Pacific Rubiales Energy Corp. expects the oil output from its Colombian operations to rise to between 400,000 barrels and 500,000 barrels a day within three or four years, the company’s chief executive said Wednesday.
After the interest of its partners and royalties handed over to the Colombian government, Pacific Rubiales would have a net output of around 200,000 barrels a day, up from an expected 92,000 barrels a day at the end of this year and up from around 50,000 barrels now, Pantin said.
Currently, Pacific Rubiales extracts oil from the Rubiales field, where state- controlled oil firm Ecopetrol SA owns a 50% stake. The field is Pacific Rubiales Energy’s largest operation.
The Rubiales field is currently producing around 110,000 barrels of crude a day and output there will rise to 210,000 barrels a day by the end of this year, Pantin said.
As a result of rising production and low operation costs, Pantin said he expects the company’s net profit to be “giant” this year, though he declined to elaborate. He said the company’s cash-flow is “extraordinary.”
Besides the Rubiales field, Pacific Rubiales also owns a natural gas operation that currently produces 60 million cubic feet of gas a day. The company will boost output there to 90 million cubic feet of gas a day by the end of this year and to 120 million cubic feet of gas a day in late 2011.
The company will start to ship compressed gas to Colombia’s island of San Andres, which is located off the shore of Nicaragua, for electricity generation.
The island will take about six million cubic feet of gas a day starting in mid-2010 to replace fuel oil to generate electricity.
Pacific Rubiales will then start to export gas to Panama by sea and later to other countries in Central America and the Caribbean. Those countries depend on liquid fuels to generate electricity, an alternative that is both expensive and polluting.
All those investments will require Pacific Rubiales to invest US$1.05 billion in Colombia this year. The company will invest $857 million in capital expenditures and US$190 million to secure access to the pipeline that ships its oil output to the Caribbean.
The company will finance the investments with money raised from a bond sale last year and from its cash-flow, Pantin said.
(Inti Landauro, Dow Jones)