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Gold/Mining/Energy : Trico Marine Services (TMAR) -- Ignore unavailable to you. Want to Upgrade?

To: JZGalt who wrote (846)	9/21/1998 5:11:00 PM
From: D.J.Smyth	Read Replies (1) \| Respond to of 1153

15:04 DJS Chief Of Colombia's State Oil Firm Sets Ambitious Exploration Goa 15:04 DJS Chief Of Colombia's State Oil Firm Sets Ambitious Exploration Goal BOGOTA -(Dow Jones)- The new president of Colombia's state-run oil company, Ecopetrol, aims to step up exploration efforts so that 50 exploratory wells are drilled each year, a local daily newspaper reported Monday. For the last three years, oil companies have dug only 23 to 25 new wells a year in Colombia, underscoring lagging interest in a country plagued by the drug trade and the guerrillas who help protect the illegal industry. Global weakness in oil prices also has hit the country, where crude represents the most lucrative legal export. "The goal that has been traced is to increase exploration activity to 50 wells a year," said Carlos Rodado, who took over at Ecopetrol just last week. He made his remarks in an interview with El Tiempo newspaper. Insurgents have been known to attack pipelines in Colombia, sometimes idling production. In addition, companies must take measures to protect their engineers and executives from kidnapping by rebels looking for ranson money. Investors sometimes are willing to back projects in the country despite these risks, when there is "an appropriate profit margin" to justify it, Rodado was quoted as saying. "But if the economic conditions of a contract, including taxation, are not appropriate, that's where they don't find the compensation for risks they might assume." While he didn't offer specifics, Rodado said that tax reform offered an area where Colombia might enhance its appeal to potential investors. At present, foreign oil companies pay a 7% remittance tax on oil profits, plus a 20% royalty. "The energy minister and Ecopetrol are interested in conversing with the finance minister to analyze the tax policy with regard to hydrocarbons and to see what can be done," Rodado was quoted as saying. He also said contract terms could be revised to offer greater incentives for companies to buy into less ambitious exploration plans. With small wells of less than 30 million barrels, "I believe that the contract terms can be revised," he said. A recent sale of 17 Colombian exploration contracts produced only three buyers, alerting experts to a need to reform oil policy if the country is to find new reserves and remain a net exporter of oil products. A big unknown in the equation is what demands rebel troops will make in peace negotiations initiated by President Andres Pastrana. The rebels have long insisted that Colombia should expand its participation in the oil industry, while officials hold that the country needs expertise and capital from abroad to advance exploration. - Ruth Morris: 571-215-7132 Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. (:E.ECO) 09/21 3:04p CDT