Colombia's oil services sector outlines roadmap for recovery

Colombia must overhaul the contracting model for oil and gas field services to ensure a swift market recovery following the coronavirus pandemic, the Campetrol industry group has warned. 

In a newly published report, Campetrol said that equipment and services firms have been exposed to a greater degree than E&P operators.

"Equipment and service providers haven't been able to fully recover from the 2014 [price crash], unlike operators," said Campetrol, which represents Colombia's oil and gas supply chain.      

"This disparity has big consequences, especially in the way in which both segments can confront the [current] crisis in the short term."

It called for a "total re-engineering" of the payment and contract system so that suppliers are guaranteed long-term financial security. 

"The current conditions are unsustainable and don't allow [oil and gas] development in [some] regions," Campetrol said. "The viability of the equipment and services sector is in danger. We need to think about making long-term alliances that allow us to share operational risks."

The Bogotá-based entity cited legal and economic stability, credit availability, a competitive tax regime, security and social harmony as key areas that need to be addressed by regulators and lawmakers. 

"These issues represent the main bottlenecks that stand in the way of a successful recovery and they should be the fundamental pillars ... [of] policies to improve competitiveness," the report added.

BIDDING ROUND

In related news, Colombian hydrocarbons regulator ANH has updated procedural guidelines for companies participating in the third cycle of its permanent bidding process for E&P drilling rights.

The document, in Spanish, can be seen here,