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Despite its significant potential, Colombia’s oil and fuel industry has experienced ups and downs due to political turmoil, various foreign interests, and other determining factors. With a more stable political outlook for the coming years, Colombia hopes to get its oil production back on track. However, it is not yet clear whether the South American country will achieve this goal. In addition, socialist President Gustavo Petro aims to decarbonize the country’s economy while embarking on a green transition, making the outlook less transparent.
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Despite the apparent challenges, Colombia has revitalized its offshore activities, supported by several discoveries that generate new investment. Ecopetrol, Petrobras, Chevron and Shell will continue operations in Colombia in 2024. However, there have been no new tenders and no Petro is expected, while sticking to green transition projects, even at the cost of new oil revenues.
In February 2024, state-owned Ecopetrol announced the discovery of two accumulations of vegetable fuel in its Orca Norte-1 offshore well. A representative from Ecopetrol said of the discovery: “Orca Norte-1 is the first deepwater well operated one hundred percent through Ecopetrol. . . . with one of the most productive operational functionalities of [drilled] wells in the Colombian Caribbean [Sea]. “The corporation added: “Important data has also been received about the subsurface both for the delineation objective and in the new periods of exploratory interest discovered. This is one of many recent fuel discoveries off the northern coast of Colombia.
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While recent discoveries give cause for optimism, Colombia could face fuel shortages in the second half of this decade as its natural fuel production declines as national onshore fields mature. Currently, Colombia’s average fuel demand is approximately 960 million cubic feet per day. (MMcfd), a figure that has remained strong for the past six years. This figure falls below its production rate of 1,050 MMcfd. However, as demand for increases and the country’s fuel reserves are depleted, Colombia risks becoming dependent on fuel imports to meet its needs. your needs.
Related: How to take advantage of Europe’s $800 billion energy crisis
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Meanwhile, Ecopetrol is suffering as it reported a net profit in the fourth quarter of 2023 of just over $1,070 million, down 38% from the previous year. This is largely due to the drop in the value of crude oil, which is consistently down $17. with barrel. However, Ecopetrol plans to invest up to $6. 8 billion in 2024 “at the historic execution levels we achieved in 2023, with a focus on the energy transition,” according to the company’s CEO, Ricardo Roa. Ecopetrol recorded its highest production in eight years in 2023, with an average production of 737,000 barrels of oil equivalent per day, up 3. 8% from 2022. This luck was due in large part to the good production rates of its interest in the Permian Basin of the United States. The company’s refineries also achieved their highest processing rate to date at 420,000 bbls/d.
Ecopetrol’s reserves amounted to about 1. 88 billion barrels in 2023, up from 2. 07 billion barrels at the end of 2022, equivalent to about 7. 6 years of production remaining. The company’s reserves stand at 89% in Colombia and 11% in the United States. The limited useful life of its existing reserves demonstrates a desire to invest in exploration activities if the company expects to continue generating oil and gas in the coming decades, which it is likely to do. Even if Ecopetrol invests in alternative energy operations, it is unlikely that Colombia will need to upgrade fossil fuels with renewed options at the desired pace to meet demand, even if positive steps are taken toward a green transition across the country.
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By Felicity Bradstock for Oilprice. com
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