Colombia aims to boost oil exploration

BOGOTA - Colombia, South America's third-largest oil producer, is aiming to boost its exploration activities in a sector that is increasingly vital to its economy.

The country has crossed the threshold of one million barrels per day, but still lags far behind regional oil powerhouses Venezuela and Brazil in terms of reserves.

Colombia therefore has to focus on new technologies, offshore development and unconventional oil, experts told AFP on the sidelines of a forum in Bogota.

"We must keep up exploration activity in all sectors in order to preserve reserves for the long term," said German Arce, president of the National Hydrocarbons Agency in Colombia, where investment in the sector reached $5.5 billion last year.

"We have found new resources but we haven't taken a big step forward. However, as long as we keep up exploration activity, the possibility of finding new reserves grows," he said.

According to Arce, the development of deep-water offshore oil exploration and unconventional oil are the major challenges for Colombia in the next few years.

For offshore development, drilling is critical, Arce said.

"Without that, the next phase will be impossible, especially keeping in mind that we are competing with highly developed areas like the Gulf of Mexico," he said.

Extracting unconventional oil, such as methane hydrate and shale oil, is a long-term challenge.

Colombia's oil industry, which was hardly developed during the past century, continues to grow and is currently an engine of the economy, accounting for 25 per cent of state income.

But reserves were only at 2.377 billion barrels by the end of 2012 - only enough to keep things going for seven years at current production levels.

"The relationship between production and reserves should worry Colombia, even though we stayed at the same level for the past 12 years - proof that we continue to discover new reserves," said Venezuelan Ronald Pantin, director of Pacific Rubiales, the largest private company in Colombia.

"International studies indicate that in Colombia we could find between 10 and 20 billion barrels of crude in the coming years. But the future of the oil industry is playing out in areas that are more and more difficult, like the Amazon," Pantin said.

"The traditional areas have already been sufficiently explored," he said.

Given the environmental problems associated with the industry, Pantin, a former executive at Venezuelan state oil giant PDVSA, emphasised the importance in improving the "recovery rate" - the amount of oil that is retrieved from a deposit compared to the total amount it contains.

In Colombia, 57 per cent of active deposits contain heavy oil, which is more difficult to extract.

"The average recovery is somewhere around 15 to 18 per cent, but with secondary recovery techniques, we could increase the rate to 50 per cent," Pantin said.

His company, Pacific Rubiales, wants to do even better and began using a technique to inject air into wells in the Quifa oil field in Colombia's northeast, aiming at a 70 per cent recovery rate.