Ecopetrol, PDVSA to Form Venture to Produce Venezuelan Oil

Colombia will develop a plan with Venezuela to tap reserves at aging oil fields as the neighboring countries strengthen energy ties.

The venture would drill for oil in two blocks located in western Venezuela’s Lake Maracaibo, Colombian Mines and Energy Minister Mauricio Cardenas said on Twitter. He met today with Venezuelan Oil Minister Rafael Ramirez in Cartagena, Colombia.

Colombian President Juan Manuel Santos has sought to improve ties with President Hugo Chavez since taking office in 2010 by reviving trade, renewing energy accords and considering ventures with state-run oil company Petroleos de Venezuela SA, known as PDVSA. Relations between the countries deteriorated during the prior administration of President Alvaro Uribe, who said Venezuela harbored Colombian rebels. Chavez has denied the claims.

The board of Ecopetrol SA (ECOPETL), Colombia’s largest oil company, has to review the plan for the venture to begin in October, newspaper La Republica reported. Cardenas said the venture would seek to increase output at the fields to 100,000 barrels a day from 40,000 barrels a day, the newspaper reported.

Officials also met today to consider development of an oil pipeline linking Colombia’s Pacific coast with Venezuela, and a separate project to carry Venezuelan gas through Colombia to Central America, Cardenas said prior to the meeting.

Ecopetrol has increased production by investing in new fields, while output growth at PDVSA has stagnated.

Ecopetrol slid 0.4 percent to 5,380 pesos at 3:00 p.m. in Bogota.

To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net