BMI's Executive Summary

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The latest Colombia Oil & Gas Report from BMI forecasts that the country will account for 3.72% of Latin America regional oil demand by 2011, while providing 2.36% of supply. Latin America regional oil demand rose to an estimated 6.87mn barrels per day (b/d) last year. It should average 7.01mn b/d in 2007 and then rise to around 7.82mn b/d by 2011. Regional oil production was last year estimated at 10.97mn b/d. It is set to rise to 11.85mn b/d by 2011.

In terms of natural gas, the region last year consumed an estimated 183bn cubic metres (bcm), with demand of 271bcm targeted for 2011, representing 48% growth. Production of an estimated 191bcm in 2006 should reach 272bcm in 2011, and implies just 2bcm of net exports the end of the period. Colombia's share of gas consumption in 2006 was an estimated 3.28%, while its share of production was 3.14%. By 2011, its share of gas consumption is forecast to be 3.32%, with the country accounting for 3.31% of supply.

For the whole of last year, our estimates of average crude oil prices are US$61.10 for the OPEC basket, US$65.10 for Brent, US$66.20/bbl for WTI and US$61.30 for Urals. For the first quarter of this year, we have adjusted our forecasts to reflect the weather-induced volatility. The OPEC basket is now expected to have averaged US$54.30/bbl, with Brent at US$57.60; WTI averaging US$58.70 and Urals at US$54.00/bbl. Our projections for 2007 as a whole are barely changed from the last quarterly report. We are still assuming an OPEC basket price average of US$55 per barrel. Based on last year's typical price differentials, this implies Brent at US$58.80, WTI averaging US$59.90/bbl, and Urals at US$55.30/bbl.

Colombian real GDP growth is now forecast by BMI at 5.2% for 2007, down from an estimated 6.2% in 2006. We are assuming 4.4% growth in 2008, 4.0% in 2009, followed by 3.8% in 2010 and 3.6% in 2011. The government is working hard to encourage international oil company (IOC) investment and stem the decline in domestic oil production, aided by state-owned Ecopetrol. We are assuming oil and gas liquids production of no more than 280,000b/d by 2011, with the country expected to pump 480,000b/d this year.

Consumption is forecast to increase by around 4% per annum to 2011, implying demand of 291,000b/d by the end of the forecast period. The country's export capability will therefore evaporate around the end of the decade, and Colombia will require imports of 11,000b/d by 2011. Gas production is forecast to increase from an estimated 6.4bcm last year to 9.0bcm over the period, met by rising domestic production.

In the BMI Business Environment Ranking matrix, Colombia receives a slightly higher composite score of 29 that now ranks the country outright fifth out of nine states included in the Latin America region. The overall business environment can be considered neutral in a regional context, thanks largely to a high level of perceived economic and political risk, offset by the country's effective licensing regime and mature competitive landscape. Reserves have been depleted, resulting in a low reserves-to-production ratio (RPR), while short- to medium-term volume growth prospects are modest, in spite of fresh government investment incentives.

Contents

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Chapter 1 - Executive Brief

Chapter 2 - SWOT Analysis

Colombia Political SWOT

Colombia Economic SWOT

Colombia Business Environment SWOT

Chapter 3 - Regional Market Overview

Latin America Region

Table: Latin America Oil Consumption (000b/d)

Table: Latin America Oil Production (000b/d)

Table: Latin America Oil Refining Capacity (000b/d)

Table: Latin America Gas Consumption (bcm)

Table: Latin America Gas Production (bcm)

Table: Latin America LNG Exports/(Imports) (bcm)

Colombia

Chapter 4 - Business Environment Rankings

Colombia

Latin America Region

Chapter 5 - Colombia Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Foreign Direct Investment

Tax Regime

Chapter 7 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Latin America

Table: Oil Production (000b/d) – Latin America

Table: Oil Consumption (000b/d) – Latin America

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

Refining and Oil Products Trade

Revenues/Import Costs

Table: Colombia Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Colombia Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 11 - Economic Outlook

Table: Economic Activity – Historical Data And Forecasts

Chapter 12 - Country Snapshot: Colombia Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 13 - Regional Case Study

Investment Needed To Fulfil Venezuelan Potential

Strategic Vision

Export Commitments

Regional Position

Chapter 14 - Competitive Landscape

Table: Key Players – Colombian Oil & Gas Sector

Overview/State Role

Table: Key Upstream Players

BP – Summary

Total – Summary

Occidental – Summary

RepsolYPF – Summary

Table: Key Downstream Players

Chevron – Summary

ExxonMobil – Summary

Petrobras – Summary

Others – Summary

Chapter 15 - Company Monitor

Empresa Colombiana de Petróleos (Ecopetrol)

BP Colombia

Company Analysis

SWOT Analysis

ExxonMobil Colombia

Company Analysis

SWOT Analysis

Chevron Colombia

Company Analysis

SWOT Analysis

Occidental de Colombia

Company Analysis

SWOT Analysis

Petrobras Colombia

Company Analysis

SWOT Analysis

TEPMA Colombia (Total)

Company Analysis

SWOT Analysis

Chapter 16 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Energy Industry

Cross checks

Sources

Chapter 17 - Appendix: Regional Demographic Data

Wages (ave per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Latin American Oil & Gas Sources

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BMI's Latin American Oil & Gas Reports are based on an extensive network of multilateral organisations, government departments, oil & gas industry associations, chambers of commerce and company reports. Information sources include: