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The cost of unconventional E&P is the main challenge to its growth in Colombia, but costs could drop rapidly if activity picks up, according to Sintana Energy's reservoir engineering manager Greg Schlachter.
"Shale oils have to be done at a very large scale to get the economics right," Schlachter said at a shale event in Buenos Aires. "The expectation is costs will drop in half within 2-3 years if there are enough rigs going."
Last year, Sintana entered into a farm-out agreement with ExxonMobil (NYSE: XOM) for the exploration and development of unconventional oil and gas resources in the Middle Magdalena basin at block VMM-37. The US major acquired a 70% participation interest and operatorship in the formations defined as unconventional.
"We plan to drill stratigraphic wells to assess potential, at least one well this year with Exxon," he added.