Colombia needs a new oil discovery

May 17, 2005 02:00 AM

Colombia needs heavy investment in oil and gas exploration and a new discovery in the coming years in order to remain a net exporter of crude, Energy and Mining Minister Luis Ernesto Mejia said.
"If no new field turns up, we'll have to start importing," Mejia told on the sidelines of a Latin American energy conference in La Jolla, California.

Colombia's Finance Ministry predicts that the country's oil production will slip to 510,000 bpd this year, from 528,830 bpd in 2004 and a peak of 815,000 bpd in 1999. Colombia hasn't had a major oil find since the Guando field was discovered in 2000. Unless new deposits are located soon, Colombian oil output could drop below domestic demand by 2011, forcing the South American country to import crude, Mejia said.
The country is hoping to convince private oil companies to invest $ 1 bn a year in exploration in Colombia through 2020. Multinational oil companies in the country include ExxonMobil, Occidental Petroleum and British Petroleum.

The government of President Alvaro Uribe has slashed royalties and offered other incentives recently to encourage oil and gas activity in the country, which is to a large extent unexplored. Just 7 of Colombia's 18 sedimentary basins have been explored, in part because of the country's ongoing guerrilla conflict.
Mejia pointed out, though, that attacks on pipelines and other infrastructure have dropped 60 % over the last three years. Today, the biggest concern for multinationals working in the country, Mejia added, is geological risk, or the possibility that efforts to uncover new oil and gas deposits could fail.

Source: Dow Jones
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