Industry Trend Analysis - Offshore Focus Will Sharpen In 2017 - APR 2017
BMI View: Exploration activity will increase in Colombia over 2017, with much of the investment directed offshore. Ecopetrol will lead the charge, having recalibrated its spending to focus in deepwater acreage.
Following more than two challenging years with limited upstream development, investment is set to return to the Colombian upstream in 2017. A number of smaller private partners have already boosted their spending commitments for the year, with GeoPark having announced two discoveries on February 3. The two wells - Chiricoca 1 and Tigana Sur 6 - were located in Colombia's Llanos 34 block which houses some of the country's largest onshore deposits.
Though promising, we believe greater exploratory success will be achieved in Colombia's deepwater acreage. State-owned Ecopetrol, which operates over 60% of the domestic market, will lead these efforts. The company has been shifting its efforts upstream since 2015, with a particular focus offshore ( see ' Upstream Focus Shifting Offshore ' , November 12 2015). Notably, in January 2016, the company announced the formation of a new subsidiary known as Ecopetrol Costa Afuera Colombia, which will take lead on exploration and production activities in the country.
|More Spending Heading Upstream|
|Ecopetrol - Capex Distribution by Segment (%)|
|Source: Ecopetrol company data|