What are Cenit's main investment plans in the short term?
CAMILO MARULANDA LÓPEZ The oil industry has changed significantly in Colombia in the last few years; previously, there used to be only a small number of players, all of them large companies that were developing infrastructure as they needed. Over the last three years, Ecopetrol's group has invested around $4 billion in the mainstream segment, and we planned an initial investment of $2.2 billion for 2013. We foresee three priorities in terms of projects: the finalization of the bicentennial pipeline, the expansion of the Colombian and Ocensa pipelines, and the strengthening of secondary pipelines that transport oil to the trunking pipelines. It is important for the company to target between three and four large projects in its first year of operation, and we aim to achieve that through our strategic plan.
How do you assess the infrastructure for pipelines in Colombia, and what are the main challenges you are facing in this sector?
JOHN GEREZ Infrastructure is a major issue. Our business is pipelines and there are currently restrictions. There is more oil to be transported than there is capacity. There is a lot of oil that is either being transported by truck or not being transported at all. The most efficient way to transport oil is by pipeline. We expect that there are many opportunities here for new pipeline projects. Colombia has recognised that there is a need to develop its infrastructure. Ecopetrol has been actively involved in the development of new pipeline infrastructure. We see the creation of Cenit, the new transportation arm of Ecopetrol as an independent company, as a very positive step and we think that there is room for other players as well to fill the gap and the needs in transportation infrastructure. That is why we are here.
What is your outlook for the Colombian energy sector in the medium to long term?
CML The challenges the sector faces can be categorized into the following areas: environmental licensing, social responsibility with minority communities in the region, and security. The sector has a strong and stable regulatory framework and profitable activity, and that is generating high levels of interest among foreign investors. Over the medium term, we foresee the arrival of specialized players, and at the same time the companies already operating in the sector will consolidate their positions and activities. I believe that there are plenty of opportunities in the sector, as there are important investment projects such as new pipelines. That could lead to the creation of synergies between different companies in the near future.
JG I think that Colombia has a lot of prospects with a lot of potential in a number of different areas, not just in production. Now, there is great potential for heavy oil production in large areas that are unexplored or have no infrastructure. I believe that, as with any country that has gone through rapid growth in an industry, there needs to be some readjustment. There are issues, certainly with regard to environmental licensing, and there is also the issue of management of communities and social expectations, as well as security issues that need to be managed. There have certainly been lots of discussions about transporting Venezuelan crude through Colombia. The Venezuelans are interested in transporting through Colombia, and the Chinese are certainly involved in that. There have also been discussions and a memorandum of understanding (MoU) with the Ecuadorean government regarding some sort of connection. Also, having a Pacific export terminal and the option of transporting either to the US gulf coast or to the Pacific is very attractive.