Colombia Oil and Gas Report Q4 2012
Business Monitor International, October 2012, Pages: 95
The Colombia Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Colombia's oil and gas industry.
BMI View:
Colombia’s oil sector has seen impressive levels of growth since the mid-2000s and we expect that positive trend to continue throughout our 10-year forecast period, with oil production expected to surpass 1mn barrels per day (b/d) in 2013. This growth will be driven by an improving security situation,
which should allow for expanded exploration activities, improved transport infrastructure and an attractive fiscal regime.
Main trends and developments we highlight for Colombia’s Oil and Gas sector are:
- An improving security situation and the country’s attractive fiscal regime are likely to continue to attract significant levels of foreign investment into Colombia’s oil sector. Production has grown by more than 70% since the mid-2000s and we expect that upward trend to continue.
Production will come close to achieving the government’s 1mn b/d target in 2012 at 990,000b/d before surpassing that target in 2013. By 2016, we forecast production topping 1.34mn b/d, making it one of Latin America’s top oil producers.
- Although most investment has been aimed at tapping Colombia’s oil reserves, the effect of rising investment is being felt in the gas sector. Gas production has nearly doubled in the last decade and we see scope for strong growth in the years ahead. Output is forecast to rise from 11.0 billion cubic metres (bcm) in 2011 to 13.5bcm in 2016.
- Production will continue to outpace consumption, leaving room for growing levels of exports.
The bulk of these exports will continue to flow via pipeline east into Venezuela. However, we are now forecasting small-scale liquefied natural gas (LNG) exports starting 2013. Pacific Rubiales, operator of the country’s largest oil field, will lead the LNG export charge. The company plans to build a 0.7bcm per annum export facility on the Caribbean coast, where it will target regional markets such as Panama, the Dominican Republic and Puerto Rico.
- Rising oil demand is fuelling investment in the downstream sector. Ecopetrol’s Bolívar refinery in Cartagena, the country’s second biggest facility, will be upgraded over the course of 2013 and 2014. The expansion project, which received a US$2.84bn loan from the US Export-Import Bank, will see the plant’s capacity rise from 80,000b/d to 165,000b/d. Furthermore, the 50,000b/d expansion of Ecopetrol’s Barrancabermeja refinery should bring the plant’s capacity to 300,000b/d. We see the country’s total processing capacity rising from 336,000b/d in 2011 to 466,000b/d by 2014.
- Although the country has been successful attracting rising foreign investment, state-run Ecopetrol will remain the engine of growth. The company plans to spend a total of US$8.5bn in 2012 as part of a broader capital expenditure plan that will see it invest over US$80bn between 2011 and 2020. In 2012, nearly half of the total capex will be channelled into production activities with a further US$2.025bn going towards transport infrastructure and US$1.4bn earmarked for new exploration.
Colombia’s dependence on oil prices leads to high volatility in the country’s export revenues. Our assumptions of tight supply due to booming demand in emerging markets is clearly an opportunity for the country. As a result, we forecast OPEC basket oil prices to remain elevated and average US$107.05 per barrel (bbl) in 2012, a figure similar to the 2011 average of US$107.52/bbl in 2012.
BMI Industry View 5
SWOT Analysis 7
Colombia Oil and Gas SWOT 7
Global Energy Market Outlook 8
Oil: Getting Closer To Emerging Markets Inflection Point 8
Table: Oil Consumption Forecasts, 2010-2016 (’000b/d) 10
Table: Oil Production Forecasts, 2010-2016 (’000b/d) 12
Regional Energy Market Outlook 16
Colombia Energy Market Overview 19
Table: Upstream Projects Database 22
Industry Forecast Scenario 23
Oil And Gas Reserves 23
Table: Colombia Oil & Gas – Historical Data And Forecasts, 2009-2016 24
Table: Colombia Oil & Gas – Long-Term Forecasts, 2014-2021 25
Oil Supply And Demand 27
Gas Supply And Demand 29
Revenues/Import Costs 29
Key Risks To our Forecast Scenario 29
Oil And Gas Infrastructure 31
Oil Refineries 31
Table: Refineries In Colombia 31
Service Stations 32
Oil Terminals/Ports 32
Oil Pipelines 32
LNG Terminals 33
Gas Pipelines 35
Regional and Country Risk/Reward Ratings 36
Table: Latin American Oil & Gas Risk/Reward Ratings 36
Table: Upstream Risk/Reward Ratings 38
Table: Downstream Risk/Reward Ratings 39
Colombia Upstream Rating – Overview 40
Colombia Upstream Rating – Rewards 41
Colombia Upstream Rating – Risks 41
Colombia Downstream Rating – Overview 41
Colombia Downstream Rating – Rewards 41
Colombia Downstream Rating – Risks 41
Competitive Landscape 43
Table: Key Players – Colombian Oil And Gas Sector 44
Overview/State Role 44
Licensing And Regulation 44
Government Policy 45
Licensing Rounds 45
International Energy Relations 47
Table: Key Upstream Players 48
Table: Key Downstream Players 48
Colombia Oil & Gas Report Q4 2012
© Business Monitor International Ltd
Page 4
Company Monitor 49
Empresa Colombiana de Petróleos (Ecopetrol) 49
Chevron Colombia 52
Occidental de Colombia 55
Petrobras Colombia 58
Sinochem/TEPMA 61
Pacific Rubiales Colombia 64
ExxonMobil Colombia 67
Talisman Energy – Summary 68
Repsol YPF – Summary 68
Royal Dutch Shell – Summary 69
Gran Tierra Energy – Summary 69
CEPSA – Summary 70
Perenco – Summary 70
Petro Vista Energy – Summary 71
Maurel et Prom – Summary 71
Hocol Colombia – Summary 72
Petrominerales – Summary 72
Petrolifera Petroleum – Summary 73
Others – Summary 74
Latin America – Regional Appendix 78
Table: Oil Consumption – Historical Data & Forecasts, 2009-2016 (’000b/d) 78
Table: Oil Consumption – Long-Term Forecasts, 2014-2021 (’000b/d) 79
Table: Oil Production – Historical Data & Forecasts, 2009-2016 (’000b/d) 79
Table: Oil Production – Long-Term Forecasts, 2014-2021 (’000b/d) 80
Table: Refining Capacity – Historical Data & Forecasts, 2009-2016 (’000b/d) 80
Table: Refining Capacity – Long-Term Forecasts, 2014-2021 (’000b/d) 81
Table: Gas Consumption – Historical Data & Forecasts, 2009-2016 (bcm) 81
Table: Gas Consumption – Long-Term Forecasts, 2014-2021 (bcm) 82
Table: Gas Production – Historical Data & Forecasts, 2009-2016 (bcm) 82
Table: Gas Production – Long-Term Forecasts, 2014-2021 (bcm) 83
Table: LNG Exports – Historical Data & Forecasts, 2009-2016 (bcm) 83
Table: LNG Exports – Long-Term Forecasts, 2014-2021 (bcm) 84
Methodology And Risks To Forecasts 85
Glossary Of Terms 86
Table: Glossary Of Terms 86
Oil And Gas Risk/Reward Ratings Methodology 88
Ratings Overview 88
Table: BMI’s Oil & Gas Business Environment Ratings – Structure 89
Indicators 89
Table: BMI’s Oil & Gas Upstream Ratings – Methodology 89
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology 91
BMI Methodology 93
How We Generate Our Industry Forecasts 93
Energy Industry 93
Cross Checks 94
Sources 94
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