Colombia is a country with great diversity and richness in its soils, from which various energy sources are obtained. Oil has been extracted over the years to meet internal demands, as well as export demands for crude oil. Colombia has been a privileged country due to the oil industry. From the moment of its discovery in April 1918, oil has helped national development, including a large exploitation in municipalities such as Barrancabermeja, among others.
The oil potential (crude and natural gas) of Colombia is estimated at more than 37 billion barrels of oil equivalent, distributed in 18 sedimentary basins that cover an approximate 400,200 square mile area (ANH National Hydrocarbons Agency).
The Colombian oil industry has been the engine of the country’s economy in recent years, with crude oil being the first export product with 55.4 percent of total exports (AHN). Therefore, the priority of the national government with regard to hydrocarbons is the discovery of new reserves that allow the country to continue to be self-sufficient in energy consumption.
Therefore, recent years allowed the industry to achieve a more prosperous outlook, which was unfortunately affected in 2020 due to the onset of the pandemic. Today it is recovering after the price war during the pandemic.
According to the Colombian business and financial newspaper The Republic: “The prices of a Brent crude oil barrel are quoted over US $55, after having cost less than US $20 in March of last year. This panorama, in addition to favorable public finances and the possibilities of growth, opens the possibility that national production will once again be over 800,000 barrels. In this sense, it is worth analyzing how the big players in the market are positioned. ” (See Image 1.)
Image 1 (Taken from Laura Vita Mesa. [January 18, 2021]. Five companies are responsible for 85% of oil production in Colombia. The Republic.)
Unfortunately during the first quarter of 2021, oil production decreased by 14.6 percent compared to 2020 (MinMinas), due to problems with the flow of water and power cuts in some oil exploitation areas.
Despite the increase in the cost per barrel (compared to the year 2020), the International Energy Agency (IEA) predicts a decrease in extraction for this year. Although Colombia has presented a brief recovery, it is still far from pre-pandemic levels, and has not recorded levels of production this low since 2009.
Other external factors that have affected crude oil production in the country are blockages due to a national strike.
“Analysts estimate that the remaining crude oil will fall between 15 percent and 25 percent, that is, they would be between 1,530,750 and 1,730,000 barrels, which would give 5.6 to 6.3 years of reserves (Portfolio).”
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We are allies of the oil community in Colombia.
