Colombia needs at least $120 billion in investment over the next ten years to reach and sustain oil production of more than 1 million barrels per day (bpd), the country’s private oil association said on Wednesday.
Latin America’s No. 4 oil producer is ramping up petroleum output at existing fields, hoping to hit 1 million bpd this year, but a series of attacks on oil installations and social protests have prevented Colombia from reaching its goal so far.
“We hope to reach (1 million bpd this year), but the fundamental goal is to sustain those production levels in the future which will require new and bigger investments in existing fields and new discoveries,” Alejandro Martinez, president of the Colombian Oil Association, told reporters.
Martinez said that oil output had not hit the government’s goal, mainly due to 60,000 bpd of production being locked up due to delays in environmental licenses, while attacks and security problems have also played a role.
In May, oil output was 936,000 bpd.
Energy Minister Mauricio Cardenas told Reuters in late May that he expected crude output to reach 1 million bpd in about two months, the time it will take for two “important” oil fields to get environmental permits.
Colombia received almost $15 billion in foreign direct investment last year, up from just $2.1 billion in 2002 when guerrilla groups such as the Revolutionary Armed Forces of Colombia roamed across great expanses of mining territory.
Despite massive security gains over the last decade, Colombia still faces a resilient insurgency that targets oil and other economic infrastructure while the petroleum and mining boom brings new pressure on companies from communities.
Delays in environmental licenses are one of the chief complaints by oil and mining firms in Colombia, which is trying to find a balance between environmental concerns and an influx of investors into the extractive industries.
Communities around oil and mining ventures complain about pollution and infrastructure damage and say that billions of dollars in investment have done little to improve their lot in one of Latin America’s most unequal countries.
Martinez said that Colombia needed to boost its reserve-to-production timeframe to 10 years from 8 years currently – Colombia has proven reserves of more than 2 billion barrels.
“The most important goal is to ensure that reserve-production levels are increased so the significant contribution that today’s oil sector is giving to the national economy is sustainable,” he said.