The new pipeline acquisition mentioned below is VERY SIGNIFICANT for PMG. It not only lowers transportation costs but it will give them direct access to the higher oil prices in the Gulf Coast market. - Dan
BOGOTA, July 28 (Reuters) - Canada's Petrominerales Ltd (PMG.TO) expects 2011 spending investment in Colombia to rise around 20 percent to roughly $600 million, mainly going into crude exploration activities, the company said on Thursday.
The company is one of many Canadian explorers and producers that are snapping up assets in Latin America's No. 4 oil producer and helping to drive crude oil production increases to historic highs in Colombia.
"The vast majority of our spending is on exploration," Corey Ruttan, president and CEO of the company, told journalists in the Colombian capital.
Ruttan said that Petrominerales has a production goal of around 45,000 barrels per day (bpd) for the end of 2011, up from a little over 40,000 bpd currently.
The company received approval this month to list on the Colombian bourse and expects shares to start trading on the BVC next Wednesday under the symbol 'PMGC'.
Colombia has seen a boom in oil and mining investment since a 2002 U.S.-backed crackdown against leftist guerrillas opened up much of the country, but it is struggling to match output growth in oil and mining products with infrastructure.
Petrominerales has grappled with transportation problems that have been a drag on its profit and have at times offset some of the output rise.
In June, Petrominerales said it would acquire a 5 percent stake in Colombia's Ocensa oil pipeline for $281 million, mitigating its transportation worries and helping the company export oil out of the country at a lower cost.
"The vast majority of our oil to date, we've tended to sell to either Ecopetrol or other heavy oil producers," Ruttan said of the light/medium oil that the firm produces.
"With the pipeline investments that we've made and are considering to make, increasingly we'll begin to export the crude ourselves to international markets," he said