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To: bw who wrote (471)	5/28/1998 8:42:00 PM
From: Thean	Read Replies (2) \| Respond to of 14427

Some answers for guerilla concerns about SEV. bw - since you are out of SEV, just watch how SEV unfold the next few days. Thursday May 28, 7:15 pm Eastern Time Colombia's embattled oil sector still has fans By Atiya Hussain NEW YORK, May 15 (Reuters) - Colombia's highest-profile foreign oil companies have been beating a retreat as political violence escalates, but a couple of small independent U.S. firms have been filling the gap in what is still considered one of the best oil frontiers in the world. While big operators, such as British Petroleum Co. PLC (quote from Yahoo! UK & Ireland: BP.L) and Occidental Petroleum Corp. (OXY - news), have abandoned or scaled back key projects, Seven Seas (SEV - news) and Harken Energy (HEC - news), both based in Texas, have been raising funds for major expansions of their Colombian oil interests over the next few years. For investors looking for ''a pure Colombia play'' in the oil sector, these two companies are the obvious choices, according to analysts. ''Both companies have what I see as the critical elements of the oil business,'' said Victor Hughes, international exploration sector analyst at CIBC Oppenheimer in Houston. ''They have solid management, great land positions and a great street address, that is in an area where there is a lot of oil.'' Hughes has ''Strong Buy'' recommendations out on both companies, which have the bulk of their assest in Colombia. ''Some countries have better fiscal terms and better terrorist risks, but the bottom line is that there is still a lot of oil to be found in Colombia,'' he says. Nevertheless, the list of companies heading for the exit hasn't inspired confidence. Royal Dutch/Shell (RD.AS)(quote from Yahoo! UK & Ireland: SHEL.L) earlier this year put a ''for sale'' sign on its onshore interests; Triton Energy Corp. (OIL - news), which discovered the giant Cusiana/Cupiagua oil complex in the 1980s, also has its Colombia interests on the auction block, as does London-based LASMO (quote from Yahoo! UK & Ireland: LSMR.L); BP said it will not proceed with plans to develop the Piedmonte field; Occidental said this week it would scale back plans to exploit the Samore block in northeast Colombia. Though contract terms have been a factor for some, BP cited ''security reasons'' as a reason to abandon its Piedmonte West contract in the eastern part of the country, and Shell's motive for concentrating offshore was driven partly by the reduced vulnerability to guerrilla attacks. ''Obviously security is an issue,'' said Fadel Gheit, an energy analyst at Fahnestock & Co in New York. ''That makes people think twice and has nothing to do with your capital risk.'' But Harken and Seven Seas say it is not widely understood that security risks vary considerably between different regions in the country. ''There are really two Colombias,'' said Herb Williamson, chief financial officer for Seven Seas. While the more dangerous and, hence, less business-friendly areas lie east of the Andes, Seven Seas' operations lie in well-populated parts of the country, only 60 miles away from Bogota. ''We're in the same department as Bogota. It has one-third of the population and 50 percent of the army,'' Williamson said. ''It's farmland, not jungle,'' he added, explaining that guerrilla attacks are usually in thinly populated areas. ''There are security problems in the oilfields primarily in the northeast,'' agrees Mikel Faulkner, chairman of Harken Energy. ''We're not in those parts,'' he added. ''The independents will always do better in Colombia than the majors, because they don't attract the attention of the guerrillas and the kidnappers,'' says Fahnestock's Gheit. Seven Seas has ambitious plans to explore its Emerald Mountain project, in which it has a 57.7 percent stake. Emerald Mountain has proved crude reserves of 132 million barrels and probable reserves estimated at 594 million barrels. Harken recently announced plans to spend $1 billion in capital investment in Colombia from 1998 through 2001, and Faulkner said his company intended to drill about 12 exploration wells in Colombia this year. Harken operates five contract agreement areas, including the Cambulos area adjacent to the Seven Seas' Emerald Mountain discovery. Hughes of CIBC Oppenheimer said the two companies ''are in very different stages of development.'' The question for Seven Seas, with a confirmed major discovery, ''is how big is the structure. The company now has the financial wherewithall to persue the delineation and is very well positioned. Harken is more of an exploration play.''