Wednesday, July 29, 2015

Colombia's oil industry looks to the Carribbean

Oil reserves in the Caribbean Sea represent the latest great hope for the beleaguered Colombian oil industry. Amid dwindling reserves and plummeting prices, the oil sector has been desperate for some good news. Late on Tuesday, Colombian state oil company Ecopetrol confirmed that it had discovered hydrocarbons at its Kronos-1 well in an extremely deep part of the Caribbean. Specifically, the discovery was located 33 miles offshore, at a depth of 12,200 feet.

Houston’s Anadarko jointly owns the well with Ecopetrol. The Colombian oil company’s president, Juan Carlos Echeverry, told reporters, “This discovery adds to the one accomplished in December at the Orca-1 well, located in the deep water of Tayrona Block offshore Guajira, where we are partners with Petrobras, Repsol and Statoil. These results are very important and confirm the potential of the Colombian Caribbean petroleum system in a vast area and are aligned with Ecopetrol's new strategy, in which one of the key areas is the exploration on high potential marine basins.”

Colombian business journal Portafolio cautioned that this announcement still falls well short of the miracle that the Colombian oil industry has been praying for. This is just a confirmation of the existence of hydrocarbons, and we will need to wait between 5 and 6 years to know whether the deposit can be commercially developed.


In other oil-related news, economic research company Fedesarrollo released a study predicting that Colombian oil production will start to drop in 2016. The climate of low oil prices and the lack of investor interest in oil exploration in Colombia, combined with the country’s small oil reserves, mean that oil production will start to drop in 2016.

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