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Colombia sitting on big oil reserves

Colombia sitting on big oil reserves
By Ed Crooks in London

http://www.ft.com/cms/s/0/e7ab6bcc-0014-11dd-825a-000077b07658.html

Published: April 1 2008 22:04 | Last updated: April 1 2008 22:04

Colombia’s heavy oil area could hold 20bn barrels of recoverable resources, giving the country greater reserves than leading producers such as Mexico and Algeria, said its natural resources agency.

Foreign investment in Colombia’s oil and gas industry is booming, and the country hopes to lift oil production to 1m barrels a day in the next decade, from about 550,000 b/d currently.

EDITOR’S CHOICE
Chávez buoyed by Exxon court ruling - Mar-18In depth: Oil - Jan-31Colombia-Ecuador border remains uneasy - Mar-27Tensions over Colombia raid defused - Mar-08Uribe accuses Venezuela of backing Farc ‘genocide’ - Mar-04Ecuador cuts Colombian ties over incursion - Mar-03Colombia’s heavy oil potential is dwarfed by that of its neighbour Venezuela, which is estimated to have at least 240bn barrels recoverable in its Orinoco belt region. But Colombia has the great advantage of welcoming foreign investment.

It is one of the few countries with significant resources becoming more accessible to international companies, and capable of growth in oil exports.

The ANH, Colombia’s national hydrocarbons agency, is on Wednesday setting out details of Colombia’s second licensing round in London, following presentations in Houston last week.

Larger companies have been invited to bid for heavy oil exploration acreage in the Llanos Basin, towards the border with Venezuela. ExxonMobil and Chevron of the US, Royal Dutch Shell and Lukoil of Russia have expressed interest.

The estimate of recoverable heavy oil comes from a study by Halliburton, the oil services group, which suggested there were 100bn barrels in place, and a typical recovery factor of 20 per cent.

Halliburton also suggested Colombia could have more than 50,000bn cubic feet of gas, about as much as Canada or the Netherlands.

David Thomson of Wood Mackenzie, the consultancy, said he thought the estimate of recoverable heavy oil was “probably on the hopeful side, but by no means impossible�?.

“Colombia is not like Venezuela, Bolivia or Ecuador, which have all been pursuing unfriendly policies towards business, and its geology is also relatively easy, so it is attractive.�?

Armando Zamora, director-general of the ANH, told the Financial Times he thought Colombia was now the most popular country in Latin America for foreign investment in oil and gas production. That investment rose from $1.8bn in 2006 to $3.5bn last year, and is expected to be close to $5bn (€3.2bn, £2.5bn) this year.

Mr Zamora acknowledged that in the areas being offered for heavy oil there were security concerns because of possible attacks by Farc rebels, which he said took refuge in bases across the border in Venezuela, and there would be a need for the government to deploy additional troops “to be on the safe side�?.

However, Farc activity had declined sharply.

He would reassure potential investors about the tension between Colombia and its neighbours Venezuela and Ecuador. “There is no chance we would start a war with them,�? he said.
Copyright The Financial Times Limited 2008

By sloopskipper on Apr 1, 2008, 17:34 in Friendly Talkzone.

sloopskipper says on Apr 1, 2008, 17:37:

bump

Simon says on Apr 1, 2008, 17:39:

Oh man I hope this is true!

HERE'S SIMON!!!!

sloopskipper says on Apr 1, 2008, 17:39:

Great news for Colombia!

Maybe tio Hugo can take his heavy, dirty, crude and SHOVE IT ("somewhere where the sun don't shine")! Or maybe send it to Brazil, in a couple years ;)

sloopskipper says on Apr 1, 2008, 17:42:

For sure, Simon!

Medellin Traveler says on Apr 1, 2008, 17:49:

Yeah, well, don't get to excited Simon, who do you think has dibs on that oil? Certainly not the Colombian people, close your eyes and picture a color deviod of color, and ye shall have your answer, nothing to get excited about. What a great ransom for the king and his paramilitaries friends... is this the reason for the all-out-assault on FARC, not PEACE?

Medellin es una chimba! www.medellintraveler.com

sloopskipper says on Apr 1, 2008, 17:52:

BUT, it certainly offers employment and foreign investment.

The people rarely have "dibs" on natural resources.

peteyw says on Apr 1, 2008, 17:56:

This is not news to the oil exploration industry. These estimates have been disclosed before. What is 'news' is that the international community is increasingly emboldened to make the investments required to explore and drill. Their caution has always been the safety of their investment in drills, rigs, pipelines, crew etc..

