The 6 causes that would have led Colombia to depend on natural gas imports after 45 years

Despite having an important geological potential, Colombia has seen a marked reduction in the incorporation of proven reserves of natural gas and in the last 11 years they have been reduced to less than half.

Las Proven Natural Gas Reservations of Colombia They went from 5.72 cubic therapy in 2012 to 2.37 cubic therapy in 2023.

During this period, with the exception of 2021, The built -in reserves have been insufficient to replace the volume of gas produced, which explains the constant decrease in reserves.

According to an investigation led by Sergio Cabrales and Juan Benavides for Fedesarrollo, The decline that has been recorded in the national gas offer is due to the combination of six causes.

1. Exploration risk

Between 1952 and 2010, the exploratory success factor has been 23 percent, which means that Only one in four perforated wells reaches commercial viability. This indicator reflects the risks associated with hydrocarbons exploration in the country.

2. Increased state participation in oil revenues

Until 2018, investment was encouraged through tax deductions and benefits, consolidating the sector as the country’s economic engine.

However, the Tax Reform of 2022 increased the participation of the State in the profits generated by hydrocarbons projects.

President Gustavo Petro’s government raised the Government Take from 63 percent to more than 80 percent, with the imposition of surcharge (with additional rates of 5 percent, 10 percent or 15 percent, Depending on international oil prices), greater taxation on dividends and restrictions on asset amortization.

This fiscal approach drastically reduces the profitability of investments and discourages investment in new explorations and hydrocarbons projects.

3. Reduction and brake on exploratory activity

Historically, Colombia has offered more than 1,000 blocks, with 413 signed contracts. While between 2010 and 2014 they were drilling between 110 and 130 wells annually, that figure was reduced to 34 in 2024.

This low activity limits the new discoveries and the incorporation of proven reserves. In addition, since 2021 the country has not awarded new blocks for exploration and production, and the current government has been clear in its decision not to sign additional contracts.

4. Complexity of environmental license procedures, social licenses and previous consultations

These procedures take years to complete. The regulatory environment in these matters prolongs execution deadlines, The projects increase, and its profitability decreases by postponing it entry into commercial operation.

5. Increased insecurity

In the last two years, Colombia has registered More than 2,708 blocking events and about 69 attacks on oil infrastructure.

This situation implies risk for operators, interruptions in the operation of fields and increases in operating costs due to higher security expenses, Infrastructure repair and insurance premiums.

6. Concentrated industry structure and regulatory weakness

The production market is highly concentrated (Ecopetrol has control over more than 80 percent of the domestic offer), which decreases competitive pressure on offer.

In addition, the expansion and collection of distance transport in a slim The entry of the natural fracking gas has been hindered by prejudices.

The discoveries in deep water of the Caribbean Sea, such as those made by Ecopetrol in alliance with Petrobras in the Sirius project, They have revealed high gas potential that could double the current tested reserves of gas (2,3 cubic therapy).

Sirius could produce more than 450 million cubic feet per day (MPCD), which is equivalent to about 40 percent of the current national demand. Nevertheless, Its development faces important technical, logistics and regulatory challenges.

To this is added a complex social panorama where they are required to process More than 100 previous consultation processes before obtaining the environmental gas pipeline license 117 kilometers, which would transport the gas from the site in deep water to the Ballena field, in La Guajira.

Sergio Cabrales and Juan Benavides also assured that Colombia is no longer an attractive destination for investment in hydrocarbons.

Currently, of the 302 current contracts for exploration and production of hydrocarbons in Colombia, 39 are suspended and 57 are in the process of termination, which means that More than 30 percent of the contractual portfolio is inactive.

These suspensions mainly obey social conflicts, environmental licenses and public order problems, as the presence of illegal armed groups.

“The current conditions of the hydrocarbons sector have caused a removal of large oil companies such as ExxonMobil, Shell, Repsol, ConocoPhillips, Chevron y BP, that they no longer contemplate relevant projects in the country, “they point out.