Colombia’s energy self-sufficiency and GDP at risk as reserves, production and investments plunge

Colombia, Latin America’s third-largest oil producer after Brazil and Mexico, is in danger of losing its energy self-sufficiency and a significant part of its gross domestic product (GDP) in the future, unless the pace of exploration accelerates, a Rystad Energy report has revealed. The country’s oil and gas output along with its total proven reserves tally are in decline, while investments will likely fail to recover to pre-Covid-19 pandemic levels this decade.

Crude oil production in Colombia this year is on track to hit its lowest level since 2009, currently averaging at just over 730,000 barrels per day (bpd), down from 754,000 bpd in 2020, which was already an 11-year low, Rystad Energy data shows. Amid a lack of discoveries, meanwhile, the country’s proven crude reserves as of the end of 2020 stood at 1.82 billion barrels, a three-year low and a far cry from the 2.45 billion barrels recorded in 2013 when the country was flexing its muscles against regional peers.

While natural gas output in Colombia has been largely flat since 2016, averaging just over 1.07 billion cubic feet per day so far this year – which is a 2.7% rise against 2020 – it is well below the highs of the previous decade. Its proven gas reserves, in contrast, have been on a continuous decline since 2012, ending 2020 at just 2.95 trillion cubic feet (Tcf), nearly half the 5.73 Tcf recorded in 2012.

Rystad Energy’s outlook shows that brownfield and greenfield investments on existing discoveries – despite a very marginal uptick expected in the next two years compared with this year’s five-year low of $2.3 billion – are set to drop to below $1.7 billion in both 2024 and 2025, the lowest level in Colombia’s modern oil and gas history. In the second part of the decade – and thanks to an expected mild growth in greenfield investments – the combined spending will rise slightly but never exceed last year’s $2.6 billion, let alone the pre-pandemic level of $3.7 billion in 2019.

“Colombia is in urgent need of additional investments and exploration success as proven resources have dwindled. It must double these resources in the next decade to continue to be energy self-sufficient. Although its exploration sector stayed dormant in recent years, there is some hope from wildcats following a recent acreage offering,” says Sofia Forestieri, upstream analyst at Rystad Energy.