Lack of investment is putting Colombia’s oil industry at risk of loosing its crude self-sufficiency, forcing the country to become an importer, Kallanish Energy learns from the Colombian Petroleum Association (ACP).
ACP’s president, Francisco José Mera, said last week crude output could drop to below 400,000 barrels per day (BPD) by 2022, from roughly 900,000 BPD currently, if investment in the industry aren’t resumed shortly.
The estimated 15% annual output decline would lead the country to import crude to feed its Cartagena and Barrancabermeja refineries, in six years time.
Mera estimates the only way to stop the imminent production decline is with annual investments of $7 billion in the next 10 years. This year, Colombia would have seen some $620 million invested in exploration and $3.2 billion in production, but the official doubts this will happen.
Colombia’s proven reserves dropped 13%, while the volume for probable reserves increased 37%, according to national data.
“The fall in reserves is serious. Last year, 87 million barrels were added to proven reserves, but more than 300 million barrels were produced,” said Mera, adding Colombia needs to increase its deposits by 1.3 billion barrels to ensure normal extraction operations.
He said the country “doesn’t have the luxury to sit and wait for oil prices to recover.” On the contrary, it should tackle regulatory delays in offshore and shale projects, and create competitive conditions to attract investors, to boost not only the sector, but the country’s finances.
