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Offshore uptick masks Colombia's oil and gas woes
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Colombia's oil and gas rig count is expected to edge higher over the next three months as new offshore projects offset stagnant onshore activity.
But the sector is grappling with wider issues that threaten the country's near-term energy security.
The good news first.
In its latest monthly report, industry chamber Campetrol identified 109 active rigs in the country in May, down from 110 in April.
The figure is on track to remain stable in June before reaching 110 in both July and August.
"This increase reflects slight growth in deployment of drilling equipment... while workover rigs will consolidate during the next three months," said Campetrol, which represents 140 oil equipment and service companies.
It added that a highlight was the start of drilling activity at the Tayrona block's Uchuva 2 deepwater well, a joint venture between Colombian state-run oil company Ecopetrol and Brazilian counterpart Petrobras.
The companies have indicated that they will also spud the nearby Buena Suerte well in the coming weeks.
Elsewhere in Colombia's Caribbean waters, Ecopetrol and Occidental Petroleum are expected to begin drilling the Komodo prospect in their jointly held Col-1 block later this year.
In addition, Ecopetrol and partner Shell are advancing plans to develop gas discoveries in the Col-5, Fuerte Sur and Purple Angel offshore blocks.
"These actions demonstrate a strategic approach towards development in the maritime area of the Colombian Caribbean, which has considerable exploratory potential," Campetrol said.
Despite the offshore developments, Colombia's oil and gas industry is grappling with falling overall investment and dwindling reserves amid a dearth of major discoveries.
According to new central bank data, foreign direct investment in the sector totaled US$575mn in the first quarter, down 28% year-on-year.
The share of oil and gas in Colombia's FDI pie fell four percentage points to 16% over the same period.
But diminishing capital inflow only tells part of the story.
In May, Colombian hydrocarbons agency ANH said the country's proven oil reserves stood at 2.019Bb (billion barrels), down from 2.074Bb a year earlier. The figure for natural gas, meanwhile, dipped to 2.37Tf3 (trillion cubic feet) from 2.82Tf3.
The volumes reflect self-sufficiency of 7.1 years for oil and 6.1 years for gas, down from 7.5 and 7.2 years, respectively, a year earlier.
Such a scenario has prompted officials to warn of a looming natural gas shortage.
According to Ecopetrol CEO Ricardo Roa, the country faces a gas deficit of 83BBTU/d (billion British thermal units) in 2025.
Industry observers blame the existing panorama on government policies designed to wean Colombia off fossil fuels, including a decision to stop issuing new exploration licenses and higher taxes on producers.
President Gustavo Petro, meanwhile, has publicly implored Ecopetrol to ditch its traditional business model to focus on clean energy.
These are troubling times for Colombia's hydrocarbons sector. And with more than two years remaining in Petro's presidential term, the struggle is far from over.
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News in: Oil & Gas (Colombia)
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Offshore uptick masks Colombia's oil and gas woes
Despite promising offshore developments, Colombia's oil and gas industry is facing major challenges.
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