<article><p class="lead">Colombia's 2020 crude production range is expected to fall to 750,000-850,000 b/d depending on a Brent price range of $25-$45/bl, the government said today.</p><p>The non-Opec country is currently producing around 820,000 b/d, down from 857,113 b/d in March and 878,389 b/d in February. The first quarter average was 873,125 b/d, down by 2.1pc year on year.</p><p>Before global oil prices crashed in March, Colombia had been recovering moderately toward a 2020 target of close to 900,000 b/d, compared with 885,000 b/d in 2019, based on a $60-$65/bl price assumption and investment of $5bn-$6bn.</p><p>But the oil supply glut coupled with Covid-19 related restrictions that have sharply curbed <a href="https://www2.argusmedia.com/en/news/2100960-latin-americas-beleaguered-refineries-slashing-runs?backToResults=true&amp;selectedMarket=Crude%20oil">fuel demand</a> has pulled the rug out from under Colombia's 2020 assumptions.</p><p>In a joint press conference today, mines and energy minister Maria Fernanda Suarez and new National Hydrocarbons Agency (ANH) president Armando Zamora laid out the diminished expectations.</p><p>The number of exploration wells programmed for this year is projected to drop from 42 to 20-33, while 2D seismic is seen falling to 850km from a programmed 1,400km. The declines reflect the ANH's easing of contractual commitments to allow oil companies to postpone expenditures that current oil prices no longer cover.</p><p>According to a preliminary report on end-2019 reserves released today, Colombia has 2.036bn bl of proven oil reserves, equivalent to 6.3 years of production. This compares to 1.958bn bl — or 6.2 years of output — at the end of 2018.</p><p>Proven reserves of natural gas totaled 3.1 Tcf at end-2019, equivalent to eight years of production, down from 3.8 Tcf or 9.8 years at the end of 2018.</p><p>The ministry's Suarez told reporters today that the government's plan to issue a tender in May for a Pacific coast LNG import terminal remains on track despite the current crisis. Colombia already has one LNG receiving terminal outside Cartagena.</p><p>Colombia produced 1.105 Bcf/d of gas in the first quarter, up by 5pc from a year earlier.</p><h3>Pipeline tariff row</h3><p>Several oil companies have taken advantage of more flexible upstream contract conditions offered by the government, but private-sector producers are seeking more relief in the form of a 60pc cut in crude pipeline tariffs when Brent is below $45/bl.</p><p>The oil chamber (ACP) today rejected a proposal by state-controlled Ecopetrol's midstream unit Cenit to finance tariffs during May and June. </p><p>The ACP, which represents independent producers, says the main Ocensa export pipeline, which Cenit controls with a 72.6pc stake, offered a 0.6pc tariff reduction to 7.70/bl, following a 10pc tariff hike in July 2019, effectively maintaining a "excessively high" rate.</p><p>The group said today that negotiations have now been exhausted, and it is urging the government to intervene to force a tariff cut. </p><p>The ministry was non-committal in today's press conference.</p><p class="bylines"><i>By Patricia Garip</i></p></article>
