Exploration and Production

Production

In the year 2009, Ecopetrol incorporated additional volumes to its production from its new affiliates Hocol and Savia Peru. Thus, thanks to the contribution of 15.4 thousand barrels equivalent per day (kbepd) from Hocol S.A. and 6.12 (kbepd) of Petrotech, and a material organizational growth through assets managed by the company, including the K2 asset in the Gulf of Mexico, Ecopetrol’s production increased by 17%, reaching 520.6 thousand barrels per day, 496 thousand barrels of crude and 94.6 thousand barrels of gas equivalent.

A particularly important production performance was achieved in 2009, not only in identifying and structuring new projects in the investment portfolio, which will enable to keep the increasing recovery trend in the fields it manages, but also in increasing rude and gas production levels in these fields.

Investment in production activities in the year 2009 totaled US$2,168 million, with US$961 million corresponding to investment in association operation fields and US$1,207 million to investment in fields operated directly by Ecopetrol. In the year 2009, 430 wells were drilled in associated operations and 157 in direct operation for a total of 587 wells.

As regards crude production by Ecopetrol, not including its affiliates, a 12% increase was recorded last year, from 361,000 barrels per day in 2008 to 405,000 barrels per day in 2009.

This growth is attributed mainly to production performance in:

The Chuchupa Field located in La Guajira is a major
producer of natural gas in Colombia

Heavy Crude

In direct operations, heavy crude production from the Chichimene and Castilla fields increased from 75 kbpd in 2008 to 91 kbpd in 2009.  During the year, 35 wells were drilled and, furthermore, well work maintenance, workover, and fracturing jobs were carried out, as well as facility upgrade. Similarly, in the year 2009, early operations began in the Acacias station, with crude treatment capacity of over 40 thousand additional barrels, upgrading of the Castilla 2 station and Chichimene, and the Termosuria power generation plant started operations, with an installed capacity of 39 MW. 

On the other hand, in the Rubiales–Piriri Association Contract fields, total production increased from 36.8 kbpd in 2008 to 68.7 kbpd in 2009, which represents an 87% increase  in production volume; the investment leading to such increase in the Rubiales field includes not only drilling activities, which added up to 105 wells in the year 2009, but also projects to support the current and future development of this field. 

Also in 2009, the first phase of the power generation center started to operate; the production facilities-1 were expanded to 100,000 barrels; purchases of long lead equipment were initiated, as well as the conceptual and basic engineering for the production-2 facility; and new commercial areas were incorporated thus increasing hydrocarbon reserves.

In the Nare Association Contract, in a drilling campaign of 67 wells, 27 corresponded to horizontal wells drilled in the Girasol field, with successful results that have led to a 10% increase in production, for an overall average of 20.7 kbpd.

Mature Fields

There was continued increase of production from mature fields where water injection is taking place.  In La Cira-Infantas, production increased by 30% as compared with the year 2008, reaching an average of 21.0 kbpd.   In the year 2009, 168 wells were drilled.

In the Casabe field the investment allowed for drilling a total of 65 wells and the upgrading of the injection facilities, which resulted in a total average production of 12.8 kbpd, that is, a 21% increase as compared with the previous year.  In 2009, the water injection project continued in the Yariguí–Cantagallo field, where production averaged 11.4 kbpd. 

Other mature fields that in 2009 contributed significantly to production include the operation associated with Caño Limón with a total of 49.2 kbpd and Cusiana–Cupiagua–Pauto in the Foothills area with a total of 69.9 Kbpd. 

In 2009 there was significant investment in the Llanito direct operation fields (10 wells), with average production of 6.1 Kbpd, representing a 16% growth with respect to the previous year; in the Apiay areas (11 wells), where production increased by 2.2 kbpd, reaching an average of 19.6 kbpd and in the western area of the South regional (5 wells).  Other interest areas where material activities were carried out (12 wells) include Provincia, Lisama, Tesoro and Nutria with a permanent average crude production close to 6.6 kbpd.

Gas

With regard to gas production in the year 2009, growth was nearly 9%, averaging 93 Kbepd.  The year 2009 was a maximum demand year for the La Guajira fields as a result of exports and domestic demand from the generation park in the second half of the year.

Investment plans intended to increase gas supply, with the quality conditions provided for by its regulation, have resulted in increased gas reserves from the Foothills and guaranteeing a medium term market for this hydrocarbon. 

In the year 2009, investment execution continued in the gas treatment plants and the Cusiana LPG plant.   The first one will expand the gas treatment capacity by 70 million cubic feet per day (mfcd) and the expected production of this fuel at the LPG plant in the year 2010 amounts to 6,900 barrels. 

Lastly, it is worth noting that the lifting cost decreased by 11% as compared with the year 2008, which translated into an average US$7.50 per barrel in the year 2009 for all company operated and non-operated assets.