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Colombian oil pipeline changes hands in part acquisition

Dec. 10, 2013 at 1:27 PM   |   Comments

BOGOTA, Dec. 10 (UPI) -- Colombia's largest crude oil transportation system is going through an ownership change after global investor Advent International led a partial buyout in a deal signalling growing interest in the Latin American country's energy prospects.

Cenit S.A.S., a wholly owned subsidiary of Ecopetrol S.A., Colombia's largest integrated oil and gas company, will continue with its majority ownership of the 498-mile Ocensa pipeline, which transports about 60 percent of Colombia's crude oil, more than two thirds of which is exported.

Advent International said the investor group it's leading will acquire 22 percent of Ocensa from Talisman, Total and CEPSA, Spain's fourth-largest industrial group in terms of turnover but actually owned by Abu Dhabi, United Arab Emirates. Talisman Energy Inc. has headquarters in Calgary, Alberta.

The Ocensa pipeline system has an average pumping capacity of 590,000 barrels per day, with eight stations and four distinct segments extending across Colombia.It is the main pipeline between Colombia's Llanos region and the Atlantic Coast.

Advent International said it signed a "definitive agreement" to acquire the minority interest in Oleoducto Central S.A., or Ocensa.

Colombia's two largest pension funds, Sociedad Administradora de Fondos de Pensiones y Cesantias Porvenir S.A., also known as Porvenir, and Administradora de Fondos de Pensiones y Cesantia Proteccion S.A. or Proteccion will join Advent through a co-investment fund formed by Advent as a sponsor to the effect the purchase.

Completion of the transaction is subject to customary closing conditions and is expected to take place within the next few weeks, Advent said.

"The Ocensa pipeline forms an integral part of Colombia's crude oil transportation system, and retaining our capacity rights through this transaction enables Talisman to maintain our competitive advantage, transporting oil from our own operations and generating third-party revenue from any surplus capacity."

The Advent-led investor group will work closely with Cenit and the company's management team to support the continued growth of the business. Ocensa is strategically well positioned to manage the continued expansion of Colombia's crude oil output, which has nearly doubled in the past six years and is expected to increase further in the coming years.

Ocensa's system is running at close to 100 percent utilization, and the company has begun a staged expansion project to increase capacity by approximately 30 percent.

Ocensa President Luisa Lafaurie said the company hoped to maintain its "proven track record of safety and reliability."

Mauricio Salgar, a managing director at Advent and head of its Bogota office, called Ocensa "a core strategic asset for Colombia" and "an attractive business model."

Gurinder Grewal, a principal in Advent's Boston office who helps coordinate the firm's global activities in the energy sector, said Ocensa, its fourth transaction in the energy sector in the past three years, after investments in BOS Solutions, NCS Energy Services and P2 Energy Solutions, highlights "growing and now global activity" in the sector.

Talisman Chief Executive Officer Hal Kvisle said the company will retain its capacity rights and maintain competitive advantage, transporting oil from our own operations and generating third-party revenue from any surplus capacity."

Ladislas Paszkiewicz, President, Americas for Total Exploration & Production, said Total is retaining all of its transportation rights with Ocensa through its local subsidiary Total E&P Colombie.

CEPSA CEO Pedro Miro said Advent's participation is "a step forward in consolidating Ocensa as a pipeline operator, while upstream companies like ours will focus on increasing oil and gas production from Colombian fields, both current and new to come."

Topics: Abu Dhabi
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