Ecopetrol expects oil output to fall 1.4 % in 2006

Colombia's state oil firm Ecopetrol expects the country's oil production to fall 1.4 % to 519,000 bpd in 2006 compared to 526,162 bpd in 2005 due to lower production from association contracts, a company spokesperson told.
Colombia's production has been dropping since 1999, initially at a rate of 6-9 % a year as a result of lack of exploration in the 1990s, the spokesperson said. However, in the past two years the country has succeeded in slowing the production decline largely as a result of the increased exploration requirements in association contracts since 2003.

Colombia's oil production fell 0.4 % in 2005 from the previous year. Still, exploration activities helped the country exceed its 2005 production goal of 510,000 bpd by more than 16,000 bpd.
Last year 35 wells were completed, the most in Colombia's history compared to 21 wells in 2004, 28 wells in 2003 and 10 wells in 2002. Ecopetrol estimates that 40 wells will be drilled through 2006, the spokesperson added.

Production from association contracts in 2005 fell 12.1 % to 337,977 bpd year-on-year, while Ecopetrol's own production averaged 131,250 bpd, up 3.6 % from 126,692 bpd in 2004.
The spokesperson explained that the fall in associated production stems from the fact that the largest most productive fields are those covered by association contracts. They are also the country's oldest fields and are entering their declination stage.

Ecopetrol's own production is increasing because the fields are younger and the company is making significant investments in new wells including horizontal wells, the spokesperson said.
The spokesperson pointed to the Llanos basin's Castilla field, wholly operated by Ecopetrol, which had increased production to 58,000 bpd by end-2005 from 40,000 bpd in 2004 as a result of horizontal drilling. The spokesperson said that Ecopetrol's direct production would continue to rise in 2006, while production under association contracts will fall once more.