BOGOTA, Sept. 25 (UPI) — Bolstered by improved security, a more favorable regulatory system and tax incentives, Colombia’s oil production is on the rebound.
“From Mexico down to Argentina, in all the countries that have any kind of oil and gas deposits, the trend in the past few years has been to increase the role of government, either directly or indirectly,” said Joydeep Mukherji of Standard & Poor’s, The Financial Times reports.
“But Colombia has systematically opened up its oil and gas sector. They’ve separated the oil company from the regulatory job it used to do, set up an independent regulator and put in a level playing field between government and companies. The results speak for themselves,” Mukherji said.
As of July, the country’s crude oil output rose to an average 657,000 barrels a day from 588,000 barrels a day in the same month last year. By the end of this year, it is expected to rise to 700,000 barrels per day, Ecopetrol, the state-controlled oil company announced Sept. 14.
President Alvaro Uribe is even more optimistic for the future. “I want to derive some goals from the way things stand today: first, that Colombia will have oil while the world uses oil. The second objective, that Colombia will produce a minimum of 1.6 million barrels of oil per day and substantially increase gas production,” he said last week at the inauguration of a pipeline.
Uribe said Colombia is “a nation that was dismissed as an oil-producer, that others said would never have enough oil after the year 2008 and that now begins to have a much more promising panorama that lets us set much more ambitious goals.”
The high point of Colombia’s oil production was in 1999 when it reached 816,000 barrels a day after the discovery of two large oil fields, Cano Limon and Cusiana. But over the next decade, production steadily decreased amid a wave of oil pipeline attacks by leftist rebels, falling to 526,000 barrels a day in 2005. Last year there were 32 such attacks, compared with 261 in 2001.
According to recent statistics from the U.S. Energy Department, Colombia is the 13th largest supplier of oil to the United States. In May it shipped an average of 243,000 barrels of crude daily.
Colombia, Latin America’s fourth-largest producer after Mexico, Venezuela and Brazil, is “ideally placed geographically to become an important exporter,” said Fred Kozak, an energy analyst at Canaccord Capital Corp., a Calgary, Canada, investment firm, the Los Angeles Times reports.
With a lower share of oil profits claimed by the government, Colombia is also attracting investors. Exploratory oil wells drilled in Colombia totaled 98 last year, up from only 12 wildcat wells in 1999, said Alejandro Martinez, president of the Colombian Petroleum Association, the Times reports.
The Colombian government announced Wednesday it is considering selling as much as 10 percent of its stake in state oil company Ecopetrol and using the funds to finance a multimillion-dollar road-building program.
Copyright 2009 by United Press International