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Oil stabilises as supply deficit counters demand fears
Colombia wants to speed up discovery and development of its offshore gas reserves to avoid the need for imports and boost industries from power to petrochemicals. Neighboring Venezuela has offered to export gas, but top executives at Ecopetrol and other producers have said that the country must prioritize developing its own resources.
As much as 4 trillion cubic feet (TCF) of natural gas reserves could be confirmed in Tayrona, Travassos said, which makes it a very promising project along with the Gorgon ultra deepwater gas field by Ecopetrol and Shell (SHEL.L) and another deepwater venture by Occidental Petroleum (OXY.N) and Ecopetrol to begin drilling in 2025.
Oil prices rose in Asian trade on Thursday tracking a weak dollar and signs of improving U.S. fuel demand, although softer-than-expected Chinese inflation data limited major gains.
The dollar slid in overnight trade as data showed U.S. inflation continued to decline through April, spurring bets on an imminent pause in the Federal Reserve’s rate hike cycle.
A weaker dollar makes crude more attractive for international buyers, sprucing up demand.
Brent oil futures rose 0.4% to $76.69 a barrel, while West Texas Intermediate crude futures traded 0.4% higher at $72.81 a barrel by 22:07 ET (02:07 GMT).
A sharp drop in U.S. gasoline and distillate inventories also showed that fuel demand was heating up ahead of the consumption-heavy summer season, which could benefit crude prices and tighten markets in the coming months.
Oil Rises as US Signals It Aims to Refill Oil Reserve After June
Recently, the ministry of mines and energy has delegated some functions to the National Hydrocarbons Agency, that will allow us to grow our knowledge mainly in wind energy, geothermal energy and hydrogen," Guatame said at an oil and gas conference organized by the Colombian Petroleum Association (ACP).
The ANH will invest 640 billion pesos ($135.8 million) in projects over the next four years geared toward the energy transition, she said.
According to the road map analysis, the Levelized Cost of Hydrogen (LCOH) in 2030 in Colombia is 1.7 USD/kg, which is similar to the values identified in other countries such as Chile or Australia. This places Colombia in a very important position in the future global hydrogen market, especially considering potential exports. The analysis shows that after 2030, green hydrogen will be produced in some Colombian areas reaching parity of costs with blue hydrogen.
The Road Map projects that the internal demand for hydrogen in Colombia will reach thresholds of 1.6-1.8 Mt by 2050. There is also tremendous solar energy potential in the Guajira area alone, which is projected with the potential to reach 42 GW. If Colombia utilizes all its renewable potential to produce green hydrogen, after the conversion stage, it could obtain 3.2 Mt of hydrogen (5.8 Mt if offshore wind potential were fully exploited). All this to say, it is possible to supply hydrogen for internal demand with renewable sources in Colombia in the upcoming decades.
thanks gator.
just trying to put informative sector info out and what is happening in Colombia
Colombia will get the first pay-out of a $300m Climate Investment Funds pot for transmission lