Oil & Gas

30 Jan 2021

Colombia Aims to Sign 15 Oil Exploration Contracts in 2021

30 Jan 2021  by Reuters   

Colombia aims to sign 15 oil exploration contracts in 2021, Mines and Energy Minister Diego Mesa said on Wednesday, while setting the country's crude production target for the year at 865,000 barrels of oil per day.

Colombia's oil output slowed in 2020 amid declining demand, high supply and low prices during the coronavirus pandemic, which prompted temporary field shutdowns and caused the government to cut its production outlook.

Oil production from January to November in 2020 fell 11.6% to an average of 783,291 bpd, compared with the year-earlier period, when output averaged 886,180 bpd, according to the most recent available figures.

"In 2021, we're going to keep consolidating the reactivation of the hydrocarbon sector," Mesa told a virtual news conference, adding Colombia hoped for the drilling of 30 to 40 wells and 2% growth across the sector.

President Ivan Duque's administration has so far signed 35 exploration and production contracts. In 2021 - with an auction for between 30 and 40 prospective areas - the government hopes to reach 50 completed contracts.

In mining, Colombia will proceed with exploration projects for gold and copper without abandoning coal, Mesa said. The country's coal industry struggled in 2020 amid low prices, a long-running strike at the Cerrejon mine and suspended operations at other mines due to the pandemic.

The Andean country's coal output is estimated to have fallen more than 30% last year to about 54.1 million tonnes, according to the Ministry of Mines and Energy. Colombia, the world's fifth-largest coal exporter, hopes to increase production to 62 million tonnes in 2021.

"At least three gold and copper exploration areas will be promoted with a view to consolidating diversification of the mining industry," said Mesa, adding that 30 projects in the sector could generate investments of $5 billion and 7,000 jobs by 2024. 

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