Ecopetrol to Invest Up to $7.5 Billion Annually in Coming Years

Ecopetrol SA, Colombia’s state-run oil company, will invest an average of $7 billion to $7.5 billion annually in coming years, said a company official.

The projected investments don’t include potential acquisition expenditures, Maria Victoria Riano, Ecopetrol’s director of mergers and acquisitions, said yesterday in an interview at an industry conference in La Jolla, California.

Ecopetrol plans to spend $6.9 billion this year as it seeks to almost double crude oil output to 1 million barrels per day in 2015. The company based in Bogota will increase production by 15 percent this year, Riano said. Ecopetrol produced 521,000 barrels a day in 2009.

Ecopetrol is purchasing assets and forming ventures “mainly” on the U.S. side of the Gulf of Mexico and in Brazil as part of its long-term expansion plan, Riano said. The Colombian company may consider investments on the Mexican side of the Gulf, if “Mexico opens a door,” she said.

Petroleos Mexicanos, the state-owned oil company, is seeking to entice foreign companies with performance-based contracts to share risk and provide technology to boost output and expand to deep waters, where Mexico says it has 30 billion barrels of oil. Mexico’s constitution bans private companies from receiving royalties from the country’s oil.

“We’ve been talking a lot with them, but Ecopetrol has not set a position yet about those contracts,” Riano said. “It would be the place to be, it would be better and easier for us to grow in a region where we already have experience.”

The company last week said it bought a 30 percent stake in an offshore block in Brazil where it aims to expand. Ecopetrol acquired Hocol Petroleum Ltd. in May 2009 for $742 million.

Ecopetrol said in February it will borrow as much as $3.5 billion this year to help fund investment.