Colombia hopes to lift its oil production to 1 million barrels a day by 2020 as improved security following decades of civil conflict has helped foreign investment in the country's energy sector to surge.
Colombia's state-controlled oil company, Ecopetrol, aims to raise output first to 700,000 barrels a day by 2015 and to 1 million barrels a day by 2020, said Armando Zamora, chief of the oil licensing agency, known as ANH.
Colombia produced on average 540,000 barrels a day last year. About half of its output is exported, primarily to the U.S.
"Our goal is no longer just to maintain self-sufficiency. We will be able to continue exporting the same surpluses as now or more," Zamora said.
Zamora was speaking at a roadshow in London Wednesday for Colombia's current licensing round, which is auctioning 43 oil and gas blocks, including some heavy crude assets. Companies including Chevron Corp., Royal Dutch Shell PLC, Exxon Mobil Corp. and Russia's Lukoil Holdings have already expressed interest.
Colombia offers "one of the most attractive concession contracts in the world, certainly in Latin America," Zamora said. "Colombia has never expropriated, has never changed contracts unilaterally."
Colombia has emerged as an increasingly attractive option in the region as neighboring producers like Venezuela, Ecuador and Bolivia have rewritten contracts to impose tighter terms on foreign oil companies.
Foreign investment in the oil and gas sector is expected to rise to $5 billion a year this year, up from $3.5 billion in 2007, Zamora said.
Success rates at exploratory wells have consistently remained at about 40% in recent years, he added.
In total, Colombia plans to auction 151 blocks in 2008.
Eight of those will be heavy crude blocks in the country's east, which Zamora said shares a similar geology to Venezuela's Orinoco Basin -- an area of massive potential which Venezuela believes holds nearly 300 billion barrels in recoverable oil.
Bids for the heavy crude blocks are by invitation only, and 20 companies are participating, Zamora said.
Separately, a "mini round" for 100 smaller oil and gas blocks in relatively well-established production areas will be launched shortly and end in September, he said.
Colombia enjoys a reputation for strong contractual stability and favorable terms, including royalties as low as 8%. After decades of kidnappings and attacks by rebel groups on oil infrastructure, Colombia's security situation has also improved following beefed-up security that has put left-wing guerilla groups and criminals on the run.
LONDON, April 2, 2008 (Dow Jones Newswires)
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