Page 12 - LatAmOil Week 24

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The same landslides that affected SOTE in mid- and building a second bypass along an 1,800-
April also took another key oil transport sys- metre section of the route, are still being taken.
tem – the Heavy Crude Pipeline (OCP) – out of The bypass is due to be completed this month.
action. OCP is privately owned by Spain’s Rep-
sol, China’s Andes Petroleum, the US independ- Output from the former OPEC nation has
ent Occidental, Argentina’s Pampa Energy and taken a hit in recent weeks because of the dam-
the Anglo-French independent Perenco. When age to the two pipelines, combined with a major
fully operating, it pumps an average of 173,086 slide in global fuel demand stemming from the
bpd, according to government data. coronavirus (COVID-19) pandemic. Ecuador’s
OCP was able to resume operations last national oil regulator ARCH reported that aver-
month, as it is situated further away from the age crude production in May reached 348,118
erosion that has continued to affect the SOTE. bpd, down from 521,927 bpd in the first quarter.
It did so after the construction of a 1,700-metre The decline in output comes as a blow to
bypass, mostly underground, in the area where Ecuador’s government, which depends heavily
the pipe ruptured in April. But precautionary on oil revenues. Crude is the country’s biggest
measures, such as digging four oil drainage pits export. ™

COLOMBIA
Colombia set to award pilot

fracking contracts this year

COLOMBIA’S government is on track to award could also attract $5bn per year in investments,
contracts for pilot projects involving hydraulic according to estimates from the Colombian
fracturing (fracking) this year, as it tries to accel- Petroleum Association (ACP).
erate plans for kick-starting unconventional ANH had said previously that it intended to
oil and gas production, according to a senior launch pilot fracking projects this year, after a
energy official. moratorium on unconventional drilling was
“There is a call [for proposals] for those who lifted by the country’s top administrative tribu-
will do pilot projects,” said Armando Zamora, nal, the Council of State. Government officials
the head of Colombia’s national hydrocarbons say now, though, that projects are unlikely to
regulator, ANH. start before next year because the coronavirus
“An environmental licensing [process] will (COVID-19) pandemic has led to cuts in invest-
begin at the end of the year. And that will deter- ment budgets, according to local reports.
mine, depending on whether the conditions Prior to the virus outbreak, Colombia’s gov-
exist, if it is feasible to do the pilots. But in Sep- ernment had been expecting oil production to
tember or October contracts will be awarded,” average 890,000-900,000 bpd this year. Recently,
he told a local daily, La República. though, it cut its forecast to 750,000-850,000
A number of foreign majors including Exx- bpd.
onMobil (US), ConocoPhillips (US), Parex At the beginning of 2020, Colombian oil
(Canada), Drummond (US) and the state- output amounted to around 880,000 bpd, and
run oil firm Ecopetrol have already submitted around half of the total was being exported. ™
plans to undertake unconventional pilots in
Colombia.
The South American state’s Mines and
Energy Ministry is reportedly finalising a draft
of its regulatory framework for fracking.
Energy experts have predicted that the intro-
duction of fracking could triple Colombia’s oil
and gas reserves. This would be a welcome
development, as many of the country’s conven-
tional fields are mature and their reserves are not
being replaced with new discoveries. At present
rates of development, the lifespan of the coun-
try’s oil reserves currently amounts to around
six years.
If unconventional fields come online,
though, they could add as much as 450,000
barrels per day (bpd) to output levels. They Previous fracking initiatives have sparked protests in Colombia (Photo: Desde Abajo)

P12 www. NEWSBASE .com Week 24 18•June•2020