What role has new technology played in increased oil production?
FERNANDO I. SANABRIA The use of new 3D seismic technology has enabled more efficient evaluations of the subsurface, and led to the identification and production of new fields in Colombia in recent years. This and the application of technologies such as horizontal drilling and multistage hydraulic stimulation should enhance production in the country, particularly in unconventional oil and gas. On the other hand, ExxonMobil's reputation as the industry leader is supported by the fact that we develop proprietary technology to explore and produce oil and gas resources around the world. We believe that we can bring value to Colombia, and help the government achieve production goals.
How would you assess the investor climate in the oil and gas sector in the country?
CAMILO F. DURÁN MARTÍNEZ These are interesting times in terms of FDI and the arrival of new investors. The country decided to change the investment conditions governing the sector a few years ago, and that attracted a lot of interest from large players in the sector. Today, Colombia has a very accessible government, a good reputation for respecting contracts, and serious financial institutions. It is very open to business and that makes it stand out in the region. In addition, the old picture of Colombia that everyone had, especially investors, has also changed for the better. Colombia has gone from almost being a failed country back in the late 1990s to a place where everyone wants to be, and members of its political elite are well educated and very competitive professionals that know where they want to take the country. Such parameters do not only apply to the oil and gas sector, but to all sectors.
Where do you see ExxonMobil in the next 10 years?
FS We believe that Colombia has attractive opportunities for investment in the upstream sector. At ExxonMobil, we are particularly looking forward to continue growing in the upstream business by developing long-term partnerships to advance the country's overall energy needs. We are very pleased with the results in the past Colombia 2012 Tender Round, where ExxonMobil and Ecopetrol were the highest bidders for three blocks, namely COR 46, COR 62, and VMM29, which were awarded on November 21 by the Agencia Nacional de Hidrocarburos (ANH). Jointly with Ecopetrol, we look forward to our future exploration efforts and participation in the development of Colombia's natural resources. Additionally, ExxonMobil has participation in the CPE-3 block in Vichada, and we are in the process of obtaining ANH assignment approval in order to formalize our participation in the VMM2 and VMM37 blocks in the Middle Mag.
CDM The business is getting very competitive, and there are plenty of opportunities for growth. In Colombia an average of 350,000 new cars are sold a year, whereas in Argentina this number is above 800,000. This shows you the opportunities the country offers in the downstream segment. However, we need the infrastructure to make these things happen, and I believe it is just a matter of time. At the same time, Ecopetrol is currently upgrading its two refineries, and that would enable the market to grow further. We see a lot of activity also in the upstream sector, for we have seen a lot of interest in developing the potential Colombia has in this area. There are tremendous opportunities, and my only concern is whether the government understands that since this is a long-term business, it needs to maintain stable rules and put up the required resources to be able to manage the expected levels of investment that are coming in. In this regard, ExxonMobil is ready to further grow its participation in the sector, because we have been here for many years now, both in good times and bad, and we are highly committed to the development of the sector and the country.
What is your outlook for Colombia's economy and the energy sector in the medium term?
FS Ecopetrol has played an important role in the Colombian energy sector due to its expansion of E&P activity in the country. We believe that Ecopetrol will continue to be a key player in the years ahead. We also expect that investments in the oil and gas sector will continue to grow as ANH promotes exploration in the country through public bid rounds. As in any business, we do face challenges. Efficient permitting processes and infrastructure are key to developing our projects in a cost-effective and timely manner. We believe that the industry and government need to work closely together to ensure that the benefits of current and future activities are fully realized, by having more efficient permitting processes.
How would you rate Colombia's workforce in the sector?
CDM Colombian executives are very well educated at the international level, and they are fluent in English and other languages. Education is seen as the most important investment for Colombian families, and at the moment there is an influx of young Colombians moving back to the country after having studied abroad. However, despite the labor market being pretty hot right now, we have a shortage of petroleum engineers, for we lack the tradition and the institutions to teach in that area. Colombia needs that local expertise in the field if it wants to further develop in this area. Venezuelans educated in the petroleum industry that have migrated to Colombia are helping us to fill the gaps.