Sunday, May 28, 2023

Colombia: 41bn barrels of oil by 2030?

Full-steam ahead, that’s how Colombia’s government is determined to set their “energy locomotive”, as they call their ambitious energy plans.

The Andean country is already the fourth-biggest oil exporter in the region, having almost doubled its production since 2006 to 956,312 barrels of oil a day.

With production humming along, the country’s energy minister Federico Renjifo, said he is now switching his focus on strengthening reserves.

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“What keeps me up at night is more the reserves than arriving at one million barrels,” he said, announcing a potential a twenty-fold increase in oil reserves over the next eighteen years.

According to Renjifo, the energy planning department has a study that shows different scenarios from now until 2030 about the incorporation of oil and gas reserves. “in a scarce scenario we’d have 7.7bn barrels in 2030 and in one of abundance, 41bn barrels,” he said.

The current proven reserves of 2.3bn barrels already looks good many. So even the scarce scenario would be a fillip to Colombia’s oil industry.

After years of decline in production and exploration during the 1990s, in the past decade, Colombia has taken advantage of the commodities boom and a crackdown that has put insurgents on a retreat, something that sparked the interest of investors in the energy-rich parts of the country that were almost inaccessible during the heydays of the drug-fuelled, guerrilla and paramilitary violence.

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This coincided with the partial privatisation of Ecopetrol in 2007, the state-run oil giant that has managed to restructure its contracts and encourage the private sector to invest. Since then Colombia witnessed over 130 oil and gas discoveries, according to analysts.

After an increase in raids on the country’s energy infrastructure earlier this year, Colombian officials now say the frequency of the attacks declined after representatives of the FARC guerrillas and the government agreed in August to meet in Oslo on October 17th for peace talks to try and end Latin America’s longest-running armed conflict.

Colombian officials expect around $17bn in foreign investment this year, with a good chunk of going into energy projects. Some of the world’s largest oil companies – including ExxonMobil, Royal Dutch Shell and ConocoPhillips – are currently elbowing for licences to explore for oil and shale gas in Colombia.

The deadline for offers in Colombia’s licensing round is next week. Of the 115 blocks up for grabs, 31 of them appear to contain unconventional resources, and the government has offered incentives to investors in those areas, such as a 40 per cent discount on royalty rates.

“This is an inexact science,” a well-placed source at Ecopetrol told beyondbrics. “But the potential is there, Colombia is still quite unexplored in geological terms.”

Source: Financial Times

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