The Future of the Oil Industry in Colombia

The move towards cleaner energy in Colombia is discussed, with assurances from Ecopetrol CEO Ricardo Roa that this does not mean the end of the oil industry.

Share:

industrie en colombie

The Future of the Oil Industry in Colombia looks at the transition to cleaner energy and its impact on the country’s oil and gas industry. Ecopetrol CEO Ricardo Roa reassures us that this transition will not mean the end of theoil industry in Colombia.

Gustavo Petro’s Vision of the Presidency

The government of President Gustavo Petro, Colombia’s first leftist leader, aims to reduce the country’s dependence on hydrocarbons, mainly oil and coal, which are major drivers of the economy, in favor of renewable energies. Last December, Ecopetrol announced its intention to invest between 25.3 trillion and 29.8 trillion pesos (or between 6 billion and 7.1 billion dollars), focusing on the transition to renewable energies and ensuring energy self-sufficiency.

Reassurance about the future of the oil industry

“We never said we were going to end our traditional business in the oil and gas sector,” Roa told an industry forum in Cartagena, organized by the Colombian Petroleum Association (ACP).

Concerns of the Workers’ Union

The oil workers’ union, USO, said in a statement posted on social networks on Monday that Ecopetrol plans to cut its investment in exploration and production by more than 40%, from $4.5 billion this year to $2.5 billion in 2024, threatening the company’s future.

Investment scenarios

In response to the USO press release, Roa indicated that Ecopetrol is considering two investment scenarios for next year, a basic scenario and a more ambitious one. The baseline scenario calls for an investment of $3.5 billion to reach an average production of 720,000 barrels per day next year, said Roa. The high-investment scenario, on the other hand, would require $4.2 billion to approach 731,000 barrels per day.

Ecopetrol’s production targets

Ecopetrol hopes that production will reach a rate of 731,000 barrels per day by the end of this year, he added. A presentation provided by the company suggests average production of between 720,000 and 725,000 barrels per day. Last year, Ecopetrol produced an average of 709,500 barrels per day, according to a report published in February.

The Role of Fossils in the Energy Transition

“The oil and gas industry in the country is not going to disappear,” Roa asserted, pointing out that funds from fossil fuels will be essential to finance the transition to renewable energies.

It’s clear that Colombia faces major challenges in its energy transition, but that doesn’t mean the end of the oil industry. Ecopetrol’s investments in renewable energies demonstrate its commitment to a more sustainable future. However, it is also crucial to maintain stable oil and gas activity to support the transition. Prudence and strategic planning are essential to balance these objectives.

Ultimately, the future of Colombia’s oil industry will depend on its ability to adapt to the energy transition while preserving its assets and guaranteeing the country’s energy security. The decisions taken by Ecopetrol will have a significant impact on the sector and on the Colombian economy as a whole. The debate between reducing investment and preserving the oil industry has only just begun.

Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.
Swiss commodities trader Glencore has initiated discussions with the British government regarding its supply contract with the Lindsey refinery, placed under insolvency this week, threatening hundreds of jobs and the UK's energy security.
Facing an under-equipped downstream sector, Mauritania partners with Sonatrach to create a joint venture aiming to structure petroleum products distribution and reduce import dependency, without yet disclosing specific investments.
Oil companies may reduce their exploration and production budgets in 2025, driven by geopolitical tensions and financial caution, according to a new report by U.S. banking group JP Morgan.
Commercial oil inventories in the United States rose unexpectedly last week, mainly driven by a sharp decline in exports and a significant increase in imports, according to the US Energy Information Administration.
TotalEnergies acquires a 25% stake in Block 53 offshore Suriname, joining APA and Petronas after an agreement with Moeve, thereby consolidating its expansion strategy in the region.
British company Prax Group has filed for insolvency, putting hundreds of jobs at its Lindsey oil site at risk, according to Sky News.
Orlen announces the definitive halt of its Russian oil purchases for the Czech Republic, marking the end of deliveries by Rosneft following the contract expiry, amid evolving logistics and diversification of regional supply sources.
Equinor and Shell launch Adura, a new joint venture consolidating their main offshore assets in the United Kingdom, aiming to secure energy supply with an expected production of over 140,000 barrels of oil equivalent per day.
Equinor announces a new oil discovery estimated at between 9 and 15 mn barrels at the Johan Castberg field in the Barents Sea, strengthening the reserve potential in Norway's northern region.
Sierra Leone relaunches an ambitious offshore exploration campaign, using a 3D seismic survey to evaluate up to 60 potential oil blocks before opening a new licensing round as early as next October.
Faced with recurrent shortages, Zambia is reorganising its fuel supply chain, notably issuing licences for operating new tanker trucks and service stations to enhance national energy security and reduce external dependence.
The closure of the Grangemouth refinery has triggered a record increase in UK oil inventories, highlighting growing dependence on imports and an expanding deficit in domestic refining capacity.