Harken Energy prepares to increase Colombian field's production

Harken Energy Corp., Houston, bought a 45-km pipeline and negotiated a new transportation agreement to move 2,000 b/d of increased oil production from Palo Blanco field in Colombia.


By the OGJ Online Staff

HOUSTON, June 26 -- Harken Energy Corp., Houston, bought a 45-km pipeline and negotiated a new transportation agreement to move 2,000 b/d of additional oil production from Palo Blanco field in Colombia.

Company officials said Tuesday they have just acquired the 45-km pipeline from that field across the Cusiana River to the Santiago pumping station. However, no other details of that purchase were provided.

In conjunction with that acquisition, Harken negotiated a new transportation agreement with the owner/operator of a pipeline that transports oil from the Santiago pumping station north to market and export points. The new contract provides for increased transportation capacity of up to 3,000 b/d.

With its recently drilled Estero No. 2 well, the company now has the production potential to utilize that capacity, officials said.

Palo Blanco field was discovered by Harken in Colombia's Llanos Basin about 4 years ago with its Estero No. 1 well. It has since produced more than 660,000 b/d, gross.

But the field's production previously was restricted by lack of transportation.

Until 1999, all production from the discovery well was transported by truck. At that time, Harken built a 4-km line to connect with the oil pipeline between Guarimena and Santiago.

While that connection allowed the company to increase production, Palo Blanco's output was still limited by contractual pipeline capacity restraints to about 1,000 b/d.

Harken recently sided a technical evaluation agreement for the El Retorno block, some 86,000 acres, adjoining Palo Blanco field.

Under terms of that agreement, Harken is to do a seismic reprocessing program on that block during the next 6 months. Once that work is completed, Harken can elect to sign a development agreement with Ecopetrol, the Colombian national oil company, for the block, officials said.

"The El Retorno area could represent a valuable enhancement to our Palo Blanco project," said Mikel D. Faulkner, Harken's chairman.

Ecopetrol recently adopted more favorable terms for association contracts that reduce royalty payments and the national company's participation, especially during the early years of production, officials said.

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