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Rising security fears, permit delays and a dearth of discoveries are threatening to end Colombia's nine-year oil boom, according to a new BNamericas Intelligence Series report.
Government figures show local oil production in the first half of 2014 dipped to 979,000b/d, down 2.6% on the year-ago period.
The Oil in Colombia: The Brakes are On report says the country is poised to post a year-on-year output decline for the first time since 2005.
"The change in scenario reflects how the Colombian hydrocarbons sector is being affected by factors ranging from repeated guerrilla attacks to blockades by communities," the report says.
"These difficulties are compounded by an environmental licensing system that in many cases results in projects not progressing on schedule."
The report cites meager interest in July's 2014 Colombia Round as evidence of the local sector's decline.
Only 26% of offshore blocks and 5.5% of unconventional areas available received bids despite improved conditions offered to investors, including royalty discounts and extended exploration periods.
"There was significant progress in the contracts for the 2014 Colombia Round, but some adjustments to the tax regime are still needed to make the country more competitive given the opening up that's happening in Mexico and the opportunities elsewhere in the region and in Africa," the report says.
It added that Colombia lacked a "clear technical and environmental regulatory framework" needed to draw new investors.
BNamericas will host its 11th Southern Cone Energy Summit in Lima, Peru, on November 12-13. Click here to download the agenda.