BOGOTA (Reuters) - Colombia’s state oil company Ecopetrol SA will focus exploration efforts in the next few years on unconventional deposits in the center and north of the country in a bid to increase reserves, its chief executive said.
The region has strong potential for light crude and appears to have significant reserves, Ecopetrol CEO Juan Carlos Echeverry said in an interview.
Ecopetrol will also continue efforts to develop its mature fields to boost recovery, as well as explore offshore in the Caribbean, the United States, Mexico and Brazil, and seek companies for possible purchase.
Unconventional exploration will be carried out in the Magdalena Medio, an area in Colombia where the La Luna and Tablazo geological formations converge and could have 30 billion barrels of new oil, Echeverry told Reuters on Friday.
“After the United States and Vaca Muerta in Argentina our non-conventional play seems to be the most substantial in terms of oil in the Western Hemisphere,” Echeverry said at his Bogota office, adding that experts calculated recoverable oil could be between 2.5 and 7 billion barrels.
Unconventional deposits are rock formations that contain hydrocarbons in geological conditions that do not allow the movement of fluid, which can make them more difficult and costly to extract.
At the end of 2016, Ecopetrol’s reserves stood at 1.6 billion barrels of oil equivalent, representing 6.8 years of consumption.
Echeverry said the search for unconventional deposits, in which companies like Occidental and Shell are interested, should be the most important project of the next decade for Colombia as it would raise reserves and create thousands of jobs.
“We are not unconventional experts and so we would seek partners with know how,” said Echeverry, 54, a former finance minister.
Separately, Ecopetrol has high expectations of entry into Mexico after winning two blocks in June to explore and produce hydrocarbons in shallow water in partnership with Petronas and Pemex, he said.
Ecopetrol produces more than 60 percent of Colombia’s oil and has presence in Brazil, Peru and the United States and Mexico. It owns Colombia’s two largest refineries and most of the South American country’s pipeline and pipeline network.
Echeverry ruled out issuing shares to raise funds for its expansion. More than 88 percent of the company is owned by the government and the remainder held privately.
“We don’t contemplate stock issuance in the short term,” he said, highlighting the company’s cash position of $3.48 billion at the close of the first half of 2017.
Additional reporting by Helen Murphy; Writing by Helen Murphy; Editing by Andrew Hay