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Oil Will Go ‘’Bust’’ If Recession Hits

Oil Will Go ‘’Bust’’ If Recession Hits

Oil prices fell on Thursday…

Major Colombian Oil Field Resumes Production

Oil

The La Cira Infantas oil field in Colombia has returned to production after protesters shut it off in May in response to legislative changes concerning the oil industry. The return to production will give Ecopetrol more than 35,000 bpd in output, after protests forced the shuttering of 667 wells.

The resuming of operations at the La Cira Infantas followed an agreement between Ecopetrol’s management and the protesters to revise the working practices that sparked the latter’s anger. These resulted from the passing of a decree banning oil companies from using illegal third parties to hire oilfield workers. The two-week blockade of the field cost Ecopetrol the loss of 4.7 percent of its average daily output.

This was not the first protest of this kind: in fact, over the last few years, shut-ins and blockades have contributed significantly to Ecopetrol’s production decline. As of the first quarter of 2017, the company produced an average 712,000 bpd, with the La Cira Infantas field accounting for 22,500 bpd. It is the only Ecopetrol field where production is growing, Platts notes, by 17 percent over the first three months of this year and set for further growth as oil recovery methods improve.

Ecopetrol at the end of May took over the Recetor field, adding 4,500 bpd to daily output, after its contract with the previous operator, Equion Energia, expired. Recetor is a mature field, which started producing back in 1989 and has since yielded 83.1 million barrels of oil. Peak output was 34,000 bpd, reached in the early 2000s. Production has been declining since.

Ecopetrol’s overall production has also been declining on the back of lower oil prices and militant attacks on oil infrastructure. Last year, thanks to the combined effect of low oil prices and militant attacks, Colombia’s production fell to 885,000 bpd, from over 1 million bpd in the previous year. Investments in production growth were also down, and some wells were shuttered as they became uneconomical in the new price environment.

By Irina Slav for Oilprice.com

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