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Ask the average investor about oil production in Latin America and they'll likely answer either Venezuela, Mexico or Brazil and its state-owned oil company, Petrobras ADR (NYSE:PBR). Yet the region has another oil producing nation that isn't even on most American investors radar. That country is Colombia, the fourth largest oil producer in the region.

Over the past five years, Colombia has had as much new crude oil production as Brazil has. Oil output in Colombia increased by nearly 450,000 barrels a day between 2007 and 2011. That compares very favorably with the 500,000 barrel a day increase in Brazilian production over the same time period. In fact, over the past three years, Brazil increased its oil production by only 150,00 barrels. These estimates come from the US Department of Energy.

The surge in Colombia oil production and exports has been important to the global oil market as a whole since it was a growing source of non-OPEC oil. And unlike most other non-OPEC countries, oil production has actually been on the rise in Colombia.

In sharp contrast to Brazil - where the government is trying to exert more control over Petrobras - Colombia's success came after the partial privatization in 2007 of the state-owned oil company, Ecopetrol S.A. ADR (NYSE:EC). The economic reforms in the country, along with increased stability and security, have sparked a renewed interest in the country's oil sector.

The most recent data, for 2010, showed a record amount of interest in colombia as far as exploratory drilling goes. The surge in exploration activity has paid off with production rising earlier this year to 1 million barrels a day. This is the highest level in decades and well ahead of Ecopetrol's target of reaching the 1 million barrel a day mark in 2015.

However, it's not all clear sailing in the years ahead for Colombia and Ecopetrol. After five years of strong oil production growth, it looks as if oil production is approaching a natural ceiling. This means Colombia oil production may grow little over the next few years - which puts the focus back on Brazil and Petrobras.

Petrobras plans to boost the country's oil production from 2.1 million barrels of oil per day in 2011 to to 3.1 million barrels a day in 2015 and to 4.9 million barrels a day in 2020. But Petrobras has been notorious over the years for setting ambitious oil production targets and then failing to meet them.

Part of the problem this time is simply the huge investment - at least $120 billion - required in ships and equipment to develop the pre-salt oil fields that lie offshore Brazil. Petrobras' plan is to have these fields make up about 40% of the country's oil production by 2020 from only 2% today.

Based on their respective track records, Ecopetrol looks like the better bet.

Source: Latin America's Real Oil Star: Colombia's Ecopetrol