NEW YORK (Reuters) - Colombia’s state-run oil company Ecopetrol will be ready to start fracking pilot projects in the second half of 2020, chief executive Felipe Bayon said on Wednesday, as oil companies await federal regulatory guidelines for the projects.
The pilots are part of the Andean country’s efforts to determine whether hydraulic fracturing, which breaks up rock formations with pressurized liquid, will be allowed.
Fracking, which environmental activists blame for water contamination, is the subject of an ongoing lawsuit in the country’s top administrative court, which has ruled that pilot programs can go ahead while the case proceeds. Ecopetrol is a co-defendant in the suit.
Four projects could bring in $5 billion annually in investment once they are producing oil, industry leaders said on Tuesday. Supporters consider fracking key to Colombia’s energy self-sufficiency. The country currently produces about 860,000 bpd of oil.
Bayon said there could be more than four projects undertaken.
“I think in the second half of next year, we will be ready to start drilling,” Bayon told Reuters in an interview in New York. “The ministry is working on the protocols. They’ll take some months, those will come out, and then we can apply for the licenses.”
Bayon declined to specify which companies Ecopetrol might work with on the projects. In addition to current partners, new entrants may be possible.
“There are a lot of companies that are not currently in Colombia doing unconventionals that would like to be in Colombia,” he said. “We have several pilots that we are looking at.”
Bayon would not specify the exact locations of the projects, for fear of encouraging land speculation in surrounding areas.
“This is not about us rushing it, this is about doing it well. This could be the next 20 to 30 years of energy security,” he said.
Spending on the projects will come from the $500 million the company has already earmarked for development of non-conventional deposits, he said.
Ecopetrol’s joint venture with Occidental Petroleum Corp in Texas’ Permian Basin will allow the company to develop the capabilities it needs for tapping shale deposits in Colombia in the future, he said.
“We are going to be teaching (people), create capability and some of them will help deepen our capability as we go back to Colombia,” he said.
Reporting by Jessica Resnick-Ault; Writing by Julia Symmes Cobb; Editing by Alistair Bell