BOGOTA, June 1 (Reuters) - Colombia will need about $7 billion in annual investment over the next 10 years to bolster oil exploration and avoid a drastic drop in output that would lead the Andean nation to import crude by 2022, the head of the oil industry’s union said on Wednesday.
Output in Latin America’s fourth biggest oil producer has dropped to below one million barrels a day as international oil prices plunge and the industry suffers pipeline attacks from the National Liberation Army (ELN) rebel group.
“The only way to stop the sharp drop in production is with more investment,” said Francisco Jose Lloreda, head of the Colombian Oil Association.
“From 2022, that’s six years away, we will need to import crude to load refineries,” he said.
Output could drop to 940,000 barrels a day this year, he said, down from just over 1 million a day in 2015.
In 2016, the oil industry expects investment of $610 million for exploration and $3.2 billion for output, well below what is needed according to Lloreda.
A loss of oil independence would negatively impact the employment rate and Colombia’s fiscal accounts as the bulk of government revenue comes from taxes and royalties from oil companies.
Proven oil reserves dropped 13.2 percent last year to 2 billion barrels. Lloreda said it is necessary to bring in another 1.3 billion barrels.
“The country doesn’t have the luxury of being able to wait for the reactivation of crude prices to take the urgent measures needed,” he told reporters. (Reporting by Luis Jaime Acosta; Writing by Helen Murphy; editing by Diane Craft)