BOGOTA (Reuters) - Colombia’s President-elect Ivan Duque on Wednesday named Maria Fernanda Suarez as mining and energy minister when he takes office next month, a role that will require her to bolster oil output to help a weak economy and settle messy mining disputes.
Suarez, 44, is currently executive vice president at state oil company Ecopetrol. She served as director of public credit at the finance ministry and as vice president of investments for the Porvenir pension fund. She has also held senior positions at Citibank, ABN AMRO and Bank of America.
Suarez has a Masters degree in public policy from Georgetown University. She will replace German Arce on Aug. 7.
“She has a brilliant resume in the public and private sectors,” Duque said in a statement.
As mines and energy minister, Suarez faces a difficult task as Colombia struggles to increase oil production to help increase revenue and stimulate a sluggish economy after years of weak international oil prices.
“With her, we will promote greater diversification of national energy, efficiency and competitiveness in the sector, provide energy security for Colombia, and social and environmental responsibility in all energy mining production sectors,” Duque said.
At current rates of production, Colombia has less than six years worth of oil reserves - about 1.8 billion barrels - the energy ministry says, and urgent investment in exploration is needed to replace reserves.
Duque’s solution to dwindling oil reserves is to encourage investment in exploration, which he says could provide years more oil production, and give tax relief to the sector.
He has also pledged additional investment at state-run Ecopetrol’s refineries to allow exports of more higher-value derivatives.
Still, with the economy growing at an expected pace of just 2.7 percent this year and a budget deficit that needs to be reduced, funding such expenditure may be tough.
The Colombian Petroleum Association (ACP), which represents private oil companies, says the industry needs to spend about $7 billion a year just to keep output between 800,000 and 860,000 barrels per day.
In a presentation on Wednesday, the ACP said oil companies could invest $34.7 billion over the next five years to help growth in the economy and boost reserves by about 2 billion barrels, but tax cuts per barrel and legal security are needed.
“We need to create and keep conditions to invest around $7 billion a year in exploration and production of hydrocarbons,” said Francisco Jose Lloreda, ACP president.
“It’s necessary that we have a fiscal regime that’s more competitive, that the royalty system is reformed so that its distribution is more equitable and fair with producing regions.”
Oil companies are already grappling with security concerns as well as local referendums - on whether to allow mining in certain areas - and environmental court rulings that have stymied major mining projects in Latin America’s fourth-largest economy.
A recent paper by the ACP, which represents private crude producers, warned that planned referendums put one-fifth of oil production at risk.
Reporting by Helen Murphy; editing by Nick Zieminski and Diane Craft