(Oil Price) – Crude oil and natural gas investments in Colombia could rise to $4.68 billion this year, from $4.33 billion in 2024, the country’s oil and gas industry association said, adding that this will not lead to higher production.
“Today more investment is required to produce the same amount of oil, due to the natural depletion of the fields and the complexity of the operating environment,” the president of the Colombian Oil and Gas Association said, as quoted by Reuters.
Of this total, the bulk, or $3.94 billion, would be spent on production, with the remainder of $740 million channeled into exploration.
“For gas, we are not managing to either increase production or replenish reserves, which is double the challenge when it comes to energy self-sufficiency,” Frank Pearl added.
Colombia has been struggling to reverse a decline in its oil production over the past five years and now has an ambition to boost its daily average to over 1 million barrels, from around 800,000 barrels in 2024.
State oil company Ecopetrol is contributing to the output increase through enhanced oil recovery techniques, improving extraction volumes from reservoirs. Colombia’s 2024 oil recovery rate averaged 27 percent, energy minister Andres Camacho said last May. Guerilla attacks on pipelines also remain a chronic problem for the country’s oil and gas industry.
At the same time, the current government has ambitious plans for wind and solar growth as it seeks to reduce Colombia’s dependence on oil, gas, and coal revenues. Hydrocarbons, however, remain a major contributor to budget revenues and the most likely source of transition money, given the price tag of the government’s green plan is $40 billion. Gustavo Petro’s government has suspended the issuance of new oil and gas licenses in line with its transition plans, making any production boost a lot more challenging.
By Irina Slav for Oilprice.com
