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

Sibur to expand gas processing in Western Siberia

07/14/2015 Russian conglomerate PJSC Sibur Holding, Moscow, plans to expand gas fractionation capacity by 1.4 million tonnes/year (tpy) at its Tobolsk-Neftekh...

BG starts LNG shipment from Queensland Curtis CSG-LNG project’s Train 2

07/14/2015 BG Group PLC has loaded its first cargo of LNG from the second train of the Queensland Curtis coal seam gas-LNG (QCLNG) plant. The LNG was loaded o...

PHMSA issues state pipeline excavation damage prevention programs rule

07/14/2015 The US Pipeline and Hazardous Materials Safety Administration issued a final rule to establish the process for evaluating state excavation damage p...

Russia’s Rosneft inks deal for stake in Indian refinery

07/13/2015 OAO Rosneft has entered a preliminary agreement to purchase as much as 49% interest in Essar Energy PLC subsidiary Essar Oil Ltd., including its 20...

MPLX, MarkWest to merge in $15.8 billion deal

07/13/2015 MPLX LP, a Findlay, Ohio-based master limited partnership (MLP) formed by Marathon Petroleum Corp. in 2012, and Denver-based MarkWest Energy Partne...

EPP completes acquisition of EFS Midstream

07/13/2015 Enterprise Products Partners LP (EPP) said it has completed the purchase of EFS Midstream LLC from Pioneer Natural Resources Co. and Reliance Holdi...

PHMSA proposes pipeline accident notification regulations

07/13/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations.

API to issue recommended practice to address pipeline safety

07/13/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Topside modules installed on Clair Ridge platform west of Shetland

07/13/2015 BP PLC reported the installation of quarters and utilities (QU) topside modules on the new platform on Clair field, 75 km west of the Shetland Isla...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

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
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

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


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