Headlines July 19th – 26th
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HASTA LUEGO SENATOR NAME
Monday, July 20th, 2015 was not only the first day of the Farc’s unilateral truce but the last day of Senator David Name’s reign as president of the Colombian Congress. We can hope that the CREG can now get on with setting natural gas prices based on reason and not politics.
Colombian sessions of Congress run from July 20th of one year to July 19th of the following. The day is one of the county’s seemingly innumerable holidays but it importantly celebrates the first declaration of independence from Spain….
WHAT’s NEXT FOR MEXICO’s ROUND?
With a lackluster result in Mexico’s Round One, the focus now turns to the next four rounds as observers comment on how the first results can be interpreted and impact the rest of the process.
To recap, despite heightened expectations for the round, only two of the 14 blocks on the table were assigned, and both to the same company. We took a look at some of the comments from Mexico, where authorities took a, and we paraphrase here, ‘hey, at least it happened and someone showed up’ argument. A ‘lesson’ that is the first step in a large process. The next two rounds remain scheduled, and the remaining blocks, 12 of them, will be offered in the future and not revert back to Pemex.
Revised or even just public minimum bids would have led to a different outcome. Perhaps four more blocks could have been assigned (because they received bids that were too low) and the whole round would have been viewed in a completely different light…
TAKING A DEEPER LOOK
We took the opportunity to analyze a number of sector elements this week in our daily graphs. For starters, an offhand comment from a multinational oil company got us thinking about the difference between E&P companies that are top-of-mind because they have a lot of production and companies that are top-of-mind because they are responsible for a lot of operations.
Another repeating theme is the growing skepticism from the Colombian public and several political sectors, as it is becoming harder to explain to why they are supposed to tighten their belts fiscally because of lower crude oil prices but they do not see associated relief at the pump. The main ‘villain’ behind the disconnect between what consumers / voters and politicians hear on the nightly news (crude oil prices in US dollars have gone down) and what they experience at the pump, is the rapid devaluation of the Colombian peso against the greenback…
In company news, Ecopetrol (NYSE:EC) has dropped another 45 places in the Fortune Global to number 346, which is hardly surprising but another blow to national pride…
Gran Tierra (TSX:GTE) announced share buy-back program lasting up to 1 year which foresees purchasing up to 5% of outstanding shares at market rates, and Denham Capital acquisition of Platino (TSX:PZE) received its shareholder approval...