- Title: COLOMBIA: Oil industry booms
- Date: 26th May 2010
- Summary: VARIOUS OF WORKER WALKING BY OIL STORAGE TANK YOPAL, COLOMBIA (RECENT) (REUTERS) VARIOUS OF OIL STORAGE TANKS VARIOUS OF WORKER STEERING OIL TANK
- Embargoed: 10th June 2010 13:00
- Keywords:
- Location: Colombia
- Country: Colombia
- Topics: Economic News,Energy
- Reuters ID: LVA5OSZ420VU6ADBWKOVRFZKW1VJ
- Story Text: Viewed from the air, the Rubiales oilfield spreads like a small village in the heart of Colombia's flatlands with huge oil tanks and its pipelines stretching across the plains.
The bustling camp has come a long way since leftist FARC guerrillas torched its grounds and kidnapped its engineers in the remote area that was once a bastion of the rebel's four-decade-old insurgency against the state.
After a few years of abandonment with production reduced to a trickle, Rubiales is now a symbol of Colombia's newly reactivated oil industry and the country's largest producer of crude that once again has foreign operators clamoring for contracts.
"This has changed a lot over the course of a few years, even from the production point of view. When we got here they were producing 800 barrels a day. Today we are producing more than 1,200 barrels a day. In terms of security, there was no army. Basically there were just illegal armed groups. Today, thanks to the private security we have and the security provided by the Colombian Armed Forces we have the highest producing oil field in Colombia and the safest," said oilfield supervisor German Hernandez.
Latin America's number 4 crude producer, Colombia is enjoying a "mini" boom thanks to geological promise, improved security under President Alvaro Uribe and the political and legal stability that make it an oil prospector's dream, executives say.
Guerrilla violence and armed gangs caught up in cocaine trafficking are still a risk and poor infrastructure a challenge.
But the country's under-developed oilfields and the government's pro-business incentives are proving a winning combination that has turned Colombia into a destination to rival mainstream oil-producing countries.
Colombia recently doubled its estimates of proven to possible reserves to 3.1 billion barrels. That compares with OPEC members, Ecuador at 3.8 billion and Venezuela with 99.2 billion in 2008, according to a B.P. energy review.
But at nearly 800,000 barrels per day, Colombia is already pumping almost twice as much oil as Ecuador and its output will hit 1 million bpd next year thanks to foreign investment.
Colombia has plans to invest $4 billion U.S. dollars in oil infrastructure to reach that goal, mainly in improving pipeline and transport networks.
"The infrastructure though is going to be, if Colombia is going to hit a million barrels a day of domestic production, is going to be a bottle neck. It is approaching 800,000 barrels a day today, to get that extra 200,000 barrels a day it really needs that new infrastructure to get that oil out of the country," said oil and gas analyst from the Calgary-based CANACCORD, Frederick Kozak.
Much of this change came about under Uribe, a hard-liner who made stamping out Colombia 's violence and drawing investment the almost singular mission of his eight years in power. He steps down this year after two terms with his popularity high.
Uribe's U.S.-backed war on FARC drove the armed groups back into rural areas and kidnapping, bombings and massacres dropped sharply as troops benefited from more mobility with helicopters and better military intelligence to track down rebel units.
His security and business policies are so core to the shift in Colombia that leading candidates for the May 30 election, former defense minister Juan Manuel Santos and two-time Bogota mayor Antanas Mockus, say they will guarantee continuity, making investors more comfortable.
Around 120 companies are already working the country's oilfields and investing in Colombia's energy industry providing the backdrop for sustained growth.
"Factors such as what I would say are mainly the return of confidence from foreign investors. Mostly Canadian capital, European capital, and American capital, along with the clear security improvements implemented by this government. All of these factors, the sanctity of contracts, and the transparency gained with the creation of the national hydrocarbon agency. This has all allowed for the reversing of the declining curve and have generated new production and fresh reserves," said the executive vice-president of Canadian Alange Energy, Jose Luis Acebedo. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None