Colombian oil rig activity hitting new highs despite political risk

Colombian oil and gas drilling will continue to surge in the coming months despite growing uncertainty about the sector's future under President Gustavo Petro, according to national industry chamber Campetrol. 

The number of active rigs in the Andean country is seen rising from 156 in September to 159 in October, 161 in November and 162 in December, Campetrol said in a report. 

Sixty of the rigs utilized last month were allocated to exploration drilling and 96 to workovers. The overall figure has risen from 88 in September 2020, when COVID-19 restrictions forced major field shutdowns and decimated energy demand. 

"There is evidence of an increase in the amount of equipment [designated for oil and gas drilling] due to two factors: private companies that have started new operations and ... the accelerated execution of said contracts to cover budgets," the Bogotá-based entity said. 

Campetrol's forecast defies warnings, at least in the short term, that Petro's election victory in June could have sounded the local sector's death knell. 

The former Bogotá mayor has pledged to stop issuing E&P licenses and proposed new taxes on producers since assuming office on August 7.  

The measures – designed to wean the country off fossil fuels and accelerate a shift toward renewable energy – has prompted fears that Colombia could be forced to import gas by 2026 and oil by 2028.  

While optimistic about the remainder of 2022, Campetrol warned the panorama could change swiftly if Petro succeeds in pushing through his reform agenda. 

"With the latent downward risks for 2022, associated with the change of government and the tax reform, it will be important to review the data expected for 2023," it said. 

Campetrol, which represents more than 140 companies in Colombia's oil goods and services segment, said seven exploration wells were drilled in September compared to two a year earlier. Four of the prospects were located in the Llanos Orientales basin while the Lower Magdalena Valley, Caguán-Putumayo and Cordillera Oriental basins were home to one well each. 

From January 1 to September 30, oil and gas operators acquired 1,871km of seismic data, a 62% year-on-year increase. 

Campetrol said contractors hired by state-run company Ecopetrol had 57,808 workers dedicated to the company's projects in August 2022. It added that 50.3% related to skilled labor.