with the Pacific coast, it would also be very strategic. However, there are certain conditions that are not favorable for investing in the country, such as the fact that negotiations take a very long time, and this will affect operations.

What advantages does CAMPETROL offer its affiliates?

HERMES AGUIRRE We have been gathering an understanding of the service industry in Colombia for a long time. For every employee the service company hires, there are 3.5 employees that are getting work outside of the industry, such as in hotels and other services provided externally. That is a huge impact. We have been trying to get the government and operators closer to the service industry. If we can execute and do our job better, then that brings benefits to both communities and operators. We are the link. We also work with royalties to get the best alliance with operators. In the past, each operator worked with 20 or 50 different service companies with 20 or 50 contracts. Most of them were related to the same areas in terms of risk, regulations, and legal formalities, but were not necessarily the same service. Some service companies, because of a lack of understanding or competitiveness, surrendered some of their rights, creating an unequal balance in the industry. CAMPETROL has been working very closely with Ecopetrol and other operators in order to create a framework of contracts more aligned with the development of the industry.

What are your expectations for oil and gas production in Colombia in the medium term?

RC The country has huge potential and there is a political willingness from major institutions to develop new projects. Everyone wants to achieve the goal of reaching 1 million or 500,000 barrels per day (bbl/d) in the next five or six years, but it is a challenge because alongside this goal we need to improve a variety of processes that are not yet ready. I see the country moving rapidly, but not all sectors are moving at the same speed; there are some parts that still need to improve. I believe that Colombia should increase its capabilities in refining, which is being done through the development the new refinery in Cartagena. Considering the quantity of oil produced by the country, we will need to build higher capacity facilities. There have been strong efforts in the country to implement new technology and achieve more advanced equipment for exploration and production, but my main feeling is that the highest increase in production is due to the improvement of security, which is the key point that paved the way for growth in oil production.

What main challenges are service companies facing?

HA Colombia has a number of topographic challenges, and this obviously has an impact on the industry. There has also been a lack of proper investment in infrastructure, making mobility an issue. For example, trying to get hold of the necessary equipment is a huge task. The equipment we manage at Campetrol is heavy in nature, and we encounter a lot of challenges moving it around the country and accessing specific areas. At times it is very costly, or almost impossible. In addition, security is obviously a challenge as well. When we talk about security, we mean industrial security and physical security. We face security challenges every day because we do not have the necessary facilities.