Seven Seas Petroleum Inc., Houston, said Wednesday it has signed a contract with Cosacol Ltda. to build the 36-mile La Dorada-Guaduas pipeline in Colombia.
The line will connect Guaduas oil field in Colombia's Magdalena basin to international oil markets via existing pipeline infrastructure.
Cosacol, the affiliate of US-based United Strategic Energies Co., is a contractor for the construction of pipelines, civil works, and the maintenance of oil and gas field equipment in Colombia. Its principal clients include BP and the state firms Ecopetrol and Ecogas.
Cosacol maintains several pipelines in Colombia, including the Ocensa line that connects BP's Cusiana/Cupiagua field to the port of Covenas.
Seven Seas said has taken a $10 million loan from Stillwater National Bank and Trust Co., N.A. The loan was secured by the stock of Seven Seas operating subsidiaries and was guaranteed by Robert A. Hefner III, Seven Seas chairman and CEO.
The company said it would use the funds for working capital. It plans to replace the loan with a larger financing package in early 2001.
Hefner said, "With the first shipment of pipe for the pipeline already in Colombia, and the construction contract in place, we remain on schedule to commence pipeline production by mid-2001.''
Seven Seas was negotiating with Sipetrol and Cimarrona LLC, its partners in Guaduas oil field, regarding their participation in the pipeline and field development. Seven Seas said they have forfeited their right to participate in the line, which it plans to build alone. Sipetrol and Cimarrona disagree.
