Latin Finance - May/June 2010 - 41

colombia-peru investment

It has shares through Savia in eight exploratory blocks with an option for two others, as well as one offshore block, Z-2B, that is under production. The area produced an average of 3,479 barrels per day during the first two months of 2010, according to Peru’s energy and mines ministry. Ecopetrol on its own has concessions to three onshore blocks in the northern jungle, blocks 101, 134 and 158. It must decide this year what to do with technical evaluation agreements for six large claims on the Brazil-Colombia-Peru border that it shares with Brazil’s Petrobras and Peru’s Petroperu. Petrobras announced late last year that it had found no indications of hydrocarbons and would return the blocks to the Peruvian hydrocarbons promotion agency, Perupetro. Ecopetrol is slated to invest $1.25 billion in Peru in exploration and increasing production in the coming years as part of Savia. Exploratory wells alone require investment of around $150 million

over the next 18 months. Esteban Piedrahita, who is on Ecopetrol’s board as head of Colombia’s national planning department, says the company “has an ambitious plan to become a leader in the region . . . We expect 2010 to be a very dynamic year.” Ecopetrol’s shareholders in late March approved $2.8 billion equivalent in bond issuance to finance investment. The specifics will be decided later this year by the board. This would be the second bond placement, after the company sold $1.5 billion in paper last year. The investment plan for 2010 – including internal development and work in countries such as Peru – totals $6.9 billion.

ISA Builds Presence

Rivaling Ecopetrol in scope is Colombia’s Interconexión Eléctrica SA (ISA), the principal electricity transmission company in Peru. ISA operates approximately 9,000 kilometers of lines, making it by far the largest transmission company in Peru

with 60% of total lines, according to the operator of Peru’s integrated energy grid, COES. ISA signed a new contract in February with the Peruvian state to build a transmission line from Lima to the northern city of Trujillo. The 500 kilovolt line requires $165 million in investment and will be ready in 30 months of the February signing. Overall investment by ISA in other Peru transmission and substations will top $500 million in the coming two years, says former general manager Carlos Naranjo. Naranjo, who stepped down at the end of March after seven years, says ISA would certainly participate in a tender in the second quarter of 2010 for another 500 kilovolt line from Lima to the southern town of Montalvo. Forecast investment is around $450 million. The combined lines would form the longest transmission channel on the west coast of South America, according to ProInversión. “[ISA] will participate in all the tenders

CMY

May/June 2010

LatinFinance 41

Latin Finance - May/June 2010

Table of Contents for the Digital Edition of Latin Finance - May/June 2010