Colombia is absolutely rich and blessed in natural resources.

peteyw says on Apr 1, 2008, 17:59:

By the way, at this very moment, my son is working on an exploratory rig in the Gulf of Mexico.

sloopskipper says on Apr 1, 2008, 18:00:

Surely the recent news, both in Colombia, and Venezuela, has emboldened these people to invest.

lampltr says on Apr 1, 2008, 18:01:

MT, I agree say nothing about the environmental impact as the rules would be very light if any. Besides the FARC, many of the Para's will have much work....On a seperate note, look what is happening in Peru right now with their natural gas exploration. All the locals are extremely excited about their own reserves and not having to outsource...Who is behind the scenes funding all, hmm you probably guessed it!

sloopskipper says on Apr 1, 2008, 18:03:

Let us guess, lampltr, Chávez, or Bush, or maybe the Chinese?

DodgerDogs says on Apr 1, 2008, 18:14:

Colombia's oil reserves is no new secret, but like all natural resources Colombia has, the palanca style politics,
will always go to the private and not for Colombia's public. Look how much of Colombias beaches around Santa Marta have suffered from Colombia selling of its coal to Drummond. There are far more
foriegn Nations companies that will profit from Colombias oil than the public of Colombia...
Take a look around Cienaga to Maicao and La Loma at the holes from mining and the Wayoo Indios displaced by Drummond and other foriegn companies in their mining for coal, they come and pay Colombians poor wages and forget the Colombian workers when they get hurt on the job.
Colombia has had many Russian and Asian and North American companies exploring and drilling its oil deposits for over 50 years.
The open pit mine Drummond has made in Colombia's soil has become the worlds largest open pit in the world, and the envirmental damage it has caused will take many thousands of years to start to recover. Drummond makes far more profit of its sweetheart deals with Palanca than Colombia's public sees in return..

Our lives begin to end the day we become silent about things that matter.Martin Luther King:

peteyw says on Apr 1, 2008, 18:15:

The funding for this stuff is the key. It costs a whole lot of dough. Just one exploratory well can cost as much as 200K USD a day, depending on the location and conditions. And there is no guarantee it will even strike oil.

The folks that have the money to fund the large numbers of wells required to actually explore and retrieve oil and gas, are not that interested in the economic problems of the locals, or the 'equal distribution' of wealth or the environment. They want a serious return on their high risk/high reward investments. They feel what the host country does with its portion of the profits is for the country to decide, not them.

In other words, Colombia needs to have nationwide referendums and discussions within the country to decide on the best ways to utilize the profits from the natural resources to the benefit of the many not just the few; while protecting the environment as much as possible.

The odds of this happening are good, but it needs to be more than 'lip-service'.

DodgerDogs says on Apr 1, 2008, 18:20:

http://www.elpilon.com.co/noticias/not00010572.htm

http://www.elpilon.com.co/noticias/not00011499.htm

http://www.elpilon.com.co/noticias/not00010840.htm

Our lives begin to end the day we become silent about things that matter.Martin Luther King:

Medellin Traveler says on Apr 1, 2008, 18:22:

Uribe and his cronies probably have it all figured out.

NO need for open discussions or disclosure.

Medellin es una chimba! www.medellintraveler.com

ColombianoGringo says on Apr 1, 2008, 18:43:

"like all natural resources Colombia has, the palanca style politics,
will always go to the private and not for Colombia's public"

Sad, but true. The oligarcas and politicians will steal all the royalties, while the people will get to enjoy whatever environmental nightmare gets left behind due to a lack of oversight.

On the upside, foreign oil companies are some of the few that pay somewhat reasonable wages in rural areas of Colombia. I don't really blame the oil companies except where they are complicit with the corrupt dealings that inevitably takes place.

peteyw says on Apr 1, 2008, 18:45:

Unfortunately, I have to agree with you guys. The cronies and politicos will do what they do best....

ColombianoGringo says on Apr 1, 2008, 18:49:

That is one of the things I hate about Colombia. Even though I could easily move to Colombia and get hooked up with a great job using family "palanca", I refuse to take part in that style of doing business. I don't believe you have to fuck over the little guy to make money. Sadly, most "empresarios" in Colombia seem to have that attitude when it comes to their employees and their customers.

Medellin Traveler says on Apr 1, 2008, 18:56:

ColombianoGringo,

I often wonder how anyone gets ahead in Colombia. I guess, they don't.

Medellin es una chimba! www.medellintraveler.com

ColombianoGringo says on Apr 1, 2008, 19:10:

I am talking more about people that own companies rather than an individual professional. Some people do succeed and rise to the top without screwing others over.

I have seen both sides of the equation in my family. Some have become professionals and done well that way, while others have started companies and gotten rich while paying their employees miserable wages and treating them like shit. Thankfully, not every empresario in Colombia has that attitude, but I would say that most do.

The sad thing is that it has evolved into an adversarial relationship between companies and their employees and everyone ends up losing. The companies justify screwing the employees because they say the workers are lazy. At the same time, many employees justify doing a half-assed job because they say that their employer is screwing them over. Usually the one that ends up losing the most is the customer.

RAAAY says on Apr 1, 2008, 19:10:

Yeah...........life's a bitch here.........

.

.

.

.

