(in U.S. $ millions)
Total Market Size
Total Local Production
Imports from the U.S.
(The above statistics are unofficial estimates in millions of USD)
Sources: National Hydrocarbons Agency, Ministry of Mines and Energy, Colombian Oil Company and World Atlas
The oil and gas machinery and services market continues to represent an important opportunity for U.S. companies as the Colombian government continues to place oil and gas exploration and production a top priority. Colombia is close to achieve production one million barrels per day, according to the Ministry of Mines and the National Hydrocarbons Agency in Colombia, during 2012, Colombia’s crude oil production averaged 938,000 barrels per day (with a peak of 960,000 barrels per day), and getting closer to the projected 1.2 million barrels per day, targeted for 2014. During the same period, Colombia’s average natural gas production averaged 1,157 million cubic feet per day (with a peak of 1,168 million cubic feet per day). Ecopetrol is currently the leader in crude oil production due to the implementation of enhanced production technologies in different fields.
Colombia’s known oil reserves remains at 2.2 billion barrels due to the lack of large oil discoveries, allowing for the country to be self-sufficient until 2018 allowing more time for the country to identify new crude oil reserves, or become a net importer of crude oil, if no major discoveries are found before then. Natural gas reserves reached 5.4 tera cubic feet (TCF) of proven reserves, and up to 7 TCF of total reserves. Despite a significant number of exploration and production (E&P) efforts, only minor discoveries have been made so far, mainly due to the country’s complex geology and geography.
The National Hydrocarbons Agency (ANH) continued its series of block award tenders (known as Rondas) that have attracted the interest of world-class companies such as Anadarko Petroleum. This company, along with Ecopetrol, will explore the Fuerte Norte/Sur offshore blocks over the Caribbean Sea. In addition, Shell Oil has been awarded a technical evaluation contract for the blocks Macuira and Nazareth, 3,000 meters deep waters in offshore Guajira, sharing responsibilities with ChevronTexaco.
Other ANH activities involve the contracting of seismic, gravimetric, magnetometry, geological, stratigraphic and petrography tenders.
The ANH is also awarding E&P and technical evaluation contracts to gain a better understanding of the country’s hydrocarbons resources, in particular on unconventional hydrocarbons (coal bed methane and shale gas). The U.S.company Drummond Coal is currently evaluating the potential for up to four TCF of coal bed methane associated gas discovered by Drummond at its La Loma (state of Cesar) and at the Ranchería river (state of Guajira) sites.
Oil and gas companies are conducting an aggressive exploration campaign throughout Colombia, including assessing its offshore Caribbean and Pacific Ocean basins. Despite the lower current oil prices (compared to 2008 prices), these activities offer significant opportunities for U.S. exploration and production (E&P) firms as well as equipment manufacturers and service providers interested in this market in the medium and long term.
In late May 2011, Ex-Im Bank announced the approval of USD 2.8 billion in loans and guarantees for the modernization of the Cartagena Refinery project (Reficar), and complementing the USD 1 billion preliminary commitment of ECOPETROL to support the acquisition of U.S. goods and services to support the company’s key goals.
Imports of oil & gas equipment benefit from a favorable peso-U.S. dollar exchange rate; relative proximity of Colombia to the U.S.; and with the implementation of the U.S.-Colombia Trade Promotion Agreement (U.S.-CTPA) on May 15, 2012, Colombia will eliminate import duties for equipment, spare parts, and accessories destined for various activities (exploration, production, refining, and transformation).
The best products and services for this industry are:
Potential opportunities involve petrochemical and refinery expansion projects that could be very attractive to U.S. firms, including an expansion of the Cartagena Refinery to increase daily capacity to 140,000 barrels (bpd). This has been awarded to Chicago Bridge and Iron (CBI) as a USD 1.4 billion engineering, procurement and construction contract. Ecopetrol is currently developing a modernization project at the Barrancabermeja refinery and awarded Foster Wheeler USA and Process Consultants the project management contract and expects to open the selection process for the USD 2.5 billion EPC contract.
Ecopetrol currently is undergoing an assessment of potential business opportunities in the development of a petrochemical cluster that includes existing plants at the Cartagena and Barrancabermeja refineries, including the modernized facilities, as well as the Cusiana/Cupiagua processing facilities. The assessment will also consider the large U.S. natural gas production from unconventional hydrocarbons and the worldwide petrochemical market.
Another large project is the construction of the USD 4.2 billion Oleoducto del Bicentenario, a 960 kilometers crude pipeline (450,000 barrels per day) that could become operational by the end of 2014. Ecopetrol has a 55 percent share, and other partners include: Pacific Rubiales (32.8 percent), and the remainder 12.2 percent by PetroMinerales, Hocol, among others.
U.S. Commercial Service Bogotá contact: Julio Carbó, Commercial Specialist
Tel: (571) 275-27-23
National Hydrocarbons Agency (ANH): www.anh.gov.co
Ministry of Mines and Energy: www.minminas.gov.co
Colombian Oil Company (Ecopetrol): www.ecopetrol.com.co
Colombian Government: www.gobiernoenlinea.gov.co
Inter-American Development Bank (IDB): www.iadb.org
National Planning Department: www.dnp.gov.co
Refinería de Cartagena, S.A. (Reficar): www.reficar.com.co
The World Bank: www.worldbank.org
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