Ecopetrol, is the largest petroleum company in Colombia, reported its approved investment plan for the year 2012 and the update of the strategic plan for the Corporate Group for the 2012-2020 period.
Investment plan for 2012
The investment plan approved for 2012 amounts to US $8.477 billion of which US $7.452B is expected to be invested directly in Ecopetrol and US $1.025 million in other companies of the Corporate Group.
According to the plan, 94% of the Capex is allocated to projects in Colombia, and the remaining 6% will be allocated to exploration and production projects along the US Gulf Coast and Brazil and Peru, where Ecopetrol holds interests.
Exploration
With an investment of US$1,419 million in 2012, Ecopetrol SA plans to drill 42 exploratory wells, of which 36 will be located in Colombia. The company plans to continue with activities on all blocks it has in Colombia. Most of these wells will be in the Llanos Orientales while others will be drilled in the Magdalena valley, Catatumbo, Piedemonte and the Caribbean offshore. Six wells will be drilled internationally in the US Gulf Coast and Brazil. The drilling goal was set according to the strategy of focusing on prospects with higher potential and value for the company.
The company plans also to continue to develop unconventional resources (shale gas) on blocks in the Mid Magdalena.
Production
Ecopetrol SA allocated US $4,113 million for continued growth of crude oil and gas production with a target of up to 750 thousand barrels of oil equivalent per day (MBOED) in 2012 as an average. This production goal is 10.6% higher than the 2011 goal. Ecopetrol's Corporate Group's production is expected to reach 800 MBOED in 2012.
Most of the investment will be earmarked for projects in the Llanos Orientales. Primary recovery projects will begin at the CPO-9 and Cano Sur fields. Projects will continue at Castilla, Chichimene, Rubiales, Occidente, Quifa, Caracara, Cravo Norte, Guajira, Rio Zulia, Rancho Hermoso, Tisquirama, Sur, Neiva, Provincia, Casabe, Tibu, La Cira Infantas, Apiay, Nare, Yarigui and Cusiana fields, among others.
Refining, Petrochemicals and Biofuels
The estimated total investment in this business segment is US$601 million under the investment plan, used primarily for the industrial services project, operational improvement plan and upgrades at the Barrancabermeja and Cartagena refineries. Investments in bio-fuels are included through contributions to Bioenergy.
Transportation
The US$2,025 million in investments in transport aims to increase crude evacuation capacity by 600 thousand barrels a day (BPD) in 2012. These projects are expected to help increase heavy crude production. Also included in this investment amounts are contributions to the companies Oleoducto
Bicentenario and Oleoducto de Colombia. Oleoducto de los Llanos expansion will be funded autonomously by ODL.
Other investments
Ecopetrol SA plans to allocate US$318 million to other investments including, among others, research and development investments at the Instituto Colombiano del Petroleo (Colombian Petroleum Institute –ICP-) and information technology. The investments are also expected to help fund initiatives in the areas of human talent, the shared services center, quality management and social responsibility.
Corporate Group Investments
Corporate Group Investments are expected to amount to US$10,964 million, including US$8,477 million in Ecopetrol S.A. and US $2,487 million of investments undertaken by the companies part of the Corporate Group with their own resources.
The investment plan includes Capex for Group's companies amounting to US $4,576 million in 2012, of which Ecopetrol SA will contribute US$1,025 million. The remaining resources are expected to come from cash generation by each company, commercial financing, and the contributions of third parties or partners.
