BOGOTA (Reuters) - Oil companies operating in Colombia plan to invest almost $5 billion next year, up 14 percent from this year but still far from what the Andean nation needs to bolster its production and reserves, the Colombian Petroleum Association (ACP) said.
Oil companies invested $4.35 billion in 2018, most of which went into production and some $800 million into exploration, the association, which represents private oil companies, said on Thursday.
Francisco Jose Lloreda, head of the association, told reporters that exploration needs to be increased since investment remains at historically low levels with only 1,100 square kilometers (424 square miles) of seismic tests undertaken.
“We have to sound the alarm, today’s exploration is the production of tomorrow,” Lloreda said in Bogota, adding that companies are not investing in seismic testing because of opposition from local communities to exploration.
The government has not awarded new areas for exploration in the last four years.
Colombia’s proven oil reserves were 1.78 billion barrels at the end of 2017, equivalent to 5.7 years of consumption.
Lloreda projected production of 890,000 barrels per day of oil equivalent for 2019, more than the 865,000 barrels of oil equivalent per day expected this year.
Next year’s investment projections, which include the drilling of between 65 and 70 wells and 3,200 square kilometers (1,236 square miles) of seismic testing, were made with expectations that the price of Brent crude remains at around $60 per barrel, Lloreda said.
“There’s greater volatility than expected and that leads companies to be more cautious in investment because the price panorama is not clear,” he said.
Despite better security since a peace agreement with the Revolutionary Armed Forces of Colombia (FARC) rebel group, the oil sector continues to be concerned about social protests against exploration, legal instability and attacks by rebels of the National Liberation Army (ELN), Lloreda said.
Reporting by Luis Jaime Acosta; Writing by Helen Murphy; Editing by Phil Berlowitz