Calgary-based Parex Resources Inc. and its Aguas Blancas oil field in Simacota, Colombia

Published by Brent Patterson on

Calgary-based Parex Resources Inc. operates the Aguas Blancas oil field in the municipality of Simacota, Santander in northeastern Colombia.

In September 2015, Energía 16 reported: “The Colombian state-owned oil company Ecopetrol has entered into an agreement with the Canadian Parex Resources in order to increase reserves and production in Aguas Blancas field.”

That article also notes: “The company wants to … increase production in that field to 10,000 barrels of oil per day in 2020.”

Then in August 2016, Vanguardia reported on community concerns about fracking and that: “Ecopetrol assured the neighborhoods Guayabal, El Diviso La Colorada, Aguas Blancas Baja and Aguas Blancas Alta, in the municipality of Simacota … [that] unconventional techniques will not be used [by Parex in Aguas Blancas].”

By January 2017, Parex announced: “Parex has completed the drilling of the first 4 wells of an initial 15 well drilling program at Aguas Blancas.”

That statement noted that “two development wells (AB-26 and AB-32) and two appraisal wells (AB-9 and AB-14) have been drilled” and further noted that the “AB-26, 14 and 32 wells will be tested in Q1 2017.”

It also stated: “Parex plans to operate a continuous 10 well drilling program through Q1 and Q2 2017 at Aguas Blancas, and upon receiving the environmental permits for new drilling pads, Parex plans to drill an additional 5-8 other wells prior to year-end 2017.”

Then in April 2019, Reuters reported: “Colombia’s state-run oil company Ecopetrol will split its participation in three oil fields equally with Canada’s Parex, which will operate the fields, the government said.”

That article adds: “Investment in at least 15 wells in the Aguas Blancas, Boranda and De Mares fields in northeastern Colombia will reach at least $150 million, the national hydrocarbons agency (ANH) said in a statement.”

The Vanguardia article on this quotes Rafael Pinto, vice president of government affairs for Parex Resources Colombia Ltd. stating: “This transfer is very important for us because it allows us to have legal certainty about our investments and also open the way to continue doing business in Colombia.”

And in its Financial Statements for the interim period ended March 31, 2020, Parex noted: “During Q1, 2020, total drilling and completion costs were $67.9 million of which the majority related to drilling, completion and capitalized workover costs at Block LLA-34, Cabrestero Block, Aguas Blancas and CPO-11 block.”

Community concerns, Export Development Canada support

Parex has affirmed its commitment to “Strengthening Human Rights protection mechanisms” and that it: “has guidelines for formulating and implementing a Human Rights Policy based on the United Nations Guiding Principles on Business and Human Rights, the Voluntary Principles on Security and Human Rights, and the Global Compact Principles.”

And yet the Yariguíes Regional Corporation Group of Extractive, Environmental and Social Studies of Magdalena Medio (CRY-GEAM) began to highlight emerging concerns shortly after Parex started drilling its first wells in the area.

CRY-GEAM posted to Facebook this video in January 2017 with concerns about the absence of needed environmental documents and these photos in April 2017 expressing concern about a flipped truck and runoff into the Colorada River.

In April 2017, CRY-GEAM also posted this video on Twitter with the text: “Parex in Simacota, Campo Aguas Blancas, without archaeological management plan, without environmental permit, above the law and communities. Who responds?”

Despite this, Export Development Canada, the Government of Canada’s export credit agency, has provided financing and support to Parex including: $50-100 million (27-05-2019): $50-100 million (22-02-2019); and $25-50 million (07-05-2018).

Fracking announcement coming in September-October

Beyond the concerns expressed about Parex and Aguas Blancas, Reuters reported in March 2019: “At least five companies are interested in six fracking blocs in Colombia…” In that article, Colombian Mines and Energy Minister Maria Fernanda Suarez named Parex as one of the companies interested in the fracking blocs.

In November 2019, Rigzone further confirmed: “Leading energy firms with fracking expertise including ExxonMobil, Conoco Phillips, Parex and Ecopetrol have expressed their interest in starting pilot fracking projects” in Colombia.

That contract will be awarded soon.

On June 11 of this year, Business News Americas reported: “Colombia is on track to award contracts for fracking pilots this year as the government fast tracks plans for unconventional oil and gas drilling, according to a senior energy official.”

That article quotes Armando Zamora, the head of national hydrocarbons regulator ANH, who says the contracts will be awarded in September or October.

PBI & CREDHOS

PBI-Colombia accompanies the human rights organization CREDHOS. While on an advocacy tour in Canada in November 2019, CREDHOS president Iván Madero Vergel raised concerns about Parex. PBI-Canada remains attentive to these human rights concerns in relation to Aguas Blancas and the fracking pilot projects.

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