BOGOTA – Colombian state oil company Ecopetrol said on Wednesday it expected to invest between $3.5 billion and $4 billion next year, an increase of up to 55 percent from its projected investment at year-end 2017.
“The 2018 plan approved by the Board of Directors is aimed at increasing reserves and hydrocarbon production, capturing earnings through an improved international environment for the sector and advancing along the path of efficiency,” the company said in a statement.
Ecopetrol plans to allocate 85 percent of its budget to exploration and production and increase its investment in those segments by more than $1 billion compared to 2017.
In addition, 96 percent of the investment will be executed in Colombia, with the rest being designated for projects in the United States (Gulf of Mexico), Mexico, Brazil and Peru.
Ecopetrol said it expected to drill 620 development wells and at least 12 exploratory wells, use 28 drilling rigs and acquire more than 41,000 kilometers (25,476 miles) of seismic studies.
Under those projections, the company would drill an additional 140 wells and use 16 more rigs than it did in 2017.
In 2018, the company expects to produce between 715,000 and 725,000 barrels of petroleum equivalent per day and achieve a milestone in terms of refining of between 350,000 and 575,000 barrels of petroleum equivalent processed per day.
The 2018 investment program will be financed with internal cash generation, the statement said, adding that the company would not need to seek outside financing.
In that regard, Ecopetrol said it had a solid cash position of $4.3 billion and a ratio of gross debt to EBITDA (earnings before interest, taxes, depreciation and amortization) of 2.1 times at the close of the third quarter of 2017, which “confirm the financial flexibility for inorganic growth focused on the increase in reserves.”
Ecopetrol accounts for more than 60 percent of domestic crude production and is involved in exploration and production activities in Brazil, Peru and the US Gulf Coast.