Responsible Management a Must for the Oil Industry: Oleum

Q: How have your investment plans evolved over the past year?

A: 2022 was a good year because crude oil prices were above our expectations. After the adjustments related to the pandemic, when crude oil prices fell, 2022 helped us recover. We moved our 2022 investment plans to 2023 and we are now buying machinery and equipment and investing in the wells that we are going to drill this year. 

We have also been working hard to refine our investment plan to be more precise in our investments. At the end of the day, we are looking for maximum cost reduction and acquiring the best technology. After some very difficult years,our finances were compromised but 2022 helped us stabilize our investment plans and allowed us to have a much stronger approach for 2023.

Q: How do you stay on top of technological innovations?

A: It is about finding the middle ground between the top technology and the cost. We are looking for a cost-benefit that provides energy efficiency and allows us to comply with the care of the environment while achieving a higher production at a lower cost. We are present in the US, Mexico and Colombia, which also allows us to be aware of what is available in these countries to improve and streamline costs.

Q: How have your ties to landlords and communities evolved and how have you navigated regulation over the past year?

A: We have a very good relationship with the communities where we work. We have always been open to negotiating with them and listening to their needs. Once we understand their needs, we go back to them and bring our capabilities to the table to discuss what we are able to do for them. We try to make the community feel comfortable with us and to help them understand that we are not using resources excessively. For example, we are committed to maintaining the roads we use so that they remain in the same state in which we found them. We also work closely with the authorities, with municipal presidents and community leaders to foster a healthy relationship.

With landowners, we have a more direct relationship. We know what our obligations are and we fulfill them. We are in constant communication with landowners. If there is a problem, they have a direct line to us. We do not let problems go by, neither with the owners nor with the communities.

Regarding regulation, we basically stay out of the political arena because it is not our area. Governments change, so we simply try to understand how they interpret the laws and regulations. The people who are in charge of the regulatory bodies may have different interpretations between them. This risks creating uncertainty. It has been complicated but we try to stay close to the authorities and communicate with them. We have had meetings with the CNH commissioners, for example, to understand the regulation and to issue our requests.

Toward the end of last year, we had to have our Transition Program ready. We requested a modification to the program, which we had already submitted to CNH, to extend it for two years. As a result, we  now have regulatory clarity of our obligations for all of 2023 and 2024. At the end of the day, this reduces risk because we already have regulatory certainty and we can make clearer investments and follow our operational path with greater clarity.

Q: How does Oleum approach risk management regarding its ESG commitments?

A: We have our ESG objectives clearly identified. We provide weekly follow-ups to our operations team regarding regulatory issues. We do find surprises but with weekly monitoring we prevent these problems from extending or developing. We have a multidisciplinary group that is on the lookout and reviews the issues with senior management so that everyone is aware of where we are and where we want to go next week. These weekly meetings help us understand what our commitments are and what our deadlines are as well.

Q: What is the industry’s role in the energy transition?

A: Companies must be responsible in how they exploit natural resources; by eliminating emissions and flaring, for example. As a company, we are clear about fulfilling our responsibility to avoid damaging the environment and we are fully committed to that. We have an environmental and social responsibility to move toward the energy transition. 

Oleum Energy explores and develops hydrocarbon deposits. As a brand of Cosmos Global Holding, Oleum aims to be a leader in the energy sector by prioritizing sustainability and innovation. The company engages with local communities and adopts new technologies to increase efficiency and safety.