Palliser Report- Cartagena, Colombia May 2012 VIII Congreso Internacional Mineria Petroleo y Gas.

Palliser had the opportunity to attend this excellent conference from 16th to 18th May 2012 in the historic and beautiful port city of Cartagena on the Caribbean coast in Colombia. This annual Congreso was started by the late Mr Aurelio Martinez, a highly respected Colombian (lawyer/ businessman). This year was the VIII Congreso as it has been continued by Ms. Adrianna Martinez (Partner -Martinez y Cordoba- legal firm) and Mr. Alejandro Martinez (CEO-Colombian Petroleum Association).

Summary Comments
The VIII Congreso was set against a booming and buoyant Colombia economy fuelled by the global demand for resources. The energy, minerals, coal and strong manufacturing sectors are underpinned by significant and sustained improvements in security and stability in this Latin American democracy.
Economy
Colombia with 47 million people has an evolving economy with GDP at about US$ 466 Billion. It is ranked 28th globally and 3rd largest in South America. Its key performance indicators for 2011 are GDP growth of 5.9% p.a. slowing to 4.5% in 2012 (over the last eight years per capita income has risen by 70% from US$5,600 to $9,900), inflation at 3.7% p.a. (currently 3.2%), unemployment of 10.8% and interest rates at 5.25%.
The strong economic performance is a result of surging exports of US $ 57 Billion (up 43% from 2010) mainly from resources - energy and minerals in particular. Oil production averages 1.1 million BOEPD while coal production (thermal) is at 85 million tonnes per annum (target 115 MT pa by 2014) which makes Colombia the 5th biggest coal producer globally. Exports are also bolstered by manufacturing which has grown by 18.7% over the past year. Government coffers received in 2011 US $7.2 billion in royalty payments from energy production.
Classification of Colombian debt as 'Investment Grade' for lending purposes by the three global Rating Agencies in 2011 has underpinned the growth in FDI at $US 13.3 billion p.a. in 2011. This represents an increase of 330% over the last eight years. Tourism has also shown a dramatic rise, doubling to just under 2 million tourists in 2011 - up from 1.0 million in 2006. This figure mirrors the dramatic improvement in national security over the corresponding period.
Colombia has 11 FTA Agreements including USA and Canada and is negotiating with the European Union and in Asia during 2012. Colombia has 11 International Investment Agreements in the Americas, EU and Asia and plans to conclude another 21 Agreements in 2012. In addition in 2012, it is anticipated that 16 double tax agreements will be finalised. Overall, Colombia is a country focused on expanding investment and exports horizons and offering simplified business and regulatory processes that will give it access to 1.5 billion consumers globally.


VIII Congreso Internacional Mineria, Petroleo y Gas
What struck Palliser about the VIII Congreso was ..........
The depth and the strength of the Conference. There were three Government Ministers (Defence, Mines and Environment) and three Vice Ministers in attendance. To demonstrate the focus of the Government approach, its three Ministers expounded the same strategic vision and social outcomes tied to defined policies. There was also an impressive array of industry sponsors lining up to support the Congreso - ExxonMobil, Shell, Petrobas and Banco de Bogota.
The tone of the Congreso was established at the beginning with a unique retrospective on the issues discussed in 2011 at the VII Congreso. This provided a yard stick to judge the relevance of those issues discussed and progressed and where they might lead talk in VIII Congreso. Palliser cannot help thinking that if conferences like APPEA adopted a form of this novel idea and measured their “talkfest” conclusions with outcomes achieved, they would have more relevance.
The speakers were senior representatives of their companies (e.g., Alberto Calderon from BHPB). Notably Shell flexed its technology credentials for deep water operations to bolster its plans for offshore drilling in deep waters within two years.
The quality of the national industry, government and international presenters was impressive. Likewise the topics, which included exploitation, environment, CSO, international industry competitiveness, minority groups, training, OH&S of industry, provided perspective drawn from other jurisdictions. These international perspectives came from UK, Canada, USA and Australia. They included a key note presentation from Chris Carra, Executive Director of AMOG Consulting outlining the Australian experience on offshore exploitation, technology and regulation.
There were also discussions and presentations from Trade Union leaders to air their issues and be part of the community communication process. Interestingly the union memberships represent just 4% of the workforce, mainly in the oilfield service sector. Their needs are a mixture of social and broad economic issues for State control, but it appears there is a limited focus on employee benefits.
A strong underlying theme at the Congreso was for the Government to provide transparency in its policy and actions and to engage in meaningful community dialogue. Presentations and discussions focused on policy outcomes such as improved infrastructure, spreading the wealth generated to all regions and poverty reduction measures e.g. education. Ideally the hope is for this to be achieved without relying on 'handouts'.
Another interesting theme centred on the benefits of the mining boom on society and the impact of exploitation on regional areas (culture, economics and environment) and its people. Questions were asked whether or not these benefits outweighed the impacts. Significantly there is now a similar debate surrounding the coal seam gas (CSG) developments in rural NSW and Queensland.
Collectively, these factors gave the conference substance on the energy and mining issues from many different perspectives.
Finally Palliser made a note on the conference style which included open sessions after each group of presentations. This provided an excellent forum to ask questions, but occasionally it led to some 'navel gazing' about the perceived impacts on Colombia of development activities which drifted away from the central themes. Presenters love to hypothesise no matter where in the globe!