Oil & Gas

16 May 2024

Colombia Oil Output Closing in on 800,000 Bpd, Regulator Head Says

16 May 2024  by reuters   
Colombia's average daily oil output is closing in on 800,000 barrels per day (bpd) even as the Andean country increasingly looks to boost renewable energies, the president of the National Hydrocarbons Association (ANH) regulator said.

The government of leftist President Gustavo Petro has said it wants to wean Colombia off of its dependence on oil and coal in favor of solar, wind, and geothermal energy, though many renewable energy projects are facing significant hurdles.

The boost to Colombia's oil output from 777,000 bpd last year comes from better management of existing oil and gas contracts, ANH President Orlando Velandia said late on Tuesday.

"Our goal this year is to very quickly reach close to 800,000 bpd," Velandia said, adding the figure could nearly be reached in May.

Environmental licensing delays and the country's long-running conflict have led to the suspension of some 30 hydrocarbon contracts, Velandia said.

"In the last three months we've managed to mitigate problems that would have generated at least 10 additional suspensions," he said.

Petro's government has not held any new oil and gas licensing rounds.

Signing more contracts is no guarantee of increasing resources, Velandia said, adding sometimes investments never appear.

"Why don't the investments materialize? Because, unfortunately, we have found some cases of speculation with these contracts," he said.

The ANH will examine existing contracts to clamp down on companies which are not fulfilling agreements, Velandia said.

"We're going contract by contract to see where there really are good reasons to suspend these activities and where there aren't, to declare possible non-compliance due to negligence," he said.

Industry critics have said no new licensing might affect energy self-sufficiency, but Velandia pointed to oil and gas reserves of about five to eight years. Statistics for reserves as of the end of 2023 will be released this week, he added.

Colombia is set to hold its first-ever offshore wind auction, which majority state-owned energy company Ecopetrol (ECO.CN), opens new tab could join.

At least five companies have shown interest in bidding, Velandia said, while others have approached the regulator to request information.

"A significant number of companies have shown their interest since the opening of the process and that makes us very optimistic," Velandia said.


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