OBG talks to Javier Gutiérrez, President, Ecopetrol

Interview: Javier Gutiérrez

What is the motivation behind the recent oil auctions and what firms have shown interest?

JAVIER GUTIÉRREZ: The 2014 round was organised by the National Hydrocarbons Agency to increase the attractiveness of the sector among major global players. These companies have shown the greatest interest in non-conventional oil and offshore operations in the past two years. We are talking about firms such as Exxon-Mobil for unconventional; Anadarko Petroleum, Petroleo Brasileiro (Petrobras) and Repsol for offshore; and ConocoPhillips and Royal Dutch Shell for projects in both categories, among others. Interest in traditional onshore areas also remains robust, particularly in areas such as San Vicente del Caguán in the Caquetá region, Putumayo and in the Piedmont plains, where light oil can still be found and produced.

Although offshore development is only beginning, 18 new offshore wells are being auctioned in the oil round. In addition, the publication of a complete set of regulations for the development of non-conventional resources and the participation of the national oil company should usher in an exciting new era. Nonetheless, the short-term priority is to see an increase in the number of conventional onshore oil wells explored. The primary concern of the sector is still the average life of reserves, which remains under seven years. From mid-August 2014 onwards, winning firms will start signing contracts to start exploring the newly auctioned wells.

In what ways will the creation of your subsidiary Cenit contribute to managing the pipeline network?

GUTIÉRREZ: With Cenit we have significantly improved the management of assets related to hydrocarbons infrastructure. This has inspired greater confidence in our partners and customers, something that can be seen in the large reduction in the number of complaints from operators. However, our goal remains to be able to carry 1.5m barrels per day by 2015, we still want to achieve our challenging construction and oil production goals. Once we meet this goal we will need to decide, in accordance with the discoveries that are made, if we should expand the Bicentennial Pipeline to the Atlantic coast or build the Pacific Pipeline, along with our partners. Both potential projects are still in the very early stages of environmental and social viability studies, which will not be concluded in 2014.

How much interest do Ecopetrol and foreign partners have in offshore exploration?

GUTIÉRREZ: While private companies have so far been driving investments in offshore, Ecopetrol also has an undeniable interest. We want to participate in further exploration of the Caribbean, which is why we have partnered with leading operators that are investing in Colombian offshore. We work with Repsol, Anadarko and ExxonMobil, among others. Anadarko, for example, has already completed 3D seismic exploration of 5400 sq km in collaboration with us.

Together with our partners we would like to learn how to become offshore operators. However, Ecopetrol does participate in offshore blocks in areas such as Brazil and the Gulf of Mexico in collaboration with leading companies like Shell Offshore and Petrobras. The interest of big players will materialise with the first drillings in 2014, when between two and four offshore wells will be drilled with an investment of more than $100m per well. In 2015 we should witness exploration works on up to eight offshore wells. That year could also see Ecopetrol initiating its career as an offshore oil operator by drilling the Molusco well in the RC9 block.

Given the difficulties the company’s stock faced in 2013, what is Ecopetrol doing to address concerns?

GUTIÉRREZ: It was not an easy year. We cannot ignore the challenging situation in the capital markets in 2013, which particularly affected hydrocarbons operators. To raise confidence we need to make sure that expectations are realised. In our case, we hope to put all our efforts into increasing exploration and production once expansion of pipelines and refineries is concluded.