Changes include eliminating time limits and reducing the participation of state oil company Ecopetrol, the statement said. "In this day and age, there are so many areas in which oil is being explored for and developed that Colombia has to be very competitive," an industry source told BNamericas. The new terms "would certainly make it a more attractive investment environment than the current terms," a different source, US oil company Occidental spokesperson Larry Meriage, said.
The government held a seminar in Houston on Thursday (Mar.11) to attract US investors to the country's hydrocarbons sector. Defense minister Jorge Alberto Uribe spoke at the seminar about the improved security of pipelines and oilfield installations in the country, largely as a result of US economic aid to train and equip troops. Contract terms have to be more attractive, the industry source said, because although the security risk in Colombia is "manageable," it is "still a risk." In contrast to the country's public order situation, Colombia is "very stable" in terms of its legislation and hydrocarbons sector regulations, the source added.
The country has for years been trying to put off the date at which it will become a net oil importer. Oil production in 2003 fell 6% to an average of 541,000 barrels a day (b/d) from 2002, compared to 815,000b/d five years ago. Unless major discoveries are made soon, production is expected to continue falling to 530,000b/d in 2004 and there is a possibility that Ecopetrol may have to begin importing crude as soon as 2005, Reuters quoted Ecopetrol's President Isaac Yanovich as saying at a March 9 press conference.
Ecopetrol will probably have to start importing diesel even earlier in the second half of 2004, despite efficiency improvements at the company's main refineries, Yanovich said. "We have mature fields which are in their natural decline period, so if the self-sufficiency is going to be addressed it needs a very aggressive exploration program," the source said. The replacement of reserves in Colombia has historically needed a rate of 50-70 exploration wells drilled each year, the source said. Only 20-30 wells were drilled in 2003. However, if discoveries are made in the short term, other companies are likely to increase their exploration activity, the source said. "Oil attracts oil, so if someone finds oil others will get interested."
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