Colombia watch: Pipeline attack, Ecopetrol bond, community opposition

By
Tuesday, May 20, 2014

Alleged members of Colombian guerrilla group the FARC carried out a bomb attack Monday night on the Transandino oil pipeline in Colombia's southern Putumayo department.

The saboteurs are assumed to be part of the FARC's 48th front, which is suspected of being responsible for two other attacks on the pipeline in the last two days, according to local news station Bluradio.

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

Transandino is owned and operated by Colombia state oil firm Ecopetrol (NYSE: EC, TSX: ECP). It carries crude from fields in the Putumayo basin to the country's Pacific port city Tumaco and has a connecting branch linking it with Ecuador.

The latest attack occurred hours before the FARC and guerrilla group the ELN's one-week ceasefire was scheduled to take effect.

***

Ratings agency Fitch expects to assign Ecopetrol's proposed US$2bn senior unsecured bond offer a 'BBB' rating, a Fitch release said Tuesday.

The expected rating reflects Ecopetrol's close state ties through its 88.5% government ownership, its strong financial profile and improving production levels, Fitch said.

However, Fitch did acknowledge that Ecopetrol's "aggressive" growth strategy "could be challenging to achieve."

Ecopetrol would use the proposed bond to finance its 2014-20 capital expenditure plan which totals US$68.5bn.

***

Local oil junior Hupecol is facing community opposition in central Meta department, news station RCN Radio reported Tuesday.

Hupecol is proposing an electrification project to power its development of the Llanos-58 block in Llanos basin. However, residents of Puerto López have accused Hupecol of not repairing environmental damage caused by its previous operations in the area.

Community members said the firm has provided no benefits to the area and denounced Colombian environmental agency ANLA and other authorities for failing to respond to Hupecol's alleged past environmental violations.