Colombia has become one the most attractive countries for foreign investment in Latin America in the O&G sector:​

The country has achieved record figures of growth and economic stability.​

Foreign investment in the O&G sector accounts for 30% of total investments.

Oil production grows at 8% per year, and Oil and Gas reserves have grown by 80% and 50% in the last 6 years.

Exploration activity has intensified, the number of exploration wells has almost doubled in only 6 years. 


According to Oil and Gas Journal (O&GJ), Colombia had 1.9 billion barrels of proven crude oil reserves in 2011, the fifth-largest in South America. These reserves are expected to increase with the exploration of several new blocks that were auctioned in 2010. The country produced an estimated 800,000 barrels per day (bbl/d) of oil in 2010, up from 686,000 bbl/d in 2009.

This trend continued in 2011. The National Hydrocarbons Agency (ANH) reported that Colombian production reached 923,000 barrels per day in May 2011. Colombia consumed 296,000 bbl/d in 2010, allowing the country to export most its oil production.


Sector Organization

Since 1999, Colombia’s government has taken measures to make the investment climate more attractive to foreign oil companies. Upstream sector initiatives include allowing foreign oil companies to own 100 percent stakes in oil ventures and compete with Ecopetrol, the national oil company; the establishment of a lower, sliding-scale royalty rate on oil projects; and longer exploration licenses. The government plans to sell shares of Ecopetrol to private investors, reducing their share to roughly to 80 percent. The reforms have sparked a renewed interest in Colombia’s upstream sector, with record levels of exploratory and development drilling occurring in 2010. According to Colombian central bank, the oil sector received $2.86 billion in foreign direct investment (FDI) in 2010, which partially offset FDI losses in the mining sector.

In June 2010, Colombia conducted its latest oil sector bidding round, which included 228 exploratory blocks. The round featured both known hydrocarbon-rich areas as well as frontier regions, such as offshore blocks in the Caribbean Sea and the Pacific Ocean. However, the ANH only awarded 76 total licenses in well-established areas in the round.

Prior to 2008, Colombia’s oil production had remained largely flat for many years. This followed a period of steady decline that started in 1999, when Colombia’s oil production peaked at 830,000 bbl/d. The principle cause of the fall in oil production was natural declines at existing oil fields and a lack of sizable new reserve discoveries. However, a combination of changes to the regulatory framework and an improved security situation has contributed to increasing investment in the country. The improvement in Colombia’s security situation has also been a significant contributor to the renewed interest by international oil companies. Pipelines and other energy infrastructure are still the targets of attacks by guerrillas, but the number and severity of these attacks is much lower than in the past. According to the Colombian government, there were about 31 attacks against pipelines in 2010, compared with hundreds of such incidents that occurred per year in the early 2000s.

As a result of these improvements, Colombia has reversed the decline in its oil production and recently experienced rapid growth. EIA forecasts that Colombia’s oil production will increase in the next two years. In the June 2011 edition of the Short Term Energy Outlook, EIA projects that Colombian oil production to rise to 910,000 bbl/d in 2011 and to surpass the one million barrel per day mark during the third quarter of 2012.


Oil Exports

The United States is the largest destination for Colombia’s oil exports. In 2010, Colombia exported 365,000 bbl/d of crude oil and refined products to the United States. Most of these exports flowed into PADD 3 (Gulf Coast, 79 percent), followed by PADD 5 (West Coast, 13 percent) and PADD 1 (East Coast, 8 percent). China was Colombia’s second-largest oil export destination in 2010, followed by Japan. China has recently expressed interest in financing new infrastructure projects in Colombia to facilitate the transport of oil to the Pacific coast for export.



Colombia has six major oil pipelines, four of which connect production fields to the Caribbean export terminal at Covenas. These include the 500-mile Ocensa pipeline, which has the capacity to transport 615,000 bbl/d from the Cusiana/Cupiagua area; the 460-mile Cano Limon pipeline; and the smaller Alto Magdalena and Colombia Oil pipelines. The Llanos Orientales came online in late 2009, which links the Rubiales field to the Ocensa pipeline. The system will eventually have a capacity of 260,000-bbl/d. The sixth pipeline, the TransAndino, transports crude from Colombia’s Orito field in the Putumayo basin to Colombia’s Pacific port at Tumaco; TransAndino can also carry crude oil produced in Ecuador. In November 2010 Ecopetrol announced that it is partnering with an international consortium to develop the Oleoducto Bicentenario pipeline. The $4.2 billion project will have a capacity of 450,000 bbl/d and is scheduled for completion in December 2012.

Currently Santa Maria Petroleum participates in four blocks in the Llanos Basin: Llanos 21 block, Llanos 27 block, Llanos 36 block and the Canaguaro block. The Llanos Basin is situated in East-Central Colombia and is one of the country’s most prospective basins. Targeted reserve sizes in this area of the Llanos Basin are in the range of the 1 MMbbls to 954 MMbbls recoverable according to the December 2009 Monthly Statistical Bulletin of ACIPET. Management has a good understanding of the petroleum geology in the Llanos Basin where oil fields have strong water drive and individual wells can produce between 0.3 MMbbls and 1.5 MMbbls of oil per well.