TORONTO, Sept. 14 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) announced today the start of operations of the Oleoductos de Los Llanos pipeline. This pipeline was built and will be operated by ODL, a special purpose vehicle structured for the project, where Ecopetrol (US:EC-N) and Pacific Rubiales hold a 65% and 35% interest, respectively.
This pipeline connects the Rubiales heavy oil field, located in the Los Llanos Basin, to the Monterrey station in the Casanare department of Colombia, where it will connect with the OCENSA pipeline, allowing for the transport of the crude from the field to the Caribbean export terminal of Covenas.
With a length of 235 km and a diameter of 24 inches, the initial capacity of the pipeline is 60,000 barrels per day, which will then increase to 160,000 barrels per day by the first quarter of 2010. With further investment the pipeline may transport up to 260,000 barrels per day. The pipeline is totally buried and was designed and built to minimize its environmental footprint.
Total investment for the project was US$ 530 million, excluding financing costs. During the peak of activity, the project employed 4,685 workers, most of them from the areas neighbouring the path of the pipeline.
This project, the largest of its kind in Colombia in the last decades, stands not only as the cornerstone of the development of Rubiales, but also as a key component of the future development of the hydrocarbon potential of the entire Llanos Orientales basin.
Ronald Pantin, Chief Executive Officer, commented: "With the coming on line of the ODL pipeline and the associated infrastructure field, we enter into a new phase of the development of Rubiales, reducing significantly our transport costs and eliminating the road transport restrictions. This pipeline will also play a key strategic role in the development of this emerging oil basin".
Javier Gutiérrez, President of Ecopetrol, was also quoted as saying: "This is a key strategic project for the development of the Colombian heavy crudes and it is an integral part of Ecopetrol's stated strategic goals for 2015".
Pacific Rubiales, a Canadian-based company and producer of natural gas and heavy crude oil, owns 100 percent of Meta Petroleum Corp., a Colombian oil operator which operates the Quifa block in the Llanos Basin in association with Ecopetrol S.A., the Colombian national oil company. The company is focused on identifying opportunities primarily within the eastern Llanos Basin of Colombia as well as in other areas in Colombia and northern Peru. Pacific Rubiales has a current net production of approximately 36,000 barrels of oil equivalent per day, with working interests in 32 blocks in Colombia and Peru.
Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, revenue, cash flow and costs, reserve and resource estimates, potential resources and reserves and the company's exploration and development plans and objectives) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the company based on information currently available to the company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from the estimates and assumptions; failure to establish estimated resources or reserves; fluctuations in petroleum prices and currency exchange rates; inflation; changes in equity markets; political developments in Colombia or Peru; changes to regulations affecting the company's activities; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the company's annual information form dated April 1, 2009 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
SOURCE Pacific Rubiales Energy Corp.
For further information: For further information: Mr. Ronald Pantin, Chief Executive Officer and Director, Mr. Jose Francisco Arata, President and Director, (416) 362 7735; Ms. Belinda Labatte, (647) 428 7035