Colombians elected Juan Manuel Santos as their new president on June 20, the day AAPG’s presidential delegation landed in Bogotá for a whirlwind tour with both tactical and strategic importance.
From there, AAPG President John Lorenz, Regions Vice President Alfredo Guzmán and Sections and Regions Manager Carol McGowen went to Cartagena, Colombia, and then to Lima, Peru – two Latin American Region countries and three cities in five days.
AAPG Region officers Enrique Velasquez (president), of Ecopetrol; Miguel Ramirez (president-elect), retired ExxonMobil; Victor Vega (vice president), BP; and Victor Ramirez (secretary-treasurer), Ecopetrol, accompanied the delegation throughout the ambitious schedule of appointments with 13 national and international oil companies plus four universities.
AAPG affiliates Asociación Colombiana de Geólogos y Geofísicos del Petróleo (ACGGP) and Sociedad Geologica del Peru (SGP) were hosts.
In Colombia, the AAPG delegations met with industry leaders who expressed belief that Santos, the former defense minister to the current president Alvaro Uribe, will have a priority to ensure Colombia’s security against guerilla resurgence when he takes office on Aug. 7.
The rapidly growing number of companies and many global partnerships now investing and working in Colombia and Peru seem a clear indication that the industry is less concerned about past terrorism threats, and are now eager to participate in the current resurgence of exploration activity for the region’s abundant natural resources.
In terms of industry activity, the timing of AAPG’s visit to the region could not have been better. As recently as April, World Bank’s regional chief economist Augusto de la Torre said in his economic forecast for Latin America (www.worldbank.org/co), “The region’s demonstrated resilience to economic crises and investment-friendly local conditions will raise the relative appeal of many Latin American countries as destinations for foreign direct investments.”
Indeed, without exception, each company visited by AAPG confirmed the reality of de la Torre’s forecast. The present pro-business economic climate in Colombia and Peru is attracting both local and foreign-direct investments in energy exploration and production by companies of all sizes.
Some estimates count the number of new companies entering the market in Colombia at nearly 40. For example:
- Talisman Energy, headquartered in Canada, entered the market in Peru in 2004 from an office in Lima.
- Talisman (Colombia) Oil & Gas opened its Bogotá office one year ago.
- Houston-based Remora Energy opened an office in Bogotá in 2008 for its subsidiary, Columbus Energy’s Sucursal Colombia.
“Now that security is good, companies are hungry to work on Colombia’s amazing geology,” said AAPG member Stephen Hermeston, Remora Energy new ventures manager.
Service companies Halliburton and Schlumberger can easily quantify the growth in industry activity in the region. Hermes Aguirre, Colombia country manager for Halliburton, said that rig activity has increased nearly 300 percent, from 20-25 rigs operating in Colombia in the past two or three years to 80 actively drilling rigs in 2010. Halliburton’s 2009 capital investment in equipment of $80 million USD is the company’s largest such investment in the last 10 years.
Also, the number of workers employed by Halliburton in Colombia has nearly doubled in the past three years, increasing from 600 to 1,100 employees.
Large international oil companies working in Colombia during this time of intense activity include Petrobras, BP and Shell. And like E&P companies worldwide, they recognize the critical shortage of skilled workers and are taking steps to develop the next generation of their workforce.
BP, for example, which has been operating in Colombia for 23 years, places an emphasis on developing the local work force – its entire management team there is comprised of native Colombians. For students and recent graduates, the company offers internship programs.
While in Bogotá, the AAPG group also met with ACGGP President Ivan Olaya and other ACGGP representatives at the association’s offices. There, students from the Universidad Nacional de Colombia in Bogota, Universidad Industrial de Santander in Bucaramanga, and EAFIT University in Medellin gave presentations about the activities of their AAPG student chapters.
The newest Student chapter at Universidad Nacional de Colombia was formed earlier in 2010 through the “enthusiastic support” of AAPG’s Latin American Region, according to Chapter president Ignaccio Iregin.
All three universities were straightforward in discussing their needs for software, books and ongoing support from AAPG and ACGGP. They all plan to collaborate with other universities to help start new student chapters and research groups, and to mentor new IBA teams.
Following Bogotá, the AAPG group’s flight to Cartagena arrived in plenty of time before the start of the Colombia Oil & Gas Investment Conference/World Petroleum Council Regional Meeting, scheduled at the historic Teatro Adolfo Mejia.
The immediate concern was an important meeting scheduled prior to the opening ceremony with Hernan Martinez, Colombia’s minister of mines and energy, and Armando Zamora, director general of ANH – both of whom shared their perspectives on the transformation of Colombia’s energy industry and prospects for the future.
Zamora was quick to credit Uribe for creating a democratic environment in Colombia to move forward the national economy. He reported the results of the previous day’s bidding round in which bids by companies worldwide were made on 96 of 229 blocks offered in all of Colombia’s basins both on-shore and off-shore, including Nicaragua’s Los Campos Basin, for a total 2011 investment of $1.2 billion USD.
Bidders included 12 new companies not previously working in Colombia.
In Lima, the AAPG team was warmly welcomed at SGP headquarters by SGP President Pedro Alarcon, past president Barbara Bruce and many other SGP members. John Lorenz was presented with a gold replica of an Incan warrior, and a pledge was made to maintain closer ties between AAPG and SGP.
AAPG stands ready to disseminate the latest science to aid explorationists working in Latin America. Whether coordinating regional AAPG lecturers on cutting edge topics, providing training for new hires, access to AAPG digital data archives or book donations to universities, or partnering with our affiliate societies to offer conferences, AAPG is eager to build upon the ideas and relationships generated from this regional visit.
It is with sincere appreciation that AAPG thanks the Latin American Region officers and their companies for their time and dedication to help organize this important trip, as well as our host societies, ACGGP and SGP.
In Colombia, AAPG is grateful to Minister of Mines and Energy Hernan Martinez; director general of ANH, Armando Zamora; and the president of national oil company, Ecopetrol, Javier Gutierrez, for the generosity of their time and hospitality.
Thanks also to Talisman, Remora Energy, PetroBras, Shell, Chevron, BP Colombia, Pacific Rubiales Halliburton and Schlumberger for welcoming AAPG into their offices. In Peru, sincere thanks go to Plupetrol, Savia Peru, Ecopetrol Peru and Talisman.