The Colombian Chamber of Oil Goods and Services (Campetrol) published an analysis of global oil operators and found several examples of firms which were able to reduce costs, but still invest in E&P and grow reserves. However, it said Ecopetrol (NYSE:EC) was not one of them.
It has been nearly 20 months since the announcement of the first deep water discovery in the Colombian Caribbean at the Orca-1 well, and the discovery is now going through another level of technical evaluation to determine its potential.
The Colombian Chamber of Oil Goods and Services (Campetrol) expects that the oil sector’s Foreign Direct Investment (FDI) will drop 42% in 2016 to US$4.72B, and has bleak perspectives through 2020 if key policy issues are not addressed.
The fall in oil prices has led to a 13% drop in Colombia’s proven reserves, with 2.002B barrels registered by the Ministry of Mines and Energy (MinMinas). This brings the production/reserves ration down to 5.5 years based on 2015’s average production.
Geopark (NYSE:GPRK) will explore “every piece” of its Llanos 34 block, but does not want to stop there. Its Colombia director Marcela Vaca gave details on its exploration activities, and that it has interest from larger operators and investment funds to form joint ventures.
The Association of Oil Goods and Services (Campetrol) reported one of its biggest drops yet in the use of rigs during March 2016, and authorities urge greater focus on expanding reserves and exploratory activity. But to do so there are several critical obstacles that must be addressed.
The Colombian Association of Oil Engineers (ACIPET) issued a statement regarding the reversal of Hupecol’s environmental license in La Macarena, and warned of a growing stigmatism of the oil industry and its activities. The result is heightened legal uncertainty and a lack of respect for the industry’s professionals.
In a matter of a few days, a blizzard of controversy over an environmental license to proceed with an E&P project near a natural reserve in La Macarena, Meta forced explanations from authorities and an eventual suspension announced by President Juan Manuel Santos.
Although there has been a slight recovery of oil prices to the high US$30 range, analysts believe that Colombian operators need prices at US$45 or higher to reactivate stalled exploration activity.
The president of the Chamber of Oil Goods and Services (Campetrol) Rubén Darío Lizarralde again called on the government for a better response to the industry’s current situation and asked for additonal measures to bolster exploration activity.
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