Thursday, February 12, 2015

Colombian oil production strong and steady

Despite seemingly endless warnings of a crash from oil industry observers, Colombian oil production has bucked the odds and maintained a daily average of more than 1 million barrels of oil. Oil production in January actually increased by 2.7% over December 2014’s average to 1,034,500 barrels per day. This is the fourth straight month that the Colombian oil industry has hit the government’s goal of one million barrels per day.  Business journal Dinero’s report noted that production totals almost certainly benefited from the fact that there were no attacks against Colombia’s oil infrastructure in January.

In related news, Colombian finance minister Mauricio Cardenas called on Ecopetrol to power through the oil crisis and maintain a level of investment in exploration sufficient to keep these production successes going. In essence, he said that Ecopetrol needs to find a way to keep production at 1 million barrels today, regardless of the price of oil.

Simon Gaviria, head of the Colombian Planning Department, told reporters that the country is looking into adjusting its royalties system to give large oil companies an incentive to invest in increasing production at existing oil fields. This proposal would allow for Colombian officials to fatten up pre-existing oil production contracts to strengthen relations with oil companies.


For months now, oil industry observers have been calling on the Colombian government to do everything it can to keep oil companies happy, lest they decide to take their investment dollars elsewhere amid the slump in global oil prices. It appears that Colombian regulators have heard these pleas and are starting to respond.

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