Colombia’s oil industry will attract about US$3.5 billion in 2009 from foreign investors, roughly the same amount as last year, Armando Zamora, the head of Colombia’s government oil-licensing agency, or ANH, said Thursday.
“This is a very satisfactory level for a crisis year, and we expect it to keep rising,” Zamora said. He expects foreign companies to invest more than US$3.5 billion in 2010.
Zamora and other government officials had feared that the credit crunch in late 2008 and the subsequent economic downturn could lead investors to turn their backs on Colombia.
The majority of foreign companies had already secured financing for their projects when the crisis struck and, when the world economy and oil prices began to recover, new projects had no difficulty attracting finance.
A reduction in guerrilla attacks on oil infrastructure, higher crude prices, and a legislative and tax structure favorable to oil and mining companies have lured investors into Colombia, allowing the country to reverse its downward trend in oil production in 2005.
The ANH said this month that Colombian and foreign companies operating in the country produced an average of 704,000 barrels of crude a day in October. The figure is the highest in a decade and 34% more than the average in 2005.
Zamora said output will rise to 800,000 barrels a day by the end of 2010, due to the development of new fields and improved recovery rates at existing fields.
The country’s oil industry has enough momentum behind it to reach production of 1 million barrels a day by 2015, though this would strain the sector’s infrastructure, Zamora said. The country will need more pipelines and ports to ship the amount of oil out of the country.
Colombian oil production peaked in 1999 at 830,000 barrels per day, according to data from Ecopetrol SA, the state-oil company, then fell to 526,000 barrels of oil by 2005 as older fields declined.
Next week, the ANH will start the process of awarding rights to seek and extract oil in 168 areas. Some of these areas are in zones that already produce oil where ANH has new information, and more than 50 are in what he called “frontier areas,” including deep sea sites, and areas that have been difficult to access due to security problems and where the information available is very scant.
On the Caribbean coast, companies such as Petrobas SA, Ecopetrol SA and others will spend around US$400 million to seek off-shore oil this year, Zamora said.