With a price per barrel of crude oil close to US$100 derived from the tension over a possible Russian invasion of Ukraine, it will not only allow the country balance your cash for an increase in oil incomebut in passing will help boost productionwhich would clear the way for it to produce the average million barrels per day (bpd).
(Oil reaches its highest price in 7 years due to crisis in Ukraine).
At the close of trading yesterday, Tuesday, the price in the reference Brent marked US$96.84 per barrel, a price not recorded for eight years (September 9, 2014 with US$97.20), which would represent an increase in extraction for Colombia of close to 240,000 bpd, compared to the account estimated by the Colombian Oil and Gas Association (ACP) of 760,000 bpd, since would optimize the operating costs in the field.
And if the accounts of the sector projected a month ago that, with a barrel of crude above US$90, it would allow the country a production close to 900,000 bpd, now with a price of US$3.16 to reach US$100, pumping would be one million barrels per day.
In the case of ecopetrol, its spokesmen stressed that with a price close to US$100 a barrel, it does not generate immediate financial results, but yes, it will start to increase production.
“The level of extraction will increase. For this year we will be above 705,000 bpd, and by 2030 the record would be between 850,000 and 900,00 bpd, thus exceeding one million barrels”, explained the source consulted.
(Conflict between Russia and Ukraine from A to Z).
And he added that the important thing for the oil company is that crude oil production be profitable. “We have an equilibrium price of minus US$40 per barrel and we want to leave it there. This allows the company to earn a lot when the price rises, and to resist if there is a drop in the price. It’s not just about producing more, but doing it for a good profit,” he said.
With a barrel price close to US$100, exploration tasks will increasethe improved recovery processes and the production of heavy crude oil would be activated even more, offshore activities would be accelerated, and the development of unconventional oil would be given a boost.
“The situation of high oil prices is an opportunity for the country to give more dynamism to the industry and take advantage of this cycle to generate the resources that the treasury needs not only for reactivation, but also for the implementation of social policies, let’s remember that for every dollar that the Brent reference price increases”, said Francisco José Lloreda, president of the ACP.
But not only the crisis due to the Russia-Ukraine conflict will allow Colombia to make its oil operation more dynamic due to the price of a barrel of crude oil that is close to US$100, but also the national coal has its quarter of an hour to expand exports to Europe.
(Biden imposes sanctions on Russia after ‘beginning of invasion of Ukraine’).
“The old continent depends to a large extent on the gas reserves of Russia, which is one of its largest suppliers, but the closure of the gas pipeline that goes from this country to Germany, as a response to the actions taken by Moscow with respect to the independentist territories of Ukraine, leaves Europe without one of its most important fuel supplies, in the context of a situation in which the price of coal is very high”, explained Nicolás Arboleda, head of Energy, Mines and Infrastructure at Baker McKenzie.
The analyst added that the “rise in coal prices benefits producers locals who, even though they have committed a large part of their production under long-term sales contracts, will see higher incomes after the increase in the indicative market prices (at the close of yesterday US$189 a ton), and which will possibly last longer and accentuate more with the measure taken by Germany”.
The situation for thermal plants in Europe is not going to be easy since they will have to look for coal from different sources to supply gas, which will lead to the mineral price continuing to rise, which will benefit national production.
ALFONSO LOPEZ SUAREZ
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