The E&P spending will go to new ventures and consolidating existing investments in Colombia.
The other 7%, or some US$10mn, will go to downstream operations. Petrobras this year concluded the acquisition of Anglo-Dutch oil company Shell's (NYSE: RDS-B) downstream assets in Colombia, which includes 38 service stations, and in Paraguay and Uruguay.
Petrobras first started investing in Colombia in 1972, focusing more on the country in 1986 by expanding its E&P portfolio. Petrobras invested US$637mn in the country from 1986-2005.
In addition, Petrobras owns 18 exploration licenses in Colombia and is operator in 12 of the licenses. The company also owns oil reserves of some 120 million barrels of oil and is producing 16,520 barrels a day (b/d).
In the second half of 2006, the company plans to start exploration drilling on one of the most recent acquisitions, the onshore Tierra Negra block in the Llanos Oriental basin.
The company is also concluding seismic studies in the Caribbean coastal block Tayrona, where Petrobras is operator in a consortium with US oil company ExxonMobil (NYSE: XOM) and Colombia's state oil company Ecopetrol.
The seismic studies will allow the consortium to keep the most promising 22,500 sq km portion of the block since it has to hand back the other 22,500 sq km to the government this year. Initial drilling there is due to start in 2007.
"Depending on the success of these two projects, Colombia could contribute more to Petrobras' international oil production," Joao Figueira, Petrobras executive manager for Latin America, North America and Eurasia, said in a recent interview.
Petrobras also aims to expand its international refining capacity in Colombia as it is preparing to bid for the contract to expand Ecopetrol's Cartagena refinery on the Caribbean coast.
The contract would give Petrobras rights to some of the refinery's future output. The refinery, which processes 80,000b/d, is considered strategic because it would add value to oil Petrobras produces there and is located near North American markets, Figueira said.
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