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Colombia’s state oil firm to invest up to $69b to expand production of oil and gas: CEO

SINGAPORE – Colombia’s state energy company will invest around US$48 billion (S$69 billion) over the next eight years to expand oil and gas production, noted chief executive Felipe Bayon.

Mr Bayon told The Straits Times at the firm’s new office in Orchard Road that the firm was producing around 700,000 or so barrels of oil equivalent a day (boe/d) with ambitions to lift this to 850,000.

“Things are looking good at the moment, and we’ve been able to actively deploy capital to support our production, and while we suffered during Covid we are confident that we can hit 730,000 (boe/d) sometime around the middle of this decade,” he added.

Colombia produces about 750,000 barrels a day of crude, with around 60 per cent to 65 per cent marketed by the state company Ecopetrol.

More than half the crude under Ecopetrol’s management is sold to Asia with possibly more to come.

“We are currently selling about eight million barrels of crude to Asia every month, our clients are mainly in China, and India, but we have also sold crude to South Korea, and even Brunei,” said Mr Bayon in the interview on Tuesday.

“We think that over the next few months, this volume may go up a bit, so percentage-wise our volumes in Asia could go up.”

He said the new trading office in Takashimaya Tower here was Ecopetrol’s first overseas venture and represents a significant step for the company as it looked to build deeper relationships with existing clients while also developing new markets such as Japan, Vietnam and Thailand.

“Prior to this, all of our trading operations have been done out of Bogota, so this is a big, big step for Ecopetrol, and while the office is staffed with just four persons, it is supported by over 50 people for back- and mid-office operations back home,” Mr Bayon said.

“We’ve always had strong relationships with our customers, but now that we are here on the ground, the vibe is different; there is a personal connection and this helps build trust and our clients really appreciate it.”

Mr Bayon, who headlined the 38th edition of the Asia-Pacific Petroleum Conference at the Raffles City Convention Centre earlier this week, said he had also met with the company’s key stakeholders, including Singapore sovereign wealth fund GIC, which has bought some Ecopetrol bonds.

Mr Bayon said GIC wanted more clarity on the mid- to long-term impact of the recent change in government in Colombia.

“But they are very comfortable with the operational financial performance of the company, and that’s going very well, and I’d say that we’ve been consistent in terms of what we tell them we’re going to do and then doing it and delivering. So that’s good,” he added.

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