Ecopetrol Goes Against Current, Plans to Invest $6.2B in Future Growth
In a bold move to strengthen its international presence, Colombia-based Ecopetrol is planning to invest more, not less, in its global expansion of exploration and development. An increased budget bucks the norm presented by most petroleum companies, which are shrinking their budgets in response to the currently unstable economic environment. Moreover, Ecopetrol plans to dip into its own pockets and contribute a large percentage of the money to help spur the growth and potential of its upcoming projects.
Ecopetrol has noted that its capital investment plan for the year 2009 will total $6.2 billion, which represents a 35% increase as compared to the $4.6 billion estimated for 2008, and three times the investment in 2007.
Ecopetrol's strategy is not unlike its South American contemporary, energy giant Petrobras. During the '80s, Petrobras made a similar decision to invest heavily to develop its deepwater oil production, which has catapulted Latin America into the arena of hydrocarbon exploration and production heavyweights.
Petrobras' presalt, ultra-deepwater discoveries in uncoventional conditions were brought on by the company's long-term business outlook, or "to invest when few companies could do so because prices were not lucrative," explained Petrobras Energia CEO, Decio Fabricio Oddone da Costa, to Rigzone. Oddone attributes his company's success to a risky, yet strategic decision to invest, rather than back-down during the price doldrums of that decade.
Taking a similar path, Ecopetrol is also investing rather than slashing its budget, increasing specifically in the areas of exploration and production.
"The 2009 investment plan is aligned with our new growth strategy, the goal of which is to become a global energy company as of the year 2015, with daily production of one million barrels of oil equivalent," stated Ecopetrol president Javier Gutierrez Pemberthy.
The company plans to focus 60.5% of its total capital investment plan on its exploration and production segment, the largest percentage of which will be allocated to the Llanos Orientales and Middle Magdalena region to capitalize on the development of the heavy crude and mature fields located there. As for exploration drilling, Ecopetrol intends to invest $1 billion for the drilling of 28 new exploratory wells, 24 of them local and the rest in international markets.
Ecopetrol will also invest $2.7 billion for increasing its direct production of crude oil and natural gas to 457,000 barrels of equivalent oil per day (boepd). As of October 2008, Ecopetrol's production amounted to 446,000 boepd, surpassing the target of 425,000 boepd set earlier this year.