(Bloomberg) – Gran Tierra Energy Inc. plans to pump up to 10% more oil from its fields in Colombia and Ecuador this year following an investment in technology that injects water to increase the pressure.
The Canadian company is seeking to increase production in Colombia, which accounts for the bulk of its production, by improving techniques such as adding so-called water injection facilities in the main fields. It’s a way to grow in a country that may not be offering new contracts since President Gustavo Petro promised to move the economy away from fossil fuels.
“All the investments have already been made,” said Manuel Buitrago, who heads the Colombian unit of Gran Tierra, in an interview at a conference in Cartagena this week. “Our focus has always been on financial discipline and technical best practices.”
Gran Tierra has 21 blocks in Colombia and three in Ecuador, where it began production last year. The Calgary-based company expects production of 32,000 to 34,000 barrels of oil per day on average this year, up from 30,800 last year, he said.
The company is focusing on existing contracts in both countries and plans to invest up to $250 million this year, primarily in Colombia. It has made two discoveries in each country in 2022 and will have four to six exploration wells this year, Buitrago said.
President Petro’s promise to phase out the economy’s dependence on oil and coal weighed on Colombian assets as well as producer stocks. Gran Tierra has lost more than 40% in Toronto since Petro’s election in June, while Colombian state-owned Ecopetrol SA is down 14% in Bogotá.
The Minister of Mines and Energy, Irene Vélez, has repeatedly indicated that the government will not sign new oil contracts. But joint statements this week from the ministries of mines and energy, finance and trade indicate the need is still being analysed. Saying that there will be no new contracts “for now” does not mean that there will never be new contracts, Deputy Energy Minister Cristian Andrés Díaz said on Thursday during of the conference.
Original note: Gran Tierra will extract 10% more crude thanks to water injection
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