Joshi Technologies: Reviving an aging Colombian oil field
Sector: Oil and gas
Challenge: Joshi Technologies of Tulsa, Oklahoma developed a technology to improve yields from aging oil fields but struggled to obtain financing to move forward with production in a remote field in Colombia.
“As a small business seeking to do business in Colombia, I knew that no bank in the U.S. would give us a loan,” said Joshi President Sadanand Joshi, who holds a PhD in mechanical engineering and has been recognized for his pioneering research that led to more advanced oil production techniques such as horizontal drilling.
Solution: In 2004 OPIC provided a $3.8 million loan to Joshi, which it used to support production at the Palagua field in a remote region of northen Colombia.
Impact: At the time that Joshi first invested in the Palagua field, it had already produced 110 million barrels of crude oil under the management of a major oil company and was considered to be near the end of its producing life.
However, by applying “slanted drilling” technology, a variation of the innovative horizontal drilling technique that Joshi helped develop, Joshi and its local partners were able to increase yields. Since committing the initial loan, OPIC has provided three additional loans to Joshi and the field has produced more than 4,000 barrels per day for the past decade – surpassing its total yield at the time Joshi first became an investor.
In addition to successfully increasing output at a field that larger oil producers considered to be past its prime, the Palagua field has delivered multiple benefits to the surrounding community and the country. By helping extend the life of an existing field, the company has increased production with far less disruption to the environment than would result from drilling a new field. Because Joshi runs its operations with natural gas produced from the Palagua field, it is also self-sustaining. The operation has also created several permanent skilled jobs in a remote region of the country with limited employment opportunities, and it employs additional workers on a seasonal basis.
“Without OPIC, this would not have been possible,” said Joshi. “We would have had to sell the project.”
This project was profiled in 2015