Pacific Rubiales Energy Corp. provided an update on its activities regarding the development of the crude oil reserves at its Rubiales field, as well as for associated commercial activities.
On April 19, 2008, the company achieved a new production record for its Rubiales field of 31,774 bopd (gross). This continues the company's ambitious march to achieve 126,000 bopd by the fourth quarter of 2009. This new production record represents an almost 100% increase in production in the last 12 months, and the continuous improvement in production reinforces the company's commitment to successfully develop the Rubiales field to its full potential. The company acquired the Rubiales field in July 2007.
New Facility to Export Rubiales Blend Comes on Stream
In pursuit of its strategy to maximize revenues and reduce costs, the company has gradually shifted its sales from the Colombian internal market to the export market. A major step in this direction was taken on April 19, when the company put into operation PF2, which is a new storage and mixing facility located in Guaduas, 90 km northwest of Bogota. This new facility, which cost approximately US$8.0 million, is designed to receive heavy oil via truck from the Rubiales field, and diluents from a number of origins. The streams are then mixed on line as Rubiales blend (18.5 degrees API) and pumped through PF1 (the original production facility) into the ODC (Oleoducto de Colombia) to its final destination at the Covenas oil terminal in the Caribbean. The facility has the capacity to handle up to 26,600 bopd of Rubiales blend, which is enough to handle all the company's net production from the Rubiales field as Rubiales blend until the pipeline from the Rubiales field becomes operational in the last quarter of 2009.
With PF2 coming into operation, all of the Rubiales field's net production can now be directed to the export market via pipeline. This has a beneficial, twofold impact on the fiscal strength of the company. On the one hand, the export market yields a significantly better value than the local market, and allows the company to take advantage of the bullish sentiment in the international oil market. On the other hand, the existence of the facility slashes the company's trucking costs to market, since the distances from the field to the main transportation pipeline are now significantly shorter. As a result of these two factors the company is expecting, at current prices, an export netback of US$67/bbl for the company's current net production of approximately 13,000 bopd.
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