MEDELLIN, Colombia (ICIS)--Reviving a shelved expansion project at Colombia’s largest oil refinery depends on the nation’s readiness to tap into its unconventional hydrocarbon reserves, a spokesperson at the state-controlled energy producer Ecopetrol confirmed on Monday.
The $3bn project at the Barrancabermeja refinery, designed to boost crude processing capacity from 250,000 bbl/day to 300,000 bbl/day, was postponed indefinitely last year amid the low oil price environment.
The revamp was 18% complete at the time of the suspension.
According to Ecopetrol CEO Juan Carlos Echeverry, the development of the country’s unconventional oil reserves, estimated to be as high as 7bn barrels, would provide the incentive to rekindle the project.
Amid environmental concerns, hydraulic fracturing (fracking) to extract unconventional hydrocarbons has yet to be used in Colombia.
“If with unconventional resources we can supply the refinery for the next 30 or 40 years, and light oil exists for feedstock, it makes sense to carry out the project. Without this oil, it doesn’t make sense,” Echeverry told news site El Espectador.
A company spokesman confirmed the CEO’s comments.
According to Colombia’s mines and energy ministry, the country’s conventional oil reserves last year fell by 17% to 1.66bn barrels, equivalent to just 5.1 years of output. Authorities have warned that from 2021 domestic crude oil production will be insufficient to meet refinery demand.
Barrancabermeja, in central Santander department, is one of two major refineries owned by Ecopetrol.
The refinery produces 70% of the petrochemicals circulating in the domestic market.