The strength of Colombia’s oil production recovery hangs in the balance
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The Colombian oil industry had many ups and downs in 2020, with the Ministry of Mines and Energy reporting that production fell by 11.6 percent in the first 11 months of the year versus the same period in 2019. The energy industry comprises approximately four percent of Colombia’s GDP, and the country’s reliance on this sector made it especially vulnerable to the unforeseen headwinds of 2020.
Vice-Minister of Energy Miguel Lotero has set his sights on returning the country to 2019’s oil production levels when it was producing 886,000 barrels per day (bpd) in 2021. In order for his prediction to come true, however, the stars will need to align, which according to some experts is a long shot.
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Colombia is not a country usually associated with crude oil. Low proven petroleum reserves and falling production see Colombia rank well behind many of the global oil heavyweights, yet petroleum has emerged as a crucial economic driver and is responsible for a significant portion of export earnings and fiscal revenues. At the peak of the last oil boom when Brent was trading at over $100 per barrel, Colombia was pumping just over one million barrels daily, giving the economy a notable boost. By 2013, crude oil was responsible for 55% of exports, nearly 5% of GDP, and more than a fifth of government revenues. The rapid growth of Colombia’s oil industry triggered an economic miracle where the strife-torn country experienced strong growth with gross domestic product expanding at rates greater than many of its regional neighbors. During 2011 GDP expande
Investment in Colombia oil and gas industry fell 49% in 2020
01/29/2021 | 01:15pm EDT
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BOGOTA, Jan 29 (Reuters) - Investment in Colombia s oil and
gas industry fell 49% to $2.05 billion last year, the lowest
since 2016, with exploration investments sliding as the
coronavirus pandemic slashed global fuel demand, the private
producers association said on Friday.
Spending on exploration projects fell to $350 million in
2020 from $780 million in 2019. The total was 62% below
estimates made at the start of last year, the Colombian
Petroleum Association (ACP) said in a report.
Similarly, production investment dropped to $1.7 billion
last year, down 48% versus 2019 and significantly below the
Colombia’s oil sector in 2021 is expected to see a continuance of Covid-19’s dampening effects that beset it in 2020, according to industry leaders and analysts. A measure of the pandemic’s impact is that Colombia’s output in 2020 is averaging 100,000 b/d less than it was in 2019. A small fraction of that decline was .