Private oil companies to invest up to $4.9 billion in Colombia in 2018

BOGOTA (Reuters) - Private oil companies in Colombia will invest between $4.5 billion and $4.9 billion next year, an increase over 2017 but still far from what is needed to bolster the country’s reserves and production, an industry group said on Wednesday.

The figures would be a total investment increase of 30 to 45 percent over this year, when oil companies spent $2.3 billion on production and $1.1 billion on exploration, according to the Colombian Petroleum Association (ACP), which represents private producers.

The country once earned about a fifth of its national income from oil revenues, royalties and taxation, but that figure fell to nearly zero during the global decline in crude prices and companies sharply curtailed production and exploration.

“We value the process of recuperation of the industry, but it’s a recuperation that is lower than expected and lower than what the country needs to look toward the future,” ACP President Francisco Jose Lloreda told journalists.

“We look at 2018 with moderate optimism - there is interest from companies in making an important investment in production and exploration, that hopefully will be firmed up, but it’s short term. At medium and long term there is great uncertainty that we hope will dissipate,” Lloreda said.

The country will have produced an average of 853,000 barrels per day this year, a 4 percent decrease from 2016, due in part to attacks on oil infrastructure by leftist guerrilla group the National Liberation Army (ELN), Lloreda said.

Investment estimates for next year, which also foresee the opening of between 60 and 70 wells, are based on Brent crude prices staying above $50 a barrel, he said.

The Andean country’s largest oil company is state-run Ecopetrol, which plans to invest between $3.5 billion and $4 billion during 2018.

The government says oil reserves were 1.66 billion barrels at the close of 2016 - equivalent to about five years of consumption.

Despite last year’s peace deal with the country’s largest leftist rebel group, attacks by the ELN, community protests and referendums banning oil exploration and production in certain municipalities remain a threat to the sector, Lloreda said.

Reporting by Luis Jaime Acosta; Writing by Julia Symmes Cobb; Editing by Helen Murphy and Susan Thomas