Ecopetrol is to assume full control of oil extraction in Colombia’s Los Llanos region after buying out the Spanish company Repsol, which had previously operated in the area. The deal means that Colombia’s state-owned energy company will have exclusive control over oil extraction in this part of the country.
In a statement issued last night, Ecopetrol confirmed that it would take over Repsol’s stake in oil extraction via a Joint Operating Agreement (JOA) with the oil and gas exploration and production company, Geopark.
Ecopetrol to monopolize oil extraction in eastern Colombia
Ecopetrol’s purchase of Repsol’s former oil extraction operations will make the Colombian company the only entity extracting oil in eastern Colombia, an important region for oil.
The acquisition will enable Ecopetrol to increase its production by approximately 41 million barrels. The purchase will also enable approximately 7,000 additional barrels of oil to be extracted from Colombia’s Eastern Plains, or Llanos Orientales.
To complete the purchase, Ecopetrol needs to finalize legalities with the State control agencies, which is expected to take place over the coming days.
At the end of May 2023, a crude oil reserve was discovered in the Eastern Plains approximately 7,500 feet or 2.2 kilometers under the ground. During evaluations of the reserve and connected drilling work, 7,329 barrels of heavy crude oil were produced.
According to Colombia’s National Hydrocarbons Agency, this will provide the country with sufficient oil for the next 7.5 years and represents an increase of 1.7% in general reserves compared to those recorded at the close of 2021. In 2022, Colombia’s confirmed oil reserves stood at 2,074 million barrels.
Spanish company Repsol leaves Colombia
Prior to its takeover of Repsol’s operations, Ecopetrol already controlled 55% of oil exploitation in Colombia, while Repsol managed the remaining 45%. The new agreement means that Ecopetrol now controls all oil exploitation in Colombia’s Eastern Plains. It also confirms Repsol‘s exit from Colombia.
“This operation strengthens Ecopetrol’s position in the [oil] exploitation of the Eastern Plains basin and consolidates its presence in the region,” Ecopetrol said in a statement.
Repsol has been selling its assets in Colombia over the last few weeks after 40 years of operating in the country. Most were assumed by Latin American company GeoPark in a deal worth US$530 million.