Colombian oil company Ecopetrol S.A. (NYSE:EC), has established an ambitious growth plan that will nearly double the company's production, by the end of the decade. This growth will be achieved mostly through exploration and development, in domestic oil and gas fields at home. (For related reading on oil, read What Determines Oil Prices.)
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History
Ecopetrol used to be known as Empresa Colombiana de Petr├│leos and, until recently, was completely owned by the Government of Colombia. In 2006, Colombia started a transition to private ownership, with an authorization of a maximum 20% share by the private sector. Ecopetrol has conducted two share offerings since that time, lowering state ownership to approximately 88%.

Capital Budget
Ecopetrol recently approved an $80 billion oil and gas capital budget from 2012 to 2020, with 85% of the funds devoted to upstream exploration and development projects. Ninety percent of the capital will be concentrated on projects in the company's home country of Colombia. If the company's plan is successful, Ecopetrol expects to be producing 1.3 million barrels of oil equivalent (BOE) per day, by 2020. Ecopetrol expects production to average 750,000 BOE per day in 2012.

Exploration
Ecopetrol plans to drill 42 exploration wells across the company's portfolio in 2012, with 36 of these wells in Colombia. The other six wells will be drilled in Brazil and the deepwater Gulf of Mexico. Ecopetrol is also evaluating various shale and other unconventional resource plays in Colombia. These include coal bed methane, shale gas, tar sands and tight sands areas.

Current Fields
Ecopetrol also plans considerable investment in 2012 in currently producing oil fields in Colombia. The company has an interest in the Castilla field, which is the largest producing field in Colombia. Ecopetrol has budgeted to drill 60 wells here, in 2012.

In total, Ecopetrol plans to drill more than 400 wells at Castilla and several other producing oil fields in 2012. This development plan is an important component of the company's strategic plan, as production from existing fields is expected to be 65% of the 2020 production target.

Other Players
Other operators active in Colombia include Nexen (NYSE:NXY), which owns an interest in several blocks. The company is currently exploring shale gas potential on its acreage and plans to drill four exploration wells here, in 2012.

Occidental Petroleum (NYSE:OXY) is also active in Colombia and has interests in two onshore areas. The company is credited with the discovery of one of the country's largest oil and gas fields, back in the early 1980s. Some operators see better opportunities elsewhere. BP (NYSE:BP) sold the company's Colombian assets to Ecopetrol and Talisman Energy (NYSE:TLM) in early 2011, for $1.75 billion.

The Bottom Line
Ecopetrol is a relatively unknown oil and gas company, due in part to the small public float and resource concentration in Colombia. This low profile does seem at odds with the company's $85 billion market capitalization, and Ecopetrol should attempt to accelerate this privatization process, to attract more investors. (For additional reading, check out A Primer On Offshore Drilling.)

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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