Ecopetrol counts on output boost

Colombia's state producer, Ecopetrol, expects output to rise to 1 million barrels per day in 2015, from 400,000 bpd last year, helping the country put off becoming a net crude importer, the company said today.

With fields under exploration off Colombia's Caribbean coast and internationally, company president Javier Gutierrez said production estimates are rising.

"Ecopetrol has has a first-stage strategy of focusing on Brazil and Peru mainly (in terms of international activity). But we are also looking in other parts of the world, like the Gulf of Mexico," Gutierrez told the Reuters Latin America Investment Summit.

A preliminary analysis is being prepared for expansion into Venezuela, Africa and Asia, but Gutierrez declined to say when Ecopetrol might go into those markets.

"We consider the Caribbean coast a very promising area that could start producing in about three years," he said.

This year's output is expected to be about 425,000 bpd, climbing to about 460,000 bpd in 2009, Gutierrez said in an interview with the news agency.

Output estimates include the company's natural gas production. Ecopetrol accounted for 62% of Colombia's average crude production last year.

Gutierrez said Colombia is doing all it can to avoid becoming a net oil importer.

"Year by year Colombia is pushing back the line of sustainability," he said.

"Right now we have the resources to be completely sustainable up to 2015. Six years ago our limit was 2008. Our projection is that we will continually postpone that line of sustainability, step by step," Gutierrez added.

Investment conditions have improved under President Alvaro Uribe, first elected in 2002 on promises of crushing Colombia's cocaine-funded Marxist insurgency. He was re-elected in 2006 after sparking economic growth and cutting urban crime with his US-backed crackdown on the rebels.

The government has meanwhile launched a campaign to attract oil sector investment based on better security.

About 100 well are expected to be drilled by companies operating in Colombia this year, up from 73 in 2007, Gutierrez said.

Colombia's oil industry history can be broken into two periods. The first was a successful stretch from 1974 to 1992 when 60 to 70 wells were drilled every year.

Starting in 1992, security weakened as the Andean country entered an intense period of drug cartel violence. Investment sagged and only eight to 10 wells per year were drilled during that period.

Gutierrez said the industry is slowly turning around as Uribe pushes the rebels onto the defensive.

Ecopetrol privatized 10.1% of itself by selling $2.8 billion of stock to Colombian investors in 2007. It was the first time that Ecopetrol opened itself to private investment.

The company says all proceeds from the privatization are being invested in itself as Ecopetrol tries to revitalise an oil sector stunted by four decades of war in which the guerrillas often bombed pipelines.

"The most immediate aspects of our strategy have to do with our plans for consolidating the company, focusing on production and greatly increasing exploration," Gutierrez said.

Ecopetrol net earnings are expected to rise to about $3.5 billion in 2008 from $2.5 billion last year, Gutierrez said.