Ecopetrol, Omimex to Invest US$50mn in Nare

Colombia's state oil company Ecopetrol and the local subsidiary of Texas-based oil company Omimex Resources will invest US$40mn-50mn in the Nare association contract in 2004, and some US$15mn this year, Omimex's Colombia president Segundo Gonzalez told BNamericas.

Nare is in the middle Magdalena basin. Production at the contract's two fields, Nare Sur and Jazmin, is currently some 10,000 barrels a day (b/d) of 12.5 degrees API heavy crude.

The investment will include the drilling and termination of at least 100 development wells, many of them on Jazmin itself or next to it. The drills would reach down to 2,000-2,500 feet, Gonzalez said.

Omimex finished over 200km of 2D seismic in October, and is currently analyzing the findings, Gonzalez said, adding that the results will probably indicate the existence of other fields on the block, also containing 12.5 degrees API crude, which would be economically feasible to develop.

If Omimex and Ecopetrol implement all their plans for Nare, production there would be 30,000-40,000b/d within four years, Gonzalez said. Oil from Nare is sent to Ecopetrol's Barrancabermeja refinery through a 180km pipeline.

Omimex replaced 20km of 12-inch diameter pipes with 14-inch piping in 2002, and by the end of the first quarter 2004 will replace a further 10km, as well as purchasing and installing latest generation pumps, he said. The upgrade will increase capacity to 58,000b/d from 52,000b/d. Although Omimex's total production in Colombia is only some 16,400b/d at present (10,000b/d from Nare, 4,800b/d from its Cocorna association contract and 1,600b/d from its privately-held Velasquez field), all this output is heavy oil and has to be mixed with lighter crude for transport, and so the pipeline currently operates at around 40,000b/d capacity, Gonzalez explained.

Earlier this year Omimex drilled an exploration well to 12,500 feet on its Diamante contract, but relinquished the contract after finding only residual crude, Gonzalez said.

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