This year's XV Congress of Oil and Gas, held by ACIPET which has its own headquarters located in an exclusive area of Bogota, had over 220 companies in attendance coming from Canada, China, the US and other Latin American Countries. The conference focused on Colombia's Oil and Gas future, which seems to be heading in the direction of utilizing and exploring Colombia's unconventional oil and gas reserves as well as developing offshore reserves. The potential in this area is expected to be vast with the possible 9.3 billion barrels throughout 21 blocks of unconventional reserves and 20 blocks of offshore for future exploration.
ACIPET (The Colombian Association of Petroleum Engineers) and ANH (The National Agency of Hydrocarbons) are working in unison and in cooperation with the Colombian government to issue environmental regulations for these potential unconventional reserves in the coming months, aiming for exploration permits to be given for mid-late 2014.
With this in mind; manufacturing, technology and production companies from around the world were in attendance at the conference looking to settle into Colombia for the coming years and Colombia's future potential. While Colombia has great potential in unconventional reserves the country is currently further behind with regards to expertise and technology in this are which they are quickly remedying. Universities throughout the country have joined with various Oil and Gas companies to develop their training towards unconventional oil and gas such as Ecopetrol with the Universidad de las Andes in Bogotá and Petroskills. Colombia has also benefitted greatly from mass immigration from Venezuela due to political instability which has lead to an abundance of skilled assets joining the Colombian oil and gas sector, such as with Pacific Rubiales Energy.
While Colombia has had delays with permits and has more extensive environmental regulations than most of its surrounding Latin American countries, its potential coupled with its political and stability has made Colombia the ideal Latin American base for many companies, with Bogotá being the center of that base.
Bogotá is not only the and largest city in Colombia, but is also fast becoming the Oil and Gas center of the country with 84% of all oil and gas service companies being located in the city. Bogotá and Colombia also have a variety of tax and business incentives such as 8% royalties, no remittance tax, deductable local taxes, a flexible government take and free trade agreements with many of the surrounding countries and most of the Americas.
Another large factor for Colombia's oil and gas future is the country's increase in infrastructure for though there are many cost benefits to drilling and manufacturing within the country, transportation continues to be an issue. This are is being looked at by the government and private sector with current Colombian President Juan Manuel Santos pledging $100 billion for the next decade and the upcoming completion of the 975km Bicentennial Pipeline.
After attending this year's conference the growing momentum and energy of Colombia's oil and gas industry was palpable with many companies seeming actively excited for the upcoming years in Colombia. The country stands as one of the most successful countries in Latin America as far as political and financial stability are concerned and with its highly skilled labor and support towards international investment, Colombia looks to have a great outlook for the next five to ten years. The Colombian government definitely has some ground to cover over the next few years regarding environmental permits and regulations and an improved infrastructure but with growing interest from outside and cooperation with the private sector these goals could be achieved on schedule.
Investorideas.com staff: Taylor Van Zant