Pacific Rubiales seeks downstream integration

By OGJ editors
HOUSTON, Nov. 9
-- Pacific Rubiales Energy Corp., Toronto, having grown the past 3 years to become Colombia’s second-largest oil and gas operator, plans to seek downstream market integration and a more substantive integration in host countries in which it operates.

The company launched a strategic review process with three aims: growth based on discovering, developing, and producing new and existing reserves, securing market access by participating in key oil and gas transportation and port infrastructure projects, and integrating downstream assets in the value chain while strengthening links with stakeholders in host countries.

Transportation, refining plans
Pacific Rubiales has secured transportation for its Llanos basin oil production in the OCENSA pipeline so far, and it also plans to participate with Colombia’s state Ecopetrol and others in the Bicentennial pipeline project, which it said has the “potential to be the cornerstone of future oil transportation in Colombia as it will open up communication lines between new production areas and export ports.”

The company also will acquire a stake in a private venture called Pacific Infrastructure Inc., which, among other projects, is developing a new crude oil and products terminal and port in Cartagena and a new pipeline that will link the Caribbean ports of Covenas and Cartagena. With a small investment, the company will secure alternative storage and port capacity for both its imports and growing exports.

The company’s Rubiales field is primed to reach 170,000 b/d of gross production by the end of 2010, and the adjacent Quifa block is to yield 30,000 b/d at the end of 2010 and 60,000 b/d by the end of 2011. The STAR secondary recovery project is expected to add reserves in Rubiales and the firm’s other heavy oil blocks.

Recent success in Block CPE-6 has begun to confirm the company’s view that its exploration blocks adjacent to the Rubiales field hold important promise (see map, OGJ, Sept. 6, 2010, p. 82). A longer term view of the portfolio has Arauca, CPO-1, Guama, Topoyaco, and other areas as its main focus, and these assets will continue to be the subject of sustained efforts in coming months.

The recent entry into Guatemala and commencement of operations in Peru also falls within this search for growth while diversifying the company’s resource base.

Competition for deep conversion refining capacity is hardening regionally. Pacific Rubiales does not plan to buy refinery assets but will move into mitigating the volatility in netbacks by accessing deep conversion refining capacity through long-term processing deals. This in turn will result in the need to start trading farther down the value chain.

Bunker fuel, asphaltite, coal
The vertical downstream integration strategy will be two-pronged. The company will invest in a new venture named CI Pacific Fuels SA that will initially focus on developing the bunker market in Colombia that it is already supplying as well as the supply of finished products to the wholesale market.

Pacific Rubiales has also decided to participate in the development of asphaltite and coal assets through its equity participation in a company called Pacific Coal SA.

The asphaltite resources, in particular, will afford access to large and profitable markets for exports and domestic ends as Colombia tackles its burgeoning need to expand roads and serve other industrial uses. This market lends itself to the company’s core competencies as asphaltite is mainly another form of extra-heavy hydrocarbons.

This downstream integration strategy is also an important piece in fulfilling the need for the company to gain a larger and more integrated presence in the Colombian market, particularly as it becomes the most important heavy oil producer in Colombia.

Pacific Rubiales has net production of 65,000 b/d of oil equivalent after royalties and owns working interests in 40 blocks in Colombia, Peru, and Guatemala.

An example of the company’s latest social initiatives can be found at Rubiales field, where it is promoting the planting of large plots of otherwise unused land with crops that will be directed towards producing biofuels, which can then be combined with the downstream integration strategy.

The company will cover its expansion plan with its own cash flow and at this time does not see the need for more debt or equity financing.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

Quicksilver Canada gets LNG export approval

07/02/2015 Quicksilver Resources Canada Inc. has received approval from the National Energy Board of Canada to export 20 million tonnes/year of LNG from a pos...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

SIBUR plans MTBE expansion at Togliattikauchuk

07/01/2015 Russian conglomerate OAO SIBUR Holding, Moscow, has started preparatory work for a project designed to expand production capacity for methyl tertia...

Shell makes FID on Appomattox deepwater development in Gulf of Mexico

07/01/2015 Royal Dutch Shell PLC has taken a final investment decision (FID) on the Appomattox deepwater development, authorizing construction and installatio...

Woodside-led Browse FLNG venture enters FEED phase

07/01/2015 The Woodside Petroleum Ltd.-led Browse LNG joint venture has entered the front-end engineering and design phase for a floating LNG (FLNG) developme...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected