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Colombia needs more oil exploration, reserves, Minister says

BY DAN MOLINSKI

BOGOTA -- Colombia Energy Minister Federico Renjifo said he loses sleep worrying about the country' s oil reserves--which at the current rate will last another eight years--and urged more spending on exploration.

Colombia has experienced an oil-output boom starting in 2005, and is now Latin America' s fourth-largest crude producer, with production of nearly 1 million bopd. But the country hasn' t had a major discovery in several years, and many oil fields that were once big producers, such as Occidental Petroleum Corp.' s Cano Limon, are past their prime and producing far less.

"Increasing reserves keeps me up at night more than reaching one million barrels a day" production, said Mr. Renjifo. Proven oil reserves were 2.3 billion bbl at the end of last year, vs. 2.1 billion bbl in 2010.

Colombia' s economy has become increasingly dependent on oil. Crude-oil sales abroad account for more than 50% of exports and are its main source of foreign revenue, leaving coffee, coal and other traditional exports well behind.

The oil sector could get a huge shot in the arm if the Colombian government is successful in upcoming peace talks with the leftist guerrilla group FARC. The peace talks, the first formal negotiations in a decade, begin in a few days in Norway and aim to put an end to 50 years of war.

FARC, which in Spanish stands for the Revolutionary Armed Forces of Colombia, remains a serious threat in many regions of the country--including oil-rich zones--so if the rebels were to lay down their arms that could pave the way for rising exploration.

Dow Jones Newswires

10/11/2012

 

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