Bloomberg News

Rubiales Rises in Bogota After Government-Brokered Deal

October 10, 2011

(Updates with closing price in second paragraph.)

Oct. 10 (Bloomberg) -- Pacific Rubiales Energy Corp., the Toronto-based oil producer that operates fields in Colombia, rose to a two-week high after the government brokered a deal between the company and workers following protests this year.

The shares rose 4.4 percent to 42,160 pesos at the close in Bogota, the highest since Sept. 22.

The accord establishes a minimum monthly salary of 1.2 million pesos ($628) for workers and contractors provides workers with at least nine days off each month and reimburses them for transportation to the work site, according to an Oct. 8 statement by Colombia’s ministry of mines and energy.

The agreement was brokered with the support of Mauricio Cardenas, who was named Sept. 20 as the country’s Minister of Mines and Energy.

“It’s a good step forward toward improving relations with workers” even as protests may continue as at least one union did not recognize the accord, said Juan David Pineros, oil sector analyst for Interbolsa SA, Colombia’s biggest brokerage. The deal will help stabilize Rubiales’ operations though it may increase operating costs, Pineros said.

The company’s workers union and Union de Trabajadores de la Industria Energetica Nacional participated in the negotiations, the statement said. Colombia’s Union Sindical Obrera, which was involved in the protests, does not recognize the accord, the union’s vice-president German Osma told RCN radio today.

The company said Sept. 21 it would resume output “gradually” at Colombia’s largest oil field after an end of protests that cut production. Rubiales holds a 40 percent stake in the Rubiales field, which it operates. Bogota-based Ecopetrol SA owns the remainder of the field.

Sabanero Extension

Etablissments Maurel & Prom, a French oil explorer, said it found oil sandstones at a well at the Sabanero license in Colombia and oil samples taken have confirmed the field extension to the north-east, according to a statement on its website. The company, whose Colombian subsidiary Maurel et Prom Colombia BV is 49.99 percent owned by Pacific Rubiales, said three more wells will be drilled in 2011 and 2012.

Crude oil climbed to the highest level in two weeks as the leaders of Germany and France pledged to stem the European sovereign-debt crisis.

--Editors: Marie-France Han, Richard Richtmyer

To contact the reporter on this story: Blake Schmidt in Bogota at bschmidt16@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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