- After a series of conversations and negotiations, agreements are made covering close to 80% of the current production in the country, significantly mitigating the impact of the consequences of the low oil prices and the pandemic.
- Said negotiations resulted in discounts, financing agreements and flexibility in the amounts of 26 transportation contracts, which transported close to 600 thousand barrels of oil per day between April and May.
Bogotá, 29 May 2020. Oil transportation companies through Colombia’s pipelines made several agreements in the past few days with producers and traders on significant fee reductions. These agreements are a contribution for oil companies to have access to immediate facilities to mitigate the impact of the crisis derived from the abrupt drop in oil prices and COVID-19.
Following the talks and negotiations, Cenit Transporte y Logística de Hidrocarburos S.A.S, Oleoducto Central S.A. (OCENSA), Oleoducto de Colombia S.A. (ODC) and Oleoducto de los Llanos Orientales, S.A. (ODL) agreed with some senders on financing schemes of 50% of the fees for up to six months, which also include specific grace periods for each company.
Initially, Cenit and its subsidiaries had offered financing for the months of May and June, but after multiple conversations with the senders, it was agreed to extend the relief for another four months. Said financial aid is not subject to minimum invoiced volumes or certain oil prices, thus becoming an important cash-flow relief for oil producers and traders.
In addition to the financing terms, there are important discounted fee alternatives ranging from 6% to 21%, according to the pipeline section and the amount of crude being transported, as a modality that applied to 13 contracts in the past weeks.
Finally, as part of the agreements with the senders, there was also an agreement on the flexibility of nine transportation contracts, depending on specific conditions.
All of aforesaid agreements enable close to 80% of the volumes moved through the systems to rely on at least one of the proposed reductions.
The current crossroads has affected the entire oil industry, including producers, transporters, the refining segment and traders. Aware of this situation, the companies in the transportation segment have ratified their will to find feasible alternatives and arrange solutions with the senders.
These commercial terms offered during this juncture apply to Cenit Transporte y Logística de Hidrocarburos S.A.S. and its subsidiaries Oleoducto Central S.A. (OCENSA), Oleoducto de Colombia S.A. (ODC) and Oleoducto de los Llanos Orientales, S.A. (ODL).