NATIONALIZATION OF OIL AND GAS ENTERPRISES: NEW TRENDS AND STRATEGIES - THE COLUMBIAN PERSPECTIVE

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development and Investment
(Apr 2009)
CHAPTER 13A
NATIONALIZATION OF OIL AND GAS ENTERPRISES: NEW TRENDS AND STRATEGIES - THE COLUMBIAN PERSPECTIVE
Carlos Urrutia
Brigard & Urrutia
Bogota

Carlos Urrutia-Valenzuela is Managing Partner of Brigard & Urrutia, Colombia's oldest and one of its largest and most prestigious law firms. Mr. Urrutia attended the Johns Hopkins University for two years of undergraduate studies and then transferred to the Universidad de los Andes (School of Law), in Bogota, Colombia to pursue his legal education. He graduated in 1974 and obtained a Doctor at Law degree. In 1975 Mr. Urrutia was appointed Secretary General of the Governorship of the State of Cundinamarca, and subsequently Secretary of Finance. In 1977, Mr. Urrutia returned to private practice at Brigard & Urrutia. During his 30 year career at the firm, Mr. Urrutia has advised clients in a wide variety of matters, concentrating in commercial law, international financial transactions, natural resources (oil, gas and mining), mergers and acquisitions and litigation and arbitration, particularly in the context of complex cost overrun claims concerning energy related matters. In the area of natural resources, Mr. Urrutia assists clients in developing the structure for their projects, provides support in addressing legal and regulatory with government agencies, participates in negotiations related with the terms and conditions of the contracts linked to the projects, and directs the drafting of the underlying agreements. In order to ensure the successful completion of the transaction, Mr. Urrutia works in coordination with other departments of the firm directing due diligence tasks and interacts with members of the Tax Department in devising the optimal tax structures. Mr. Urrutia has advised investors, project developers, mining and petroleum companies as well as banks and financial advisors. His clients are among the leading companies in the areas of oil, gas and mining, power generation, distribution and transmission, as well as international financial institutions with interests in the Colombian natural resources sector. In addition to Spanish, Mr. Urrutia is fluent in English and French.

Contents

I. Background

I. Expropriation in Colombia - Legal Framework

I. Strategies to Mitigate Risks Associated with Nationalization

— Legal Stability Agreements

— Treaties to Promote and Protect Foreign Investments

[Page 13A-2]

Background

▪ Unlike other Latin American countries (Mexico in the 1930's, Peru in the 1960's, Venezuela in the 1970's and more recently Bolivia and Ecuador), nationalization of a mining or petroleum company has not occurred in Colombia.

▪ The Colombian Constitution (Art.332), provides that the State is the owner of the subsoil and of all non-renewable natural resources.

▪ Until 2003, the Colombian state-owned oil company, Ecopetrol, was charged with developing any project for petroleum exploration and...