Colombia Plans to Boost Oil Output With a Drilling Push - Yahoo Finance

Colombia Plans to Boost Oil Output With Push for More Drilling

(Bloomberg) -- Colombia is targeting oil output of 1 million barrels per day by pressuring drillers to step up activity in underused exploration blocs, according to the nation’s top energy official.

Most Read from Bloomberg

- Harvard Students Walk Out of Commencement Protesting Suspensions
- China’s $538 Billion Deposit Exodus Supercharges Rally in Bonds

The government is seeking to juice output at “lazy contracts,” which may have been signed 10 or 15 years ago but have led to little or no exploration activity, Mines and Energy Minister Andrés Camacho said in an interview.

Through this and other measures, Camacho says Colombia can lift output to around 800,000 barrels of oil a day by the end of the year, up from an average of 774,000 barrels in the first quarter.

President Gustavo Petro, who has made fighting climate change a top priority, refuses to sign new drilling licenses even though oil and coal account for about half of the nation’s exports. Camacho says the administration’s policy is aimed at increasing exploitation of already-outstanding blocs.

“More contracts don’t necessarily mean more exploration,” Camacho said Thursday in Bogotá. “Our policy is to boost exploration with what’s already there.”

Through the National Hydrocarbons Agency, the government has set up a series of requirements that have to be met in each contract. Camacho says this was agreed with companies and is now starting to be applied, although it took effect at the end of last year.

That is helping stop the practice of some companies that had signed contracts only to sell them later at a higher price without having used them, according to Camacho.

Some requests from the companies were also granted, including allowing drillers to move to a different area within the same field, he added.

Enhanced Recovery

State oil company Ecopetrol SA is using enhanced oil recovery to improve the volumes that can be extracted from a reservoir, which is also helping increase output, Camacho said. The oil recovery factor in Colombia is currently at an average of 27% and compares to some countries that have achieved more than 40%, so there is room to improve, he added.

The hydrocarbons agency is set to publish a report Friday on Colombia’s reserves at the end of last year. As of the end of 2022, proven oil reserves had fallen to the equivalent of 7.5 years and natural gas reserves to the equivalent of 7.2 years.

Most Read from Bloomberg Businessweek

- The Dodgers Mogul and the Indian Infrastructure Giant That Wasn’t
- A Hidden Variable in the Presidential Race: Fears of ‘Trump Forever’

©2024 Bloomberg L.P.