Ecopetrol Expects Oil Output to Fall 1.4% in 2006
Colombia's state oil firm Ecopetrol expects the country's oil production to fall 1.4% to 519,000 barrels of oil a day (b/d) in 2006 compared to 526,162b/d in 2005 due to lower production from association contracts, a company spokesperson told BNamericas.
Colombia's production has been dropping since 1999, initially at a rate of 6-9% a year as a result of lack of exploration in the 1990s, the spokesperson said.
However, in the past two years the country has succeeded in slowing the production decline largely as a result of the increased exploration requirements in association contracts since 2003.
Colombia's oil production fell 0.4% in 2005 from the previous year. Still, exploration activities helped the country exceed its 2005 production goal of 510,000b/d by more than 16,000b/d.
Last year 35 wells were completed, the most in Colombia's history compared to 21 wells in 2004, 28 wells in 2003 and 10 wells in 2002.
Ecopetrol estimates that 40 wells will be drilled through 2006, the spokesperson added.
Production from association contracts in 2005 fell 12.1% to 337,977b/d year-on-year, while Ecopetrol's own production averaged 131,250b/d, up 3.6% from 126,692b/d in 2004.
The spokesperson explained that the fall in associated production stems from the fact that the largest most productive fields are those covered by association contracts. They are also the country's oldest fields and are entering their declination stage.
Ecopetrol's own production is increasing because the fields are younger and the company is making significant investments in new wells including horizontal wells, the spokesperson said.
The spokesperson pointed to the Llanos basin's Castilla field, wholly operated by Ecopetrol, which had increased production to 58,000b/d by end-2005 from 40,000b/d in 2004 as a result of horizontal drilling.
The spokesperson said that Ecopetrol's direct production would continue to rise in 2006, while production under association contracts will fall once more.
The spokesperson could not say if or when production would begin increasing until new discoveries are made and their production potential is known.
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