Colombia Sees Oil Production Rising Ahead of Drilling Round

MARACAIBO, Venezuela (Dow Jones), Oct. 14, 2009

Colombia continues to drill for more oil and by next year production could return to its high-water mark reached in the 1990s above 800,000 barrels a day, a top official said Wednesday.

"We could be back there in a year or two," said Armando Zamora, head of Colombia's AHN oil licensing agency, in a speech at the Latin American Petroleum Show in western Venezuela.

During his speech, the Colombian energy official also laid out further plans for the country's new drilling round, called Colombia Open Round 2010, in which the country will offer oil firms exploration and production rights that could lead to even higher production.

Regarding the oil production expectations, Zamora said once output reaches about 800,000 barrels a day "a certain amount of bottlenecking would occur due to infrastructure and transportation issues, but we are already working on that."

Average crude production this year is expected to approach 700,000 barrels a day, up from 588,000 a day in 2008.

The rise in production comes amid recent oil discoveries in Colombia as well as efforts by firms to boost production at existing fields. State oil firm Ecopetrol S.A. and Canada-based Pacific Rubiales Energy Corp. indicated they aim to double production at Rubiales field to 100,000 barrels a day at the end of this year and 160,000 barrels a day by the end of 2010.

President Alvaro Uribe said last month's he is confident the Andean nation's production will eventually rise to 1.6 million barrels per day.

As for the drilling round, Zamora said it will give firms the opportunity to explore and produce oil and gas in nearly 170 blocks, including sites off Colombia's San Andres Island, near Jamaica.

He said the blocks would be split up into three areas, including mature sites where risk is lower and thus could attract smaller energy firms. The other areas are considered riskier, exploratory sites, such as those in and around the province of Choco on Colombia's Pacific coast.

A "pre-launch" of the drilling round is set for Thursday, he said, while interested firms will be able to pick up preliminary information packets next month.

Further details will be announced in December, Zamora said, when Colombia hosts an oil show. Throughout next year Colombia will hit the road to promote the oil round in cities around the world.  

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