The board of directors of Colombia’s state-controlled oil company Ecopetrol has given the go-ahead for construction to begin on a $3.4 billion modernization project to its main refinery in Barrancabermeja, which handles 80% of the fuel Colombia uses.
In a statement late Sunday, Ecopetrol said construction will completed in 2016 and said the improvements will improve profitability and eliminate the need for Colombia to import any fuel.
“The project will enable the country’s largest refinery to increase the conversion factor from 76% to 95%, which means that it will be possible to obtain more products, such as gasoline and diesel, and a greater quantity of heavy crudes will be processed,” the statement said.
An increasing percentage of Colombia’s oil production comes from fields that contain heavy crude, which require more refining than lighter crude oil.
The Barrancabermeja refinery in northeastern Colombia has a crude processing capacity of 250,000 barrels a day. Ecopetrol is the fourth largest oil company in Latin America and accounts for 60% of total production within Colombia.
The Colombian government controls 90% of Ecopetrol while the rest is traded publicly. Its shares closed down 1% Friday in Bogota, at COP3,870.