4 Min Read
BOGOTA (Reuters) - Colombia has certified about 3.1 billion barrels in oil reserves, including proven, probable and possible reserves, double the country's average thanks to a surge in foreign investment, Mines and Energy Minister Hernan Martinez said on Monday.
In an interview for the Reuters Latin American Investment Summit, Martinez said Colombia also expects to end this year with oil production of 800,000 barrels per day and lift output to more than 1 million bpd of crude by 2011.
"New data has just come out showing we have something like 2.6 billion barrels of reserves... that are proven with development installations in place and of probables," Martinez said. "And we have another 500 million additional barrels in possible reserves that need more work to develop them."
The Andean country reached reserves of around 1.5 billion barrels in crude reserves in the last four years and the increase comes with new discoveries and attractive energy policy and incentives that have drawn investors to Colombia's untapped oilfields.
Colombia, now Latin America's No. 4 oil producer, has seen a "miniboom" in energy investment as security has improved under President Alvaro Uribe. Total foreign direct investment is expected to hit $10 billion this year, up from $2 billion in 2002, when Uribe came to office.
Uribe has sent troops to confront leftist rebels and kidnappings and bombings have dropped sharply after more than four decades of conflict that kept many foreign investors away from a country once branded a failing state.
A June auction of new blocks promises to draw in more investment and bolster production as companies are attracted to the country's promising oilfields, political stability, favorable contracts and judicial security.
In contrast to Colombia, neighboring Ecuador had output of just 486,067 bpd last year. A contract dispute with foreign companies in Ecuador has eased investment in OPEC's smallest member.
Colombia, also a major exporter of coal and nickel, exports about half of its oil production with around 300,000 bpd destined to attend its domestic market. Oil is the economy's principle source of hard currency.
Companies such as Canada's Pacific Rubiales PRE.TO have taken the lead in exploring the country's once abandoned oil fields. The Andean country received $6 billion in foreign investment in oil and mining in 2008 and 2009.
Colombia now has 240 active oil contracts and 120 oil companies working in the country.
In June, Colombia will auction 228 oil and gas blocks in its 2010 Oil Round and is preparing investment of $3.8 billion to expand its infrastructure for oil transport and shipping.
Martinez said he would consider it a successful round if the country auctions half of the blocks on offer. Already 83 companies are registered to take part in bidding to take place in Cartagena.
"Depending on the areas auctioned, and the success in exploration, we could be talking about investments of $1 billion in the next two or three years," he said.
To further bolster security and investment, the minister said, the army is preparing a battalion of soldiers who will transport the oil company seismic results in remote areas where contractors are still vulnerable to rebel operations.
Colombia once reported 100 guerrilla attacks a year on its oil infrastructure. But rebels from the Revolutionary Armed Forces of Colombia have been driven back into remote jungles and mountains by Uribe's security drive.
Writing by Patrick Markey; Editing by David Gregorio