With all the worry about oil production in the Mideast and North Africa, the energy-hungry U.S. is increasingly turning to an old ally -- Colombia.
Statistics released here at an energy conference revealed that Colombia's average oil production last month reached 884,000 barrels a day, a gain of 100,000 since August. According to a Barclay's Capital survey, the country led the developing world in terms of percentage increase in production in 2010 from the previous year -- up 12%.
Colombia, which depends on Gulf Coast refiners to buy and refine most of its heavy, sulfur-laden crude, now ranks 10th among the exporters of oil to the U.S. It shipped an average of 365,000 barrels a day stateside last year.
That's a tiny fraction of the 11.7 million barrels the U.S. imported on a typical day last year, but significant in that Colombian exports to the States are sharply rising -- up 32% from the 276,000 barrels exported daily in 2009. Meanwhile, oil shipments to the U.S by some other countries, such as Venezuela and Mexico, have been declining.
Colombia has seen an influx of foreign wildcatters in recent years drawn by attractive terms, a reliable judicial system and perhaps most important, improved security. The eastern jungle plains region of Llanos, which a few years ago was firmly in the grips of leftist guerrillas, is now the scene of most of Colombia's oil growth.
Foreign investment in Colombia -- a country now seen as especially friendly to outside investors -- last year was around $4 billion, up from less than $3 billion in 2009.
At an oil conference this week in the Spanish colonial city of Cartagena on the northern coast of the country, the dominant theme was how Colombia has been almost too successful at reviving its once-moribund energy industry. Rising production has caused bottlenecks in a pipeline system called upon to handle ever-increasing volumes of crude.
"We have not been able to keep up with expansions of our transport network," said Alvaro Castaneda, vice president of Ecopetrol, a former state monopoly oil company that's now privatized.
Ecopetrol, which is still by far the largest and most influential of the oil companies in the country, is studying the feasibility of a multibillion-dollar pipeline that would go from eastern Colombia to an undetermined port city on the Pacific Ocean.
The proposal comes on top of half a dozen other pipeline projects in progress that will cost $7 billion and double Colombia's pipeline capacity to 1.4 million barrels a day by 2014.
All these projects might be needed to meet production forecasts.
On Tuesday, Armando Zamora, director of the government's National Hydrocarbons Agency, reiterated industry predictions that crude production could exceed 1.2 million barrels a day by 2014.
Another project on the drawing board is a proposal for an $860-million oil depot that would accommodate supertankers capable of taking loads of 1.5 million barrels at a stop.
An excess of oil is a problem many countries would like to have, and it's a major turnaround for Colombia, which just six years ago was a place most wildcatters avoided. Back then, the big oil finds of the 1980s and 1990s by BP and Los Angeles-based Occidental Petroleum were rapidly dissipating and the country expected it would lose even its oil self-sufficiency.
But the situation in the oil fields has vastly changed. The Plan Colombia anti-drug and anti-rebel program -- boosted by billions of dollars in aid from the U.S. -- enabled the Colombian military to take control of most of the territory.
Attacks by leftist guerrillas on high-voltage power pylons have come down to about 30 a year compared with about 500 a year in the early 1990s, Mining and Energy Minister Carlos Rodado said at the conference. Attacks on pipelines, he said, have declined to "a couple of dozen per year," from 270 in 2001.
One worry for the U.S. is that Colombia might want to diversify its export customer base. A driving factor of the Pacific pipeline project is better access to oil markets in China and elsewhere in Asia.
"We shouldn't put all our eggs in one basket," Ecopetrol's Castaneda said.