.........Its useless to argue with ignorance

Simon says on Apr 1, 2008, 19:17:

What's with that fokin' 'Columbian Street Party' pic? I find that pic offensive! And the irony is that it probably was made in a country that consumes a lot more coke than Colombia!

HERE'S SIMON!!!!

RAAAY says on Apr 1, 2008, 19:29:

Sorry Simon............I took it off...........but hey...com'n ....it was funny....

.

.........Its useless to argue with ignorance

robi666 says on Apr 1, 2008, 19:36:

Ray, stop offending Colombia.
If you do not like to live here and you don't like Colombians, just leave, please.
It is easy, enter an agency and buy a ticket to Miami, and "ciao, nos vemos".

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

DodgerDogs says on Apr 1, 2008, 19:43:

Our lives begin to end the day we become silent about things that matter.Martin Luther King:

poco says on Apr 1, 2008, 19:47:

Quote: That is one of the things I hate about Colombia. Even though I could easily move to Colombia and get hooked up with a great job using family "palanca", I refuse to take part in that style of doing business. I don't believe you have to fuck over the little guy to make money. Sadly, most "empresarios" in Colombia seem to have that attitude when it comes to their employees and their customers.
---------------
I'd think you should have a perfect situation to SHOW 'M HOW it's done. I mean,, if they kick employees with sharp pointed shoes (unless they are masochistic) I'd recommend rounded tennis shoes. Once their confidence is gained it should be a walk in the park.

"Violence is the first refuge of the incompetent" - Isaac Asimov

RAAAY says on Apr 1, 2008, 20:00:

DD.......I think that using this forum to make scurrilous remarks about someone is really uncalled for.

Whatever about having a bit of a joke at someone else's expense, now and then. But making personal and nasty comments on a person, and how they lead, or do not lead their private lives is reprehensible.

Whatever way someone chooses to lead their life is none of my business. I don't care to judge and really don't care to hear about it.

.

.........Its useless to argue with ignorance

tejasmarcos says on Apr 1, 2008, 20:04:

wow. i thought ole mc was a straight and dandy guy!

will wonders never cease in colombia.....

trying to walk a straight line on sour mash and cheap wine...

DodgerDogs says on Apr 1, 2008, 20:08:

RAAAY: I see you know the edit function, I will copy you and edit too.
But I will never defend a pervert .

Our lives begin to end the day we become silent about things that matter.Martin Luther King:

robi666 says on Apr 1, 2008, 20:10:

Muerte a los gringos.

robi666 says on Apr 1, 2008, 20:12:

I have to agree with DD and Colgringo.
Life is far from being easy here, and if in Medellin I can see a light for people, up on the coast is as dark as ever. Thanks to oligarchs and corrupt politicians.

Everyday is a battle for the majority of Colombians.
I see those pictures are from Cartagena. And this documentary is from Cartagena, too.
While people drink in Plaza Santo Domingo, other people struggle for life.

Cronica de pirry: Fantasmas en la Ciudad de Piedra 1/6
Nice major, indeed. Rumors are that he is now bound to jail.

adrimm says on Apr 1, 2008, 20:13:

The oil is nothing new.. maybe that it is stable enough for foreign companies to go back is new. My uncle worked for an oil company 50 years ago, and I had a coworker who was born in Colombia becuase her father was a company engineer and working in Barrancabermeja.

tejasmarcos says on Apr 1, 2008, 20:15:

i thought the aguila negras of the world were taking care of the medellin madmen of the world. what the shell is goin on here? one day the eagles are flying and one day the buzzards are buzzing. i'm confused....

i thought there were oil in them thar hills!

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trying to walk a straight line on sour mash and cheap wine...

DodgerDogs says on Apr 1, 2008, 20:16:

Robbi: Porque mata todo gringos, mucho gringos bueno gente. There is a old proverb time wounds all heels. Which means every dog has his day.

Poco: thanx for the spell check :)

Our lives begin to end the day we become silent about things that matter.Martin Luther King:

robi666 says on Apr 1, 2008, 20:20:

DD, "Muerte a los gringos" es solo la frase famosa de un gringo que no escribe mas aqui.

goin_south says on Apr 1, 2008, 22:40:

no chit, Dog?
I thawt it was like time heals all wounds...
which meant every DUCK has his ... GOOD DAY.

..... leavin louisiana in the broad day light

poco says on Apr 1, 2008, 22:56:

Quote: There is a old proverb time wounds all heals.

That should be spelled heels.

"Violence is the first refuge of the incompetent" - Isaac Asimov

goin_south says on Apr 2, 2008, 01:09:

well.,... it use to be called: America.. but, now.. there is oil... so...
WE ARE ALL CALLED: COLOMBIA. jaj.. your worst nightmare, eh?

..... leavin louisiana in the broad day light

Ctg Bound says on Apr 2, 2008, 07:55:

DodgerDogs,

About 60% of the profit from coal produced in Colombia, stays in Colombia, although to much no doubt ends up in the wrong hands.