Exploration & Production
Following a period of decline in proved reserves and production during the early 2000s, Colombian exploration and production activity has recovered and production is currently at an all-time high. According to the US Energy Information Administration, proved reserves stood at 1.9 billion barrels at the end of 2011, giving Colombia the fifth largest proved oil reserves in Central and South America.
The country produced over 930,000 barrels per day in 2011. This represents a more than 72% increase over 2005 production numbers. The resurgence in production growth can be attributed to two main factors; the re-organization of the sector and improved security.
The re-organization of the sector dates back to 2003, when the National Hydrocarbons Agency, or ANH, was established as a response to decreasing reserves. The improved security situation, including dramatic falls in kidnappings and attacks on infrastructure, has allowed for greater exploitation of heavy crude oil areas and increases in production at existing fields.
Colombia has 23 sedimentary basins, both on- and off-shore. Of these, 4 basins account for over 99% of the countryâ€™s current production. The Llanos Orientales, Valle Medio del Magdalena, Valle Superior del Magdalena, and Caguan-Putumayo basins account for approximately 73%, 15%, 8%, and 4% of crude oil production respectively. While marginal production also exists from the Catatumbo, Cordillera Oriental, and Valle Inferior del Magdalena basins, much of the country remains unexplored.
There are great opportunities because there are so many geological basins that have not yet been explored.
Not only is Colombia poised to break the 1 million barrel per day mark in 2012, but production is also set to grow substantially during the rest of the decade.
Weâ€™ll continue increasing production of oil and gas and we should be around 1.4-1.5m barrels per day by the end of 2014. I think this is going to bring a lot of positive things to the industry.
In the short and medium term, further exploration in existing fields and the implementation of improved technology will account for the majority of growth in reserves and production.
The best opportunities that we have in the energy sector in Colombia will be driven by exploration and technology.
Significant resources are being expanded on exploration, with the total investment in drilling expected to come in at $770m in 2012 alone. The number of exploratory wells drilled in the country has increased more than 3 fold, from 35 in 2005 to 126 in 2011. In the years to come, the ANH plans to increase exploration activity even further, with a goal of 173 exploratory wells to be drilled in 2014. The success rate of exploratory wells drilled in Colombia over the last 5 years has been in the 41% - 56% range.
Enhanced Oil Recovery (EOR)
In addition to further exploration, the implementation of EOR techniques will be vital to increasing recovery rates from currently producing heavy oil fields. One such initiative is already underway, spearheaded by Ecopetrol and Pacific Rubiales Energy. The two companies are carrying out a pilot project using Synchronized Thermal Additional Recovery, or STAR Technology, with the hopes of eventually implementing STAR at Rubiales field, the countryâ€™s largest field.
With our primary techniques, the recovery that you can achieve is only about 15% to 16% of the oil in place. Through implementation of the STAR Technology, we can increase the final recovery of the field to 45% â€“ 50%.
Technology and further exploration of existing basins will account for the majority of near-term growth, but the long-term growth prospects lie in the large parts of the country that still have not been explored. According to Ecopetrol estimates, Colombiaâ€™s potential reserves could be as high as 47 billion barrels of oil equivalent.
Further exploration activities will shed light on the exact magnitude of Colombiaâ€™s reserves. In the meantime, the country remains focused on crossing the symbolic 1 million barrel per day milestone in 2012 and moving well beyond the 1 million mark in the remainder of the decade.
We hope to end the decade with 1.5m barrels of oil per day.