Petrominerales Has 3 Exploration Plays That Could Double Oil Reserves In 2012
18.05.12
My equity portfolio has been very focused on oil equities for a few years now. Generally I like to stick with companies that operate in the United States and Canada. The reason for this is simple, I just don’t possess the brainpower to fully understand the risks that various foreign jurisdictions hold.
A key rule in successful investing is if you don’t understand something, avoid it.
There is however one foreign country that I do have exposure to and may increase my exposure to. That country is Colombia.
Why Colombia? Isn’t it risky?
Yes, Colombia certainly carries more risk than investing in oil companies that operate in Alberta and Saskatchewan. But it is important to differentiate between the types of risk that an investment in Colombia is exposed to.
Physical Risk – This would be risk to facilities, workers and equipment. Investing in Colombia certainly carries this kind of risk.
Political Risk – This would be the risk that the government expropriates property or cancels existing contracts. You might be surprised to learn that this type of risk has historically been non-existent in Colombia.
Source: Seeking Alpha