It is easy for any country beyond Venezuela and Brazil to get lost in the South American oil shuffle. Venezuela not only has the perceived advantage of being an OPEC member, it is also the continent's largest oil producer and fall of Hugo Chavez's anti-U.S. rhetoric, the U.S. is still a reliable buyer of Venezuelan crude.
Likewise, the Brazilian oil story is well-documented at this point. The country's pre-salt reserves, by some estimates, may hold 50 billion barrels or more. While the news of vast pre-salt reserves has not done much to help shares of Petrobras (PBR), Brazil's state-run oil producer lately, those reserves do ensure Brazil will be a major player on the global oil stage for years to come.
Along those lines, there are only five countries in the world where oil production is currently rising. Brazil is one. The other is found on the same continent: Colombia. As we frequently note when covering news events involving Ecopetrol (EC), Colombia's state-controlled oil company, Colombia is South America's third-largest oil producer.
Yet even with that alluring anecdote, Colombia's rise in the oil patch has a way of going unnoticed. That is odd when considering the country pumped 930,500 barrels per day last month. A few years ago, Colombia was not even averaging 600,000 barrels per day. The target is 1.5 million barrels per day by 2014.
Also forgotten is that talk of the oil-rich Orinoco region cannot exclude Colombia. Neighboring Venezuela is banking on Orinoco to increase production, but not all of Orinoco's estimated 220 billion barrels lie in Venezuela, many lie in Colombia, as the AFP reports. Oil & Gas Journal notes Colombia has 1.9 billion barrels of proven reserves, a number that many analysts expect to grow in the coming years. In the past decade, Colombia's proven reserves have jumped 22% while production has surged 45%.
Things are not all roses for Colombia's oil industry, namely because of Nigeria-esque rebel violence that results in kidnappings and attacks on oil assets, the same stuff that has prompted some oil majors to reconsider investments in Nigeria. Then again, where there is oil, at least a few of the major players usually find their way there and Colombia's violent past actually works to the advantage of foreign oil companies looking to do business there.
In an effort to spur foreign investment in its energy and mining industries, Colombia offers a host of tax incentives and long-term contracts that can often span up to 20 years or more, providing foreign companies with the sweeteners and security they need to view Colombia as a legitimate investment destination. No, Colombia is not perfect, but it probably deserves a bit more ''street cred'' in the oil world. It is just a matter of time before the country earns it.