Colombia’s Ecopetrol on Tuesday unveiled its Q2 2024 results, highlighting progress across key areas of the nation’s energy industry.
In the area of exploration, the company projects the drilling of 10 wells in 2024. Four have already been completed with a total investment of USD 198 million, while the latter half of the year will see the drilling of six more. The company has earmarked a substantial USD 600 million for exploration activities in 2024. “Exploration activities continue unabated,” president Ricardo Roa Barragán was quoted as saying in a press release.
Furthermore, Ecopetrol is working with the National Hydrocarbons Agency (ANH) to reassess abandoned wells, with the hope of unlocking stranded resources.
The Group has also reactivated two contracts via its subsidiary Hocol and two more with Ecopetrol that had been previously suspended, paving the way for renewed exploration efforts. Additionally, Ecopetrol is identifying potential exploration investments in partnership with other companies and the ANH.
Q2 2024 witnessed a surge in oil production, which rose above 750,000 bopd. This figure represents the highest quarterly production rate in eight years, surpassing the company’s annual production goal of 730,000-735,000 bopd. “We are achieving record-breaking production results,” Roa said.
Notably, 70% of this production increase comes from the NOC’s US branch, Ecopetrol Permian, which produces 93,000 boepd, while the remaining 30% comes from Ecopetrol’s assets in Colombia.
According to Ecopetrol’s executive vice president for hydrocarbons, Rafael Guzmán, this production boost is due to three main factors: the exceptional performance of the Permian assets, which accounts for more or less 10% of Ecopetrol’s total production; new developments in the Caño Sur field, which is expected to reach 50,000 bopd, along with increased production in CPO-09; and successful efforts made to mitigate depletion in maturing fields such as Chichimene, Castilla, and other crucial assets in the Middle Magdalena Valley through secondary and tertiary EOR techniques. “EOR has been instrumental in boosting production,” Rafael Guzmán said.
Roa also highlighted the exemplary performance of Ecopetrol’s midstream and downstream assets. The second quarter of 2024 saw record volumes of crude transportation, with 1,152 million barrels conveyed via Ecopetrol’s pipeline network. In this regard, Cenit contributed 20% of Ecopetrol’s EBITDA in the first half of 2024, being an essential company under the Group’s umbrella.
In downstream, Ecopetrol’s flagship refineries Reficar and Barrancabermeja demonstrated impressive utilisation rates exceeding 96%, with a combined capacity of 424,000 bopd. “This enhanced refining capacity has led to a reduction in refined product imports, particularly gasoline,” Roa said. These figures align with the Group’s annual objectives of achieving a combined refining capacity of 420-430 bopd. Roa also emphasised the company’s bet on two pilot hydrogen projects at its refineries, underscoring Ecopetrol’s ambition to become a prominent regional and global player in green hydrogen production moving forward.
Natural gas remains pivotal to Colombia’s energy transition and a top priority for Ecopetrol. Recent discoveries, such as Uchuva-2 at a depth of 804 metres, represents a significant milestone achieved in collaboration with Petrobras. Offshore endeavours, capitalising on the promising potential of the Caribbean region, are evident in Ecopetrol and Oxy’s efforts to advance drilling works in the Komodo-1 well located in COL-1 block. Similarly, the company plans to start the drilling of Buena Suerte-1 exploration well in the Tayrona Block in Q1 2025, partnering with Petrobras.
While gas potential in the Caribbean is vast, production is estimated between 2029-2031. “Our main goal is to continue investing, alongside our partners, in the discovery and development of natural gas resources,” Roa said.
Onshore, Ecopetrol has set its hopes on the Tren Piedemonte Llanero region, which boasts tremendous potential. This area has seen the drilling of Floreña N18,100% operated by Ecopetrol, in addition to the Arantes-1 ST2 well, drilled in collaboration with Parex Resources.
Despite the country’s potential gas reserves, Colombia faces possible gas shortages until offshore gas is finally produced and commercialised. In response, Ecopetrol has diverse action plans in place to ensure the availability of gas to meet increasing national demand. “There will be no gas shortages in Colombia” Roa reassured.
Ecopetrol is addressing possible gas shortage in 2025-2026 through a series of strategic solutions. The company aims to increase production at its Arrecife field from 4.8 mcf per day to 20-30 mcf. Additionally, Ecopetrol plans to ramp up gas production at its Floreña field to approximately 30 mcf.
Regasification presents another avenue to address the gas deficit. Despite the capacity expansion of SPEC LNG to around 530 mcf of gas per day, several additional options are on the table. By 2026-2027, the company is considering other regasification assets which include the installation of floating regasification platforms. For instance, Ecopetrol is already navigating the licensing process to establish a regasification unit in the Chuchupa field, which could be operational within 18-24 months, adding 140 mcf per day. Another regasification project under evaluation in Puerto Bahía could contribute an additional 240 mcf oper day by mid-2026.
Additionally, Roa announced that in November 2024, the company will start importing 50 mcf of gas per day from the Permian basin in the US, where it works hand in hand with Oxy. This import will be facilitated through the SPEC LNG regasification terminal.
The option of importing gas from Venezuela also remains present. Although not an immediate priority, a commercial agreement is in place for the period 2007-2027, allowing Ecopetrol and PDVSA to utilise the Antonio Ricaurte pipeline to import around 50 mcf of gas from Venezuela. “This possibility remains under our radar,” Roa said.
Lastly, Ecopetrol’s head underscored the strong bet the group has made in the areas of R&D and sustainably. Recently the group launched Icpet, the Colombian Institute of Petroleum and Transition Energies, which will become a key lever for the deployment of future renewable energy projects as well as initiatives for energy efficiency and decarbonisation. As for the latter, Roa claimed that Ecopetrol had achieved a reduction of 136,400 tonnes of CO2 equivalent.