a new us$1.6 billion oil project in colombia
Exxon, BP, Chevron Among Bidders for Colombia Oil April 7 (Bloomberg) --
Exxon Mobil Corp., BP Plc, Chevron Corp. and five other international oil companies qualified to bid on a $1.6 billion heavy oil project planned by Colombia's state oil company Ecopetrol SA.
Ecopetrol also took bids from Petroleo Brasileiro SA, Total SA, Repsol YPF SA, OAO Lukoil and China Petroleum & Chemical Corp., Ecopetrol President Isaac Yanovich said. The winner, to be picked in July, will help explore and develop more than 1.7 million hectares (17,000 square kilometers) with unproven reserves of as much as 3 billion barrels.
``This is our most important project,'' Yanovich, 62, said in an interview April 5 at Ecopetrol's Bogota headquarters. ``The investment could be much bigger if we set up a heavy oils upgrading plant and our feeling is we'll need it.'' The upgrading plant could cost as much as $1 billion more, he said.
Colombia is attractive to multinational companies such as Irving, Texas-based Exxon and London-based BP after a crackdown on insurgents improved pipeline security, Yanovich said. The government also offers companies profit-sharing contracts, he said. Ecopetrol, which in 2005 produced about 60 percent of Colombia's daily output of 526,000 barrels, estimates the investment would help extract as much as 200,000 barrels of crude a day compared with 60,000 daily currently.
The heavy crude project in Meta province, about 150 kilometers (93 miles) from Bogota, is part Ecopetrol's effort to step up domestic output. Colombia, Latin America's fifth-largest oil exporter, forecasts that by 2011 at current depletion rates it will become a net oil importer for the first time in almost 100 years.
Second Project
Ecopetrol, Colombia's biggest company with $6.7 billion in revenue last year, says the project will tap at least 452 million barrels of proven reserves in the plains of Meta province.
In another project to develop existing reserves in Tibu oil field in Norte de Santander, bordering Venezuela, Ecopetrol has pre-qualified for bidding Tulsa, Oklahoma-based Vintage Petroleum Inc, owned by Occidental Petroleum Corp., Moscow-based Lukoil, Russia's largest oil producer, Rio de Janeiro-based Petrobras, Brazil's state-controlled oil company, and Houston-based Burlington Resources Inc., owned by ConocoPhillips, the third- largest U.S. oil company, Yanovich said. The auction for the approximately $200 million development will also take place in June or July, he said.
``Tibu is a field where we want to extract, using new technology, between 90 million and 200 million barrels of crude extra over the next 15 years,'' said Yanovich, adding that the oil will begin to flow next year.
Bigger Budget
Ecopetrol, which provides about 16 percent of the government's annual budget, has increased its exploration spending to $160 million this year from $60 million in 2003 and its overall budget to $1.4 billion from $950 million last year, Yanovich said.
It also has a budget this year of $150 million for exploration projects and oil purchases outside of Colombia, in countries like Argentina, Peru, Ecuador, Brazil and Venezuela, he said.
Yanovich estimated Ecopetrol could produce as much as 400,000 barrels a day by 2011.
``It depends on how much the government gives us from its budget and how well the economy is going,'' he said.
Ecopetrol also is planning an investment of about $450 million with partner Occidental Petroleum to extract an extra 200 million barrels of oil over the next 15 years from its oldest field, La Cira Infanta, in northern Santander province. Ecopetrol will know how much investment will be needed by the first quarter of next year, Yanovich said.
Cartagena Refinery
Since its discovery in 1918, the field has produced 700 million barrels of crude out of estimated reserves of as much as 3.5 billion barrels, Yanovich said.
He also said the auction for companies participating in the $800 million bidding to upgrade and expand its refinery in Cartagena, Colombia would take place in the first week of June.
Ecopetrol qualified Petrobras, Switzerland's Glencore International AG, BP and Japan's Marubeni Corp, to make bids on a project to double output at the plant.
