(Reuters) - Colombian oil company Ecopetrol SA aims to drill a total 100 wells by end-2021 in the Permian Basin of West Texas as global oil prices recover, Chief Executive Felipe Bayon said on Monday.
Global oil prices plunged to decade lows, with U.S. West Texas Intermediate (WTI) dropping to negative $40 a barrel on April 20 as supplies ballooned while the coronavirus pandemic ravaged demand.
The majority state-owned company, which entered a joint venture with Occidental Petroleum in November last year, said it plans to drill another 22 wells this year.
The company drilled 22 wells between November 2019 and June, but production slowed during the pandemic, Bayon told the virtual Asia Pacific Petroleum Conference (APPEC).
“By the end of next year we should have over a hundred wells ... Ecopetrol has a portfolio that is largely heavy crudes,” he said. “This is 40 API crude. So it’s very good in terms of balancing the portfolio.”
Crude oil’s density is measured in API gravity. Light crudes produce more high quality fuels such as gasoline and diesel. Heavy crudes require further processing of residues to produce these fuels.
Asia takes the biggest chunk of Ecopetrol’s crude output, and it is currently working on expanding crude oil sales to India and South Korea, he said.
The majority state-owned company was able to avoid production shutdowns during the COVID-19 pandemic as some Chinese refiners are using Colombian crude to meet baseload demand, Bayon said.
Bayon expects Colombia’s gasoline and diesel demand to return to pre-pandemic levels “probably by the end of this year, early next year”, while jet fuel will take much longer.
Reporting by Florence Tan and Koustav Samanta; Editing by Christian Schmollinger and Tom Hogue
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