Manuel Chinchilla Da Silva, Venezuela: Ecopetrol plans to invest between 12 and 15 billion dollars to increase production between 2019 and 2021

The Colombian oil company estimates to bring its production closer to one million barrels a day of oil

For gas projects in basins identified in the Caribbean Sea, an investment of 320 million dollars is estimated

With a view to increasing production, Colombian state-owned oil company Ecopetrol has announced that it plans to make an investment of between 12 and 15 billion dollars during the 2019–2021 period, focusing on the exploration and development phases, as well as pilot plans for oil and gas production, both onshore and offshore, mainly in Colombia, but also to a lesser extent in the United States, Mexico and Brazil, according to the information published in the Macroeconomics and Markets report of the Corficolombiana consultancy, corresponding to July 2019.

Of the estimated amount in investments for the next three years, about 90 percent will be invested in Colombia and will be destined to seismic projects for existing fields, techniques tending to increase the recovery factor, pilot plans for the development of unconventional production and several offshore projects.

In this investment plan, Ecopetrol is budgeting a total of $ 500 million for unconventional projects for the production of oil and gas in the Magdalena River, the Eastern Plains, Catatumbo and Cesar regions. In addition, an investment for the order of 320 million dollars in the Caribbean Sea is contemplated for gas projects in basins already identified.

Results and Projections

For the Colombian state oil company, 2018 was an exceptional year in terms of revenue, production and reserves. Net income exceeded 11 trillion pesos, daily production was above 720 thousand barrels, achieving the goal set between 715 and 725 thousand barrels; In addition, 307 million in reserves were added, to close the year with proven reserves of 1,727 million barrels of oil.

However, the company is committed to increasing production to recover the average quota reached between 2013 and 2015, when it was around one million barrels per day. For this, Ecopetrol plans to add between 30 and 50 thousand barrels per day in terms of secondary and tertiary production, which stood at 23% of the total in 2018 and is estimated to increase to 36% by the year 2021. In what From 2019, the company has already achieved an increase compared to 2018, reaching an average of 890 thousand barrels per day.

Global Investments and Price Variation

Ecopetrol’s strategy to increase its investments favors the country’s economic outlook, boosting Foreign Direct Investment (FDI) flows destined for oil and gas, which grew 17% in the first half of 2019 compared to the same period of the year above, when measured through the exchange balance.

Global oil and gas investments would amount to 553 billion dollars in 2019, a figure that stands at 7.6% above 2016, the year in which the minimum of this decade was recorded. Although the numbers are on the rise, global investments are still well below the maximum recorded in 2014, when investments reached 901 billion dollars, thanks to the cycle of high crude oil prices and wide international liquidity.

The decline in international prices between 2014 and 2016 affected the flow of global investments. However, the current recovery and good expectations for the future are due to the 60% recovery in the Brent average reference price, which went from $ 45 per barrel in 2016 to $ 72 per barrel in 2018, in addition to clear guidelines tending to achieve efficiencies in costs and expenses in the industry such as optimization of mixtures, maintenance of subsoils and reduction in drilling times.