Colombia’s state oil company Ecopetrol and the National University in Medellin have invested $740,000 in NASA-grounded oceanographic technology research development for off-shore hydrocarbon exploration in the Carbibean.
Ecopetrol, together with the National University in Medellin, are nearing completion on “a project together that will let them anticipate the behavior of winds, sea currents, and waves in the Colombian Caribbean,” so that it can better explore for hydrocarbons in the Caribbean sea, according to Ecopetrol.
The technology Ecopetrol hopes to achieve together with National University depends on historical data collected by NASA satellites, and according to Ecopetrol, the oil company has plans to use the technology development project for other sectors, like “fishing and ports.”
Andres Fernando Osorio Vargas, Professor at the National University in Medellín, told local reporters. “with numeric modeling you can achieve a precision close to 95%.” More precision means less risk, and in an industry where missed exploration drills can mean billions of dollars of lost investment, Ecopetrol’s move is a careful step toward off-shore exploration.
Latin America is scrambling to feed the world’s energy appetite, which has grown significantly with Asia’s economic rise. In response to the commodities boom, Colombia’s Ecopetrol has begun to explore in the Caribbean, and off the coast of Brazil over the last decade in an effort to compete with other strong regional players, like Brazil’s Petrobras and Mexico’s PEMEX.
But just as much as there is competition, there are signs of collaboration too. At the end of July, Ecopetrol announced an agreement with the Mexican state oil giant PEMEX that Ecopetrol says sets out “to generate options of technical, academic, scientific and administrative cooperation when it comes to exploration, production and refining.” The cooperation falls in line with its Caribbean project, though no mention of shared investment is mentioned.
Much of PEMEX’s opportunities, according to a recent report from The Economist, lie in deep waters of the Gulf of Mexico. PEMEX has a history of shallow-water drilling. But just last year they struck their first proven deep-water reserve in the Gulf of Mexico. And if Mexico’s new President Enrique Peña Nieto mints the energy reforms he has promised, PEMEX could receive the same wave of new policies and investment that began to revolutionize Colombia’s energy landscape under President Alvaro Uribe (2002-2010).
Ecopetrol is a relatively small player relative to others in the region. And its earnings have slipped recently. But that hasn’t mattered too much for investors, many of whom have invested in Ecopetrol as an alternative to Brazil when Petrobras’ momentum seemed to be getting stuck in the middle of the country’s bureaucratic tangle.
The exploration technology development that has been undertaken by Ecopetrol and the National University is unlikely to turn out profits anytime soon though, said Equities Analyst Diego Usme at Bogota-based brokerage Ultrabursatiles.
“This is unlikely to change [the financial picture] that much in the short term,” he told Colombia Reports on a phone interview. “This is a long term investment.”
Interview with Diego Usme, Equities Analyst (Ultrabursatiles)
Email interview with Ecopetrol Comunications Office (Ecopetrol)
Unfixable PEMEX (The Economist)