Ecopetrol looks to boost production from Colombia's oil-rich eastern block

(Bloomberg) – State-controlled oil driller Ecopetrol SA sees “great potential” for development and exploration in Colombia’s crude-producing heartland alongside bets on U.S. fracing and offshore gas. 

The company said this month that it now has full ownership of the CPO-09 block in the nation’s oil-rich eastern plains after completing its $452 million acquisition of Repsol SA’s 45% stake. That investment’s strategic location near Castilla and Chichimene, among the country’s top five fields, allows the company to benefit from synergies, a top executive said in an interview. 

“We’re looking to increase our reserves and output,” Rafael Guzman, Ecopetrol’s vice president of hydrocarbons, said Tuesday in Barrancabermeja.  

With reserves of oil and natural gas falling, and President Gustavo Petro refusing to grant new exploration licenses, Ecopetrol is focused on contracts signed before the environmentalist leader took power in 2022. The company’s priorities are boosting output in blocks such as CPO-09 in the cattle-ranching lowlands of central Colombia, finding and producing natural gas in the nation’s Caribbean waters, and increasing output at its international assets, Guzman said. 

Ecopetrol’s recent production growth has come from the Permian basin — which accounted for 14% of output in the third quarter — helping offset declines at home. Earlier this month, Petro asked the company to sell its operations in the U.S., citing his government’s stance against fracing, which he says is destructive to nature and humanity. 

However one of the joint ventures the company has in the southwestern U.S. with Occidental Petroleum Corp. runs through 2027 and the other was extended recently until mid-2026. 

Even after Colombia recently started importing liquefied natural gas to supply factories and homes, Petro is determined to block the use of fracing to boost output and close the deficit. The environment ministry this week sent an anti-fracing bill to lawmakers. 

Ecopetrol and Petrobras announced in December that the Sirius-2 well off the Caribbean coast could triple the country’s reserves if the deposit proves commercially viable, making it Colombia’s biggest-ever natural gas discovery. The drillers have said first production will be in 2029 at the earliest. 

Tests to determine how much Sirius-2 will produce are expected to end this quarter, according to Guzman. Following that, the same drill will be used to explore the Papayuela and Buena Suerte wells which are also located in the GUA-OFF-0 block previously known as Tayrona. 

The plan is to drill both wells this year and while their potential can only be determined after, the findings in Sirius “helps give a higher chance of success,” the executive said.