How to read the hydrocarbon reserves report in Colombia?

How to read the hydrocarbon reserves report in Colombia?
How to read the hydrocarbon reserves report in Colombia?

Orlando Velandia, president of the National Hydrocarbons Agency (left), and Andrés Camacho, Minister of Mines, during the presentation of the 2023 reserves report.

Photo: Mauricio Alvarado

The National Hydrocarbons Agency (ANH) presented this Friday the information on how the hydrocarbon reserves are in the country.

The oil figures for December 2023 totaled 2,019 million barrels, which represented a reduction of 54 million barrels when compared to the figures for the end of 2022.

When reviewing the relationship between proven reserves (the so-called P1) versus production, the country’s oil self-sufficiency fell from 7.5 to 7.1 years, the second consecutive decline.

On the gas side, the outlook seems worrying, according to some analysts. The ANH report, which was carried out with information from 452 fields, revealed that proven gas reserves were located at 2,373 cubic gigapies (Gpc). The commercialized gas production was 386 Gcf, which leads to a proven reserves/production ratio of 6.1 years. By 2022, gas self-sufficiency had been set at 7.2 years.

This is the second largest annual drop in reserves in the last decade (the worst was between 2018 and 2019).

“If we did nothing, we would have oil for seven years. But every year we do a replacement process. By 2023, for every five barrels, 4.05 barrels will be replaced,” explained Orlando Velandia, president of the ANH.

And, clearly, this is not the case: although Gustavo Petro’s government has been clear that it will not authorize new hydrocarbon exploration, the country has been gaining some efficiency in the 300 contracts it currently has in force (according to figures from the Ministry of Mines), which cover some 16 million hectares of oil.

Both Velandia and the Minister of Mines, Andrés Camacho, emphasized the efficient production of the so-called lazy fields (current contracts, but without further exploitation). The president of the ANH even mentioned cases in which the producing companies have not even appeared in the areas where they should be exploiting hydrocarbons.

Camacho, for his part, assured that the exploration policy “is giving results” and said that the Government seeks to “increase exploration in terms of energy transition.” He added that the Government’s commitment continues to be to energize the contracts that have already been signed.

The bottom line is whether it is possible to increase energy self-sufficiency, and throw ourselves headlong into the aforementioned transition, increasing the efficiency of what is already underway in hydrocarbons. Or, as the industry assures, it is necessary to carry out new explorations and, with them, sign more hydrocarbon contracts.

For Julio César Vera, president of the Xua Energy Foundation, the reduction in the gas outlook “places us in a critical situation”, due to the importance of this fuel in terms of domestic users, industry and as energy backup for the electrical system. (via thermal plants, which saved us from rationing during the last part of the El Niño phenomenon).

Just as it is not very convincing to talk about heavy metal without electric guitars, invoking the energy transition without having natural gas does not sound entirely possible.

What can be done? The ANH report offers a light, via contingent resources.

Contingent resources, such as the oil ecosystem in general, are full of technicalities. In the case of reservations it is important to understand some of these.

The country’s reserves and resources are divided into proven, possible and probable. The tested ones are those that are ready to be developed and have a 90% probability of extraction, that is, those with which the report showed that there is a self-sufficiency of 7.5 years.

The probable ones, in short, are those that do not have enough geological information to be developed.

And the possible ones are the type of reserves for which “there is no certainty of recovering economically, which require an environmental and contractual procedure,” as Luz Stella Murgas, president of Naturgas, defined them in a past interview.

In addition to this, there are contingent resources that, as their name indicates, have not been able to be extracted for various reasons or contingencies.

According to the ANH report, the country significantly increased its total contingent resources in 2023, both oil and gas (growth of 18% and 29%, respectively).

This means that, in oil, 2,783 million barrels were recorded and in gas 7,506 Gcf were recorded in the highest estimate of this type of resources.

Given this scenario, Vera assured that it is important that “a significant use is made of the contingent gas resources, of almost 2 tera cubic feet additional that, taking the appropriate decisions in technical matters, social and environmental licensing and in contractual and “The regulatory framework allows these contingent resources to be quickly transferred to reserves and the country can once again not only increase its level of self-sufficiency above 10 years, but also have additional income in royalties.”

What are the contingencies that retain these resources in the subsoil? Well, in the case of oil, the main category is environmental and social (43%), according to the ANH report. These reasons are followed by legal/contractual issues (21%) and economic issues (19%).

On the gas side, the main contingency is economic (39%), followed by technical issues (35%) and legal/contractual issues (24%).

 
For Latest Updates Follow us on Google News
 

-

PREV Colombia debuts in the Copa América
NEXT official candidate De Rivas won with the support of Llaryora despite PJ divided