A glimmer of hope for Colombia's oil and gas sector

Despite high commodity prices and recent oil production gains from domestic fields, Colombia's hydrocarbon sector is gripped by uncertainty, according to BNamericas' 2024 oil and gas outlook. 

The report highlights plummeting exploration activity as rig numbers fall to their lowest level since the first half of 2021, when the country remained gripped by COVID-19. 

It says that private-sector exploration investments are on track to fall 33% this year, or around US$300mn.

"Industry observers cite the anti-oil policy of President Gustavo Petro, rising social tension and an unfavorable regulatory environment for the current state of affairs," the report says. 

A beacon of hope, however, has been the reactivation of offshore activity, as a string of recent discoveries bring new investments and the hope of natural gas riches, according to the outlook. 

Among the companies expected to move forward with projects off Colombia's Caribbean coast in 2024 are Ecopetrol, Petrobras, Chevron and Shell. 

But the absence of new licensing rounds – at least until the current government departs in 2026 – will have a telling impact on exploration investment, the report warns. 

"It is true that this is not the first time that Colombia has endured an extended period without offerings of new hydrocarbons acreage," it says.

"There is a sense, however, that Colombia is missing out on the chance to capitalize on an extended oil price upcycle while standing idly as peak global oil demand draws nearer and the clean energy transition accelerates."

The full report can be seen here.