June 16, 2017 / 6:02 PM / a month ago

Public oil drilling referendums causing 'apprehension,' says Ecopetrol exec

3 Min Read

NEW YORK, June 16 (Reuters) - Colombia's state-run oil company Ecopetrol SA is paying particular attention to an upcoming wave of public referendums on crude production, the company's chief operating officer, Felipe Bayon, said Friday.

After residents of Cumaral municipality in Meta province voted by a large majority to ban oil exploration, drilling and production, Bayon said that the votes ahead are worrisome for the company.

"It’s a source of apprehension and something we need to pay attention to," Bayon said during an interview in New York. "We need to understand where communities are coming from."

Additionally, Bayon said Ecopetrol needs to increase its level of interface with communities who have upcoming referendums on drilling and explain the benefits of drilling for the nation and how Ecopetrol plans to do it. Many residents, he said, have not gotten all the relevant information that they need.

"It's an opportunity and we'll need to do better," Bayon said. "But it’s a change."

Last month the Colombian Petroleum Association (ACP) warned that the referendums are a threat to the country's oil industry.

"Legal uncertainty will lead to a nosedive for exploration and production activity in Colombia," ACP head Franciso Jose Lloreda said. "There won't be investment or exploration if a wave of public votes continues."

Cumaral's vote was the first public referendum on banning oil exploration and Lloreda warned that further votes against drilling could lead to the delay or cancellation of millions of dollars in investments key to averting a fall in reserves.

Ecopetrol also has faced widespread protests by local residents over hiring practices. Crude production at the country's La Cira-Infantas oilfield has fallen more than 80 percent during the last week, the company said in May, as a result of the protests.

Output at the site, located in the northeastern part of the country and jointly operated by Ecopetrol and U.S.-based Occidental Petroleum Corp, has fallen from 40,000 barrels per day (bpd) to 7,300 bpd as residents block roads, Ecopetrol said.

The company's oil production has also been a target of guerrilla group ELN, which has bombed a number of its pipelines. Bayon said that Ecopetrol has participated in the Colombian government's peace negotiations with ELN rebels in regard to the attacks.

"Ecopetrol has been very proactive in terms of helping some of these communities that have been affected by ELN," he said. "Clearly the attacks on government pipelines need to stop."

Reporting by Dion Rabouin; Additional reporting by Luis Jaime Acosta; Editing by Lisa Shumaker

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