Ecopetrol Sees Recovery in 2015 Oil Output

Posted by Michelle Howard September 19, 2014

Colombia's top energy company Ecopetrol is targeting production of 1 million barrels of oil equivalent per day in 2015, a steep recovery over this year, clouded by rebel attacks on infrastructure and exploration failures.

Ecopetrol chief financial officer Magda Manosalva told a conference in London that while the primary focus would remain on Colombia, the company also planned to bid for fields in Mexico, which is opening up its energy sector.

"We see the internationalization as a chance to diversify," Manosalva said, adding that the firm would focus on available onshore fields.

Rebel group attacks pushed Ecopetrol's production to an average of 750,000 barrels of oil equivalent per day so far this year -- well below the nearly 1 million in 2013. The company is also working with the Colombian government to streamline exploration approvals that can take up to two years to receive.

Ecopetrol invests roughly 80 percent of its capital expenditure into exploration, said Manosalva, adding the number was unlikely to change in future years. She declined to say how much the firm would invest in 2015.

"We have been investing most of our capital expenditures in exploration ... but we have not had a material discovery," she said.

Without new gas discoveries in particular, Manosalva said the company would "have a problem supplying new demand" by 2018.

She also said the new Cartagena refinery was on schedule for completion.

Toronto-listed oil producer Pacific Rubiales, whose production mostly originates from Columbia, told the same conference improved security was key to unlocking the country's oil potential.

"The better and the sooner we sign this peace agreement with FARC ... more areas will be freed up for exploration," said Jose Francisco Arata, president of Pacific Rubiales.

Though security has improved massively in the last 10 years due to increased military pressure on the leftist FARC and ELN guerrilla groups, the rebels have intensified bomb attacks on oil pipelines, with 259 attacks in 2013 alone.

"We need to increase investment for exploration. We have to reverse this trend ... 100 exploration wells is not enough. We should be drilling 400-500 exploration wells," said Arata.