Foreign oil firms will soon begin exploring seven fields in areas...
Foreign oil firms will soon begin exploring seven fields in areas with rebel presence, despite an upsurge in the violence that has made Colombia one of the riskiest places to do business, state oil firm Ecopetrol said on Thursday.
Ecopetrol President Alberto Calderon said multinationals including U.S. Occidental Petroleum Corp (NYSE:OXY - news) and Spanish energy giant Repsol YPF are planning to enter conflict-torn northeast and central Colombia to test-drill.
The multinationals will pay for and carry out the drilling and, under the terms of their exploration agreements, will share any eventual production with Ecopetrol.
But Calderon warned violence could prevent test-drilling from ever going ahead in some of the fields, which have total potential reserves of over 3.8 billion barrels.
``If (security) is maintained at current levels, we should be able to drill in the majority of these seven fields,'' Calderon said at a press conference.
He added that the chance of discovering oil at each of the seven fields stood at about 15 to 20 percent.
Ecopetrol has been waging an all-out campaign to woo foreign firms to Colombia to tap vast, unexplored reserves and prevent one of Latin America's top five oil producers from becoming a net importer as soon as 2004.
Calderon said Ecopetrol had signed 16 oil exploration contracts so far this year, and 32 contracts in 2000.
COLOMBIA REBELS BAD FOR BUSINESS
At the same time, Calderon revealed a study by IHS Energy Group showing Colombia ranked as the second-most dangerous country in the world for oil exploration, just behind Algeria.
A pipeline bombing campaign by Marxist-inspired rebels fighting in Colombia's 37-year-old civil war helped trim crude exports -- the country's biggest foreign exchange earner -- by 27 percent in the first quarter to $842 million.
Buyers of Colombian crude -- unwilling to take a risk of non-delivery -- are paying an average discount of up to $2.50 a barrel to U.S. benchmark West Texas Intermediate, according to recent study by a private Colombian think-tank.
Hardest hit by rebel violence has been the Cano Limon oil pipeline, Colombia's second largest, which has been virtually paralyzed since Feb. 17 due to rebel bomb attacks. Members of the Cuban-inspired National Liberation Army, or ELN, briefly kidnapped about 100 workers from Cano Limon field operator Occidental in April.
Ecopetrol receives about 50 percent of the oil pumped through Cano Limon, Occidental receives about 35 percent and Repsol the rest.
When asked when Cano Limo would again become operational, Calderon shrugged his shoulders.
``Ask the guerrilla. They have the dynamite,'' he said, half joking.