Volume 2, issue #9 - 04-04-1997

sponsored by:

Colombia enhances terms for new natural gas production

Mar. 21, 1997 In a bid to meet growing natural gas demand in Colombia, state-owned Ecopetrol expects to announce enhanced contract terms for new gas exploration by private companies in the coming weeks, an Ecopetrol executive said recently.
Colombia estimates domestic natural gas demand will grow to 800 million cubic feet per day (mm cfpd) by 2000 from 450 mm cfpd now, and needs additional production to meet the demand, said Ismael Enrique Arenas, Ecopetrol exploration and production vice president. "Our association contract was designed for oil, and we have to give a special condition in the case of natural gas," he told.
In addition to pipeline projects that could boost the number of residential customers to 3 million from the current 700,000, three gas-fired electric plants with 1,700 MW of capacity will be built over the next three years, he said. He declined to discuss terms of the new gas contract, which comes at the same time Colombia is relaxing its take and other conditions in contracts for oil exploration in frontier areas in the country.
Arenas said he expected no revisions in British Petroleum Piedemonte exploration contract for fields where oil already has been discovered. BP, the single biggest foreign investor in Colombia, has sought revised terms to boost its return on exploration and production projects there. "We are analysing the possibility to renegotiate the contract where we don't have any discoveries and we need additional reserves," he said.
Arenas said US companies remain interested in business opportunities in Colombia despite simmering political discord over the flow of Colombian cocaine into the United States.