A Special Report From Oil and Gas Investor and Global ... - Equión

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Ecopetrol's Barrancabermeja refinery, the largest in Colombia, is undergoing an extensive modernization process. Orlando Cabrales, general director, ANH farm-in deal with ExxonMobil. ExxonMobil will spend up to $50 million drilling as many as three wells on lands prospective for shale oil. ”As the world’s largest publicly owned integrated oil and gas company, ExxonMobil brings significant experience, technology, research and financial resources to this shale-oil joint venture with Canacol,” said Charle Gamba, Canacol’s president, in a statement. ▪ C-6 OilandGasInvestor.com ▪ June 2012
COLOMBIA’S OIL & GAS INDUSTRY, 2012 The Main Players The companies that dominate the Colombian market are leading the country's expansion plans. Ecopetrol: An exemplary NOC Ecopetrol, Colombia’s partly privatized national oil company, accounted for 60% of Colombia’s national oil production in January 2012. The company controls 40% of the exploration land and 54% of the proven energy reserves in Colombia. In addition, Ecopetrol owns three-fourths of the country’s pipeline capacity. Led by its CEO, Javier Gutierrez, the company has pursued a policy of increased transparency and competitiveness with international peers over the past five years. Ecopetrol was “democratized” in 2007, via a $2.8-billion initial public offering for 10.1% of the stock. The company has quickly adapted to its new role and has been incredibly aggressive in its exploration, having increased capital spending the past three years by nearly 400%, which has resulted in 15 oil and gas discoveries during that time. Gutierrez an- nounced a 27% increase in reserves of 400 million barrels in March. It now has 1.86 billion barrels in reserves. “Our goal for 2015 is 1 million barrels and 1.3 million by 2020. This requires us to grow at 12% annually. So far, we have been growing on average 16%. We wish to add approximately 5 billion barrels in the next 10 years. This will include the addition of around 500 million barrels of 1P reserves.” Despite the growth in its home country, Ecopetrol has also expanded its reach, now operating subsidiaries in the U.S., Peru and Brazil. In addition, Ecopetrol agreed with its Venezuelan counterpart, PDVSA, to form a joint venture to recover four mature oil fields in the west of the country near the Colombian border, two of them in Lake Maracaibo where Venezuela’s first wells were drilled a century ago. Ecopetrol has been termed a “quiet energy giant” due to its relative lack of fame in the U.S. However, the company’s internal Ecopetrol's Capiagua operations, previously one of the country's largest crude producing fields, has now been converted to a natural gas processing plant. (Photo courtesy of Ecopetrol) shake-up and positive results are gradually turning heads internationally. The privatization process of Ecopetrol is also far from over. The former NOC has been acting in accordance with the approval of congress in 2006 whereby they were approved to offer up to 20% of new shares. “We still have the ability to offer the markets a further 8.3%,” explains Gutierrez. The two first rounds were restricted to Colombian citizens and the solidarity sectors, such as pension funds and unions. It was not open to international investors or institutional investors. For the next rounds, Ecopetrol has the possibility of going to any kind of investor, national or international. “In the future, there will definitely be more opportunities for international investors to participate,” Gutierrez enthuses. Pacific Rubiales: An investor’s favorite Pacific Rubiales is the largest independent oil and gas explo- June 2012 ▪ OilandGasInvestor.com C-7
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A Special Report From Oil and Gas Investor and Global ... - Equión

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