Houston — The Luna shale formation could help Colombia to increase its recoverable oil reserves by up to 7 billion barrels and 10 Tcf of gas, Ecopetrol CEO Felipe Bayon said Tuesday.
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"This will give our country control over our destiny," Bayon said at CERAWeek by IHS Markit in Houston. "This could be a transformational opportunity for Colombia."
The oil reserves are currently under 2 billion barrels.
Under Ecopetrol's 2019-2021 business plan, the state-led oil company will invest $500 million to develop shale pilot projects, starting with 20 test wells, Bayon said.
"There is actually an opportunity that will allow the country to achieve its energy security," he added.
Developing shale is especially attractive for increasing domestic gas supply as Colombia depends on LNG imports to complement its domestic production.
As part of the company's shale ambitions, it is looking to partner with an expert shale operator in one of US' prolific shale basins, Bayon added.
The most important thing is transferring the US' practical knowledge into Colombia, Bayon told S&P Global Platts on the sidelines of the conference.
"We have looked for opportunities in the US with high detail. Hopefully, the right opportunity will come at the right time," he said.
Bayon told Platts that Ecopetrol's efforts would be focused on Colombia's Luna formation in the Middle Magdalena Valley Basin in central Colombia.
The executive declined to provide technical information such as thickness and organic content, simply saying that Ecopetrol is optimistic about the preliminary data obtained.
A 2015 Energy Information Administration geological report states that Colombia's Luna Formation is 1,000 feet in thickness, highly overpressed, and it has an estimated risked recoverable resources of 4.5 billion barrels of oil and 14 Tcf of gas.
An advantage of the Luna formation is that it is an already-developed basin where the 250,000 b/d Barrancabermeja Oil Refinery is located, Bayon said.
Colombia's production is currently below 900,000 b/d, Bayon said of Colombia's production forecast. Hopefully, with more activity, output will ramp up above this number, he added.
According to data from Colombia's Ministry of Mines and Energy, Colombia produced 899,000 b/d of crude oil in January, an increase of 4.5% from a year ago. Ecopetrol was responsible for over 60% of this production.
-- Daniel Rodriguez, firstname.lastname@example.org
-- Edited by Jennifer Pedrick, email@example.com