The Export-Import Bank of the United States (Ex-Im Bank) has approved a $1 billion preliminary commitment to help finance the sale of goods and services from various US exporters to Ecopetrol SA, Colombia’s national oil company.
With the commitment, Ecopetrol may request the financing to buy oil field-related equipment and services from US companies in order to develop oil and gas reserves, improve existing oil field production, and upgrade refineries. The national oil company has plans to significantly increase its petroleum production to 1 million barrels of oil equivalent per day by 2015.
While at Columbia’s Presidential Palace, Ex-Im Bank chairman Fred. P. Hochberg said, “This preliminary commitment will help Ecopetrol expand its production base, contribute to Colombia’s economic growth, and offer enormous opportunities to US exporters to provide goods and services to this important market.”
The announcement was made after Hochberg met with Colombian President Alvaro Uribe and other senior Colombian government officials in an effort “to build stronger relations with the Colombian market, for the benefit of both our countries.”
Ecopetrol President Javier Gutierrez called the decision “excellent” saying it will allow Ecopetrol to “more easily purchase US products and services to expand its investments in: exploration, production, refinery modernization and clean energy.” Examples, he noted, are the Cartagena and Berrancabermeja refinery modernization projects, valued at over US$6.5 billion—the largest and most complex industrial projects Colombia has undertaken in many decades. “Ecopetrol will be able to process heavy crude and significantly increase its overall production capacity,” he continued.
Gutierrez also commented that Ex-Im’s support will have a “tremendous, positive impact” on Cartagena's and Barracabermeja’s industrial and social development with improvements in worker education, job and business creation.
Ecopetrol will have the opportunity to request conversion of the preliminary committment into final transactions for medium- and long-term loans and guarantees during the next two years as it identifies potential US exporters for its projects. The transactions will be submitted to Ex-Im Bank’s board of directors for final approval.