November 16, 2018 / 7:03 PM / a month ago

Colombia's private crude producers cautiously optimistic about Duque

BOGOTA, Nov 16 (Reuters) - Private oil producers in Colombia said on Friday they are optimistic about promises by President Ivan Duque to improve security and bolster the sector.

Duque, who has been in office for 101 days, pledged during his campaign to lower taxes on businesses and improve security for crude producers in the country, where leftist rebels regularly bomb pipelines and community protests sometimes stymie output.

“We’re seeing progress - we have all the confidence in the world in the administration,” said Occidental Petroleum chief executive Vicki Hollub, on the sidelines of an oil and gas conference in Bogota.

Occidental operates the Cano Limon field in eastern Arauca province. The Cano Limon pipeline, run by state oil company Ecopetrol, has been offline for most of the year because of attacks by the National Liberation Army (ELN) rebels.

Production and exports from the field have remained normal despite the bombings because Ecopetrol is able to use the smaller Bicentenario pipeline for transport.

Though the pipeline is currently shut, it was attacked repeatedly last weekend.

Hollub, who said Occidental hopes to more than double its 30,000 barrels per day net output in the coming years, was optimistic about the security situation.

“The military is incredible here.”

Oil companies may be among those who benefit from a proposed tax cut to corporations that is wending its way through Congress. The government wants to reduce duties on businesses to 30 percent over the next four years, down from 35 percent.

Other private producers were more cautious.

“It’s still early but all the signs are positive,” said Frontera Energy chief executive Richard Herbert.

“What we need now is security in prospective, less developed areas,” he said, adding that blocks won by Frontera back in 2010 in southern Caqueta and Putumayo provinces have not been developed because of ongoing security worries.

Herbert said he hoped there would be a new bidding round in 2019 so further oil areas could be opened to exploration.

Colombia has repeatedly delayed its deadline to receive offers for 15 onshore areas at its Sinu-San Jacinto auction. The round would be the first since 2014.

Frontera estimates its average production will end 2018 at 66,000 bpd, some 57,000 of which comes from fields in Colombia.

Speaking at the close of the conference, mines and energy minister Maria Fernanda Suarez said she was confident the oil sector would continue to contribute to the country’s development and its bid to become energy self-sufficient. (Reporting by Julia Symmes Cobb Editing by Phil Berlowitz)

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