Ecopetrol

Colombia's state-owned oil company continues to dominate the market producing 754,000 boepd, which equates to a 70% share of total production. Continued strong production and a healthy portfolio of exploration assets position Ecopetrol well for the future. After finds at the Pastinaca, Cusuco and CPO-11 blocks earlier this year, Ecopetrol also announced a third discovery at CPO-10, this time at the Guainiz-1 well.

Ecopetrol's share price, however, has seen better days. The highs of COP$5,700 experienced at the end of 2012 and beginning of 2013 saw a sharp decline, down to COP$3,800 in Q2 this year. The summer, however, saw the share price stabilize at around COP$4,350.

Service companies around Colombia have had to step up their health, safety and environmental practices in order to meet the new standards set by Ecopetrol. Many see this as raising the standards of the sector as a whole. “Ecopetrol requires significant certification for companies it works with. ICG has just completed the one and a half year process to achieve that certification which will allow us to work with Ecopetrol. I fully agree with the level of certification required by Eco-petrol as it raises our level as a service company and allows us to show our commitment to becoming an Ecopetrol service provider,” explains Eduardo Enrique Rivodó, president of Industrial Consulting Group (ICG).

Pacific Rubiales Energy

TSX-listed Pacific Rubiales was born out of the exodus of oil experts from Chavez' Venezuela. Pacific Rubiales maintains its position as the largest independent production company in Colombia. 2012 saw Pacific build their light oil assets base in Colombia by acquiring two mid-size players; Petro-Magdalena Energy and C&C Energy. This is in addition to international expansion in Brazil, Peru, Guyana and Papua New Guinea. Q2 gross production was 156,099 boepd (net production was 127,555 boepd), an increase of approximately 2,100 boepd compared to the first quarter of this year.

“The company will continue with its focus on conventional onshore activities with low costs. It will also emphasize resource activities in areas with light oil, potentially offshore in countries like Guyana, Brazil, and Peru. It is expected that the company's current production will double in four years; as such we are looking to expand our activities in different geological basins that will give us new opportunities in new countries. We will need reserves and resources to drive future growth, so it is important, at this time, to access these resources,” a spokesperson for Pacific Rubiales told us.

Petrominerales

Canada-based E&P company Petrominerales holds multiple properties across the Llanos Basin, in addition to single blocks in the Putumayo and Upper Magdalena basins. Production from Colombia in 2013 stands at around 24,000 boepd from a significant reserve base. “If we can modestly grow production this year, and have industry average or better success rates on our exploration program, Petrominerales can certainly grow reserves, grow production, and provide proof of concept on the two exciting resource opportunities that we have. To put the exploration program in perspective, we have 60 million barrels of original oil in place. We typically recover about half of that, so 30 million barrels of un-risked reserve potential. If we can be one in three, that is 10 million barrels, and that is before we take into account any heavy oil or the tight oil resource in Brazil,” says Corey Rutten, the company's president and CEO.

Gran Tierra Energy Colombia (GTEC)

The Putumayo Basin's biggest producer and biggest landholder should be especially praised for overcoming the difficulties of operating in an area still feeling the social and security effects of guerilla occupancy. The Canada-based firm has continued to exceed expectations despite pipeline interruption and social resistance to oil and gas activity. “For the first two quarters of 2013, GTEC has had record production levels despite pipeline interruptions, through using alternative crude oil transportation measures. Our primary production area is the Putumayo Basin, where we have stabilized gross production at around 27,000 boepd. We are confident that for the remainder of 2013, we can meet or exceed production guidelines released at the beginning of the year,” explains Duncan Nightingale, Gran Tierra's president.

The future looks bright for this growing power in Colombia's oil and gas sector. Nightingale points out that the lingering security issue is not the biggest obstacle to growth. “In addition to our production, GTEC has an excellent portfolio of exploration lands and is well positioned for sustainable future growth. However our ability to grow is partly dependent upon cooperation with the Colombian oil and gas regulatory authorities and in particular the Ministry of Environment's permitting arm ANLA, which is responsible for providing the permits that are necessary to facilitate exploration drilling and the development permits required to develop new discoveries,” says Nightingale.

Equión Energía

A joint venture between Ecopetrol (51%) and Talisman Energy (49%), Equión Energía was formed in 2010 from British Petroleum's (BP) Colombian assets. “Equión is, in many ways, the same company it was under BP. In fact, it is even still registered in the UK and therefore a British company. Equión maintains the same high HSE standards it had under BP and much of the workforce remains since the take-over. In the last three years we have tried to make the company more flexible, which is necessary with our size and the developments in the market. We strive to take the best from all parties involved, from our history with BP, from Ecopetrol and Talisman, and from the culture we have developed ourselves,” explained María Victoria Riaño Salgar, Equión's president.

Two of the assets inherited from BP, RC4 and RC5, are offshore. Along with unconventional resources, the offshore sector represents a beacon of hope for increasing Colombia's reserves. “Our offshore blocks RC4 and RC5, won in the 2008 Ronda, have huge potential, as does the Colombian offshore sector in general; for gas in shallow water and potentially liquids in the deep-water blocks. Offshore development will take time, as Colombia does not currently have the infrastructure or equipment available. It will come eventually and the ANH are revising exploration timelines on these blocks to account for this,” continues Riaño.

Equión currently produces around 27,000 boepd.

This report was prepared by Caroline Stern, Alice Pascoletti, Ramzy Bamieh and Josie Perez of Global Business Reports. For more information contact info@gbreports.com.