Positive energy
A MAJOR EXPORTER OF OIL TO THE U.S, COLOMBIA IS WOOING FOREIGN INVESTORS IN ORDER TO INCREASE ITS PRODUCTION AND AVOID ANY FUTURE SHORTAGE. THE GOAL IS TO REACH 800,000 BARRELS

46 NEW CONTRACTS have been signed by Ecopetrol and the ministry of Mines and Energy in the past 18 months.

Colombia’s oil industry is a major factor in the country’s economy and is hoped to help spearhead full-fledged recovery within the next few years. Oil tops both coffee and coal in terms of export earnings and accounted for 35% of government revenue last year. Colombian oil also helps fuel the U.S. economy, as only six other oil-producing nations exported more oil than Colombia to the United States in 2000.
Some doomsayers in the oil industry, however, have predicted that by the year 2004 Colombia could become a net oil importer if current reserve levels do not increase. But the government, well aware of the situation and the fact that much of the country remains unexplored, has made encouraging foreign investment in oil exploration and production a top priority.

“We began a new strategy in 1999 aimed at providing incentives to investors so that they return to Colombia in the sector of hydrocarbon exploration,” noted Energy and Mining Vice Minister Luis Ernesto Mejia Castro.
He was referring to the so-called Ronda 2000 and Ronda 2001 plans that improve economic conditions for exploration companies, more benefits for investors, fair playing rules and, among other incentives, the handover of oil fields that were once under state control.
“This was all done to mitigate the risk of possible shortages in the future,” Mr. Mejia notes. “In just 18 months, these Ronda 2000 and Ronda 2001 strategies have already led to the signing of 46 new contracts, when in all of 1999 we only signed one. So the move has been a success and we expect production to increase. Our goal is to return to a daily output of over 800,000 barrels.”

And as figures from the year 2000 indicated, nearly 50% of all that oil will end being exported to the United States. The more optimistic oil analysts point out that few companies that invest in the Colombian oil and gas industry will be disappointed. Eleven of the country’s 18 sedimentary basins remain unexplored and are potentially rich in hydrocarbons, they say, adding that Colombia shares many of the geological features of its oil-rich neighbor Venezuela.
Meanwhile, nobody argues that Colombia will remain Latin America’s largest producer of coal for years to come. The country’s second largest export in terms of revenue, Colombian coal is high in demand worldwide since its sulfur content of less than 1% makes it relatively clean to burn.

Investments in natural gas, however, have fallen as the industry waits to see which way congress votes on plans to deregulate prices and spur production through export promotion while increasing domestic consumption by earmarking natural gas for the production of electricity.
The main players in the industry include Ecopetrol, which manages the exploration and development of gas reserves, and Ecogas, the state-owned company linked to the Ministry of Energy that manages the nation’s transmission system and operates most of the gas transportation pipelines.

According to the president of Ecogas, Juan Carlos Duarte Torres, the company plays a key role in the country’s export initiatives, most notably the administrations attempts to build a pipeline to Venezuela, and beyond.
“That project is of top priority because it would mean the beginning of integrating our gas pipelines with Venezuela,” says Mr. Duarte. “Then we also have to look towards the south, to Bolivia and Peru, and finally to the huge U.S. market, which will buy all the natural gas you can sell it.”