Colombia needs to double oil reserves: Duque

  • Market: Crude oil, Natural gas
  • 11/15/18

Colombia must discover about 2bn bls of new crude reserves to remain self-sufficient, said Colombian President Ivan Duque, with unconventional resources providing the best opportunities.

Duque acknowledged that a "rigorous scientific debate" should be carried out before using hydraulic fracturing to tap such resources, but not an ideological one.

"We cannot accept demagogic discussions that demonize the economy of the country, and those which do not allow the development of the hydrocarbon sector," Duque said during the opening of the country's first comprehensive oil and gas summit held in Bogota.

Colombia's State Council, the highest administrative court, temporarily suspended norms governing hydraulic fracturing on 9 November, citing the production method's potential impact on the environment and human health.

The decision runs up against a campaign by Duque and oil industry groups to pursue unconventional oil drilling. They argue that Colombia needs to consider fracking as a way to sustain hydrocarbon production and government revenue in the form of taxes and royalties.

Colombia's oil self-sufficiency is expected to last until only 2023, a date the government has been able to postpone from the original forecast of 2009 thanks to the discovery of small oil fields. The country's proven crude reserves stood at 1.78bn at the end of the 2017, according to the oil chamber ACP.

Last week, the government appointed a commission to study and make recommendations for initial exploration in unconventional areas.

The State Council suspended Decree 3004 of 26 December 2013 and Resolution 90341 of 27 March 2014, which established norms governing unconventional exploration and production.

The debate should involve both the environmental and hydrocarbon sectors concurrently and ensure protection for water supply, Duque said.

Environmental groups, such as the umbrella group Colombia Free of Fracking, argue that the technique harms fresh water supplies. They say Colombia is among the countries most vulnerable to climate change, and should focus on cleaner energy.

The Ministry of Mines and Energy is readying an appeal at the State Council to seek a reversion of the initial ruling, Colombian oil chamber (ACP) president Francisco Lloreda said today.

Duque said Colombia must achieve the guarantees for fracking, like a stable legal framework, that have been achieved in other countries.

Duque meanwhile warned that the country needs more exploration, more efficiency among oil companies and more technological innovation.

Meanwhile, the president of Colombia's largest coal miner Drummond, Jose Miguel Linares, told Argus that the State Council decision will postpone plans to start production of coal-bed methane (CBM) gas under its Loma association and production contract.

Drummond had expected to produce as much as 14mn cf/d of gas by 2021-2022 at the Caporo project in the Caribbean province of Cesar, which will allow the miner to run the firm's coal operations that consume 13mn-14m cf/d , and become a self-producer of electricity.

Drummond has invested $43mn to explore CBM at La Loma, according to information from the company.

Caporo is expected to produce 6.3mn cf/d in the initial phase.


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