Ecopetrol to boost oil production with new technology investments

(Bloomberg) – Colombia’s state-controlled oil company Ecopetrol SA will invest in technology to boost oil production at the fields it operates, Chief Executive Officer Ricardo Roa said at his first press conference.

The company will target an increase of two percentage points in its oil recovery factor, or the amount of crude that can be extracted from a reservoir, he added, without elaborating on what the technology will be. The factor is currently 18% to 20%, he said.

The government of President Gustavo Petro has refused to issue any new exploration licenses, leaving the company with few options other than to try to exploit the concessions it already has more efficiently. Petro was elected last year, pledging to phase out Colombia’s dependence on oil and coal, which account for about half of exports.

“Our great challenge is to accelerate the energy transition,” Roa told reporters in Bogota Monday, on his first day in the job.

Ecopetrol needs to be profitable based on its existing contracts, said Roa, who previously headed power company Grupo Energia Bogota.

The Petro administration, which took over in August, is also seeking to implement a ban on hydraulic fracking. Congress is currently discussing a bill that would halt the method of oil extraction, which the previous government hoped would attract new investment and lift oil production. As a result, Ecopetrol scrapped two such pilot projects in Colombia last year.

When asked about the Permian Basin joint venture with Occidental Petroleum Corp. in Texas, Roa said it was “very profitable.”

“If you get rid of one profitable asset, you would need to find something that is equally profitable,” he said.