Ecopetrol Mulling South American Expansion, Eyes 1P, 2P Reserves

Colombia's state oil company Ecopetrol is evaluating plans to begin international operations, particularly in Venezuela, Brazil, Ecuador, Peru and Argentina, Ecopetrol corporate planning department advisor Maria del Pilar Florez said.

The company is mostly interested in areas with 1P and 2P reserves and could expand its operations through participation in E&P contracts, acquisitions, share purchases or farm-in and swap agreements, she said at the 3rd Annual Energy Integration Congress in Buenos Aires hosted by BNamericas and International Business Communications.

Ecopetrol is not interested in acting as an operator. As a result, the company is seeking high volumes and ventures with favorable economic conditions, Flórez told BNamericas on the conference sidelines.


Meanwhile, Colombia's congress is evaluating law 113 that would enable Ecopetrol to place its shares on the local stock exchange as part of a plan to give investors a 20% piece of the company.

Congressional approval is expected before year-end for the law, which would enable Ecopetrol to carry out international investments, Colombia's energy and mines minister Hernan Martinez Torres told BNamericas on the conference sidelines.

Venezuela's state oil company PDVSA, for example, is interested in jointly developing areas on the border between the two neighbors, Martinez said.

Ecopetrol will be valued by an investment bank and could be ready to begin placing the shares by the beginning of the fourth quarter next year, he added.


Oil production in Colombia is due to drop to an average 520,100b/d in 2006 from some 533,000b/d in 2005, according to Florez.

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 90s. However, in the past few years the country has succeeded in slowing the production decline, largely as a result of increased exploration requirements in association contracts since 2003.

Ecopetrol expects the production rate to drop to 500,000b/d by 2011, Florez said in her presentation.

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