At first sight, Colombia's oil industry does not seem to be feeling the effects of the fall in crude prices since the middle of last year. Production levels have not dropped and remain at around one million barrels a day (Mb/d), double that of 10 years ago. However, beneath the figures one finds a series of disturbing signs about the future of the industry: exploration investment is plummeting and oil reserves have fallen to their lowest of the last 15 years.
In recent months, companies operating in Colombia have been competing by increasing production to offset the fall in oil prices. In doing so, they have cut their budgets for the exploration of new wells to redirect resources to increase the recovery factor of existing wells.
Given this situation, the mines and energy ministry and the national hydrocarbons regulator (ANH) have announced a series of measures to stimulate investment in exploration. In addition, regulatory changes have been introduced to make offshore zones and unconventional hydrocarbons more attractive, areas in which Colombia has high and unexplored potential. The growth of Colombia's oil industry in the short and medium term depends on the success of these measures in attracting more investment.
This report describes the current state of the oil and gas industry in Colombia and the effects of falling oil prices, as well as domestic factors. In addition, we outline the strategies adopted by companies operating in the country, and finally we look at the regulatory changes introduced in recent months and the prospects for the development of offshore areas and unconventional hydrocarbons.