By Joshua Schneyer and Daniel Bases
Nov 8 Ecopetrol, Colombia's publicly
traded, state-controlled oil company, said on Friday it will
spend as much as $75 billion by 2020 to lift oil and gas
production to 1.3 million barrels of oil equivalent per day
The investment, outlined in a presentation to investors and
the media in New York, would represent a rise of more than 60
percent over output levels of 800,000 boed in the third quarter.
The company said it plans to concentrate on new exploration
and production projects in Colombian onshore and offshore
Javier Gutierrez, chief executive officer of Ecopetrol, said
that around 85 percent of the capital expenditures would be
dedicated to exploration and production projects.
"We have five hydrocarbon discoveries in Colombia ... with
an 83 percent success rate in exploration," Gutierrez said.
"The challenge for the next year is to consolidate the new
(operating) model," he added.
Ninety percent of the new projects will occur in Colombia,
and are expected to mainly be funded through internal cash
In a shift, Colombia has been sending a greater portion of
its oil exports to Asian markets, said vice president of
marketing and sales, Claudia Castellanos.
The biggest export destination for Colombia's mostly
heavy-sour crude is the U.S. Gulf Coast, she said, but shipments
to Asia have risen to 34 percent of exports this year, up from
around 20 percent last year, Castellanos said.
"That number is projected to keep rising," she said.
Castellanos said Ecopetrol's "refineries face structural
challenges. The crude oil has turned heavier and sourer."
However, she said that Colombia is "open to receive a new
investment" in its refining industry. She added that Ecopetrol
is converting its refineries to process more heavy crude.
A conversion project at the country's Cartagena refinery,
which will be mostly done by the end of 2014, should allow
Ecopetrol to increase its per-barrel gross refining margins to
as much as $15-20, up from around $5 at present, executives said
Friday. The project will allow the plant to process up to 95
percent heavy crude, up from around 70 percent now.
As Colombia carries out the refinery conversion projects, it
will need to continue importing refined fuels from U.S. refiners
to meet the nation's daily fuel demands, Gutierrez told Reuters
in a brief phone interview on Friday.
Ecopetrol currently imports around 40 percent of its fuel,
including 40,000 bpd of low-sulfur diesel and 65,000 bpd of
gasoline, he said. The company plans to maintain those levels in
2014, but will "significantly reduce" imports by 2015 as the
refinery upgrades are completed.
In areas where the company has put resources for exploratory
drilling, Rafael Guzman, vice president of E&P technical
development, said the company now expects to add production from
new fields such as Cano Sur and Acacias.
Guzman said the company was close to declaring them
commercially viable, but did not offer figures on reserves at
either field. He added that each could start output of oil by
late 2014, producing up to 25,000 barrels per day each in 2015.
Ecopetrol's pipeline infrastructure in Colombia, including
the export-oriented, 780 km (485-mile), 80,000 bpd Cano Limon
line from Covenas to the Caribbean Sea, has recently been beset
by increasingly frequent attacks from guerilla groups, including
one last month.
According to Ecopetrol executives, the attacks remain a
concern but have only reduced by 8,300 bpd the country's oil
production this year on average, or around 1 percent of the
total. However, that is up from 6,000 bpd in 2012.