August 24, 2018 / 4:08 PM / a month ago

UPDATE 1-Ecopetrol to focus spending on drilling for rest of year - CEO

(Adds CEO comments, details)

By Devika Krishna Kumar

NEW YORK, Aug 24 (Reuters) - Colombia's state-run Ecopetrol SA will focus spending for the rest of the year on increased drilling activity and securing operational licenses, its chief executive said on Friday.

CEO Felipe Bayon said in an interview at the New York Stock Exchange that achieving the company's 2018 $3 billion to $3.5 billion capital plan will be challenging because of spending delays earlier this year. Officials were in New York to recognize the 10th anniversary of the company's NYSE listing.

"It's a challenge" to hit spending targets, Bayon said, adding the company is planning to have 41 working rigs at year end, up from 33 at the end of June. Acquiring drilling rights consumes "a lot of the capex we invest," he said.

Capital expenditures will be below the company's initial target of up to $4 billion because of protests that closed three fields in the first quarter.

The company also aims to boost reserves through exploration, squeezing more oil from existing wells, drilling in unconventional basins and through acquisitions, he said.

Ecopetrol is looking for deals in areas where it already has operations, including Mexico, Brazil, Peru and the United States, he said. Colombia's reserves are estimated to be about 2 billion barrels.

Investors look at reserves as a gauge for the long-term sustainability of oil and gas firms. "We have a very healthy cash position with 15.8 trillion pesos (US$5.3 billion) at the end of the quarter," Bayon said. "That gives us flexibility if we wanted to invest."

Crude oil production in Colombia reached an average of 860,401 barrels per day (bpd) in July, the Mines and Energy Ministry said this week, up 0.5 percent from the same month a year ago.

Natural gas production for June was 951.8 million cubic feet per day, the statement said, up 8.6 percent year-on-year. (Reporting by Devika Krishna Kumar in New York Editing by Marguerita Choy and Susan Thomas)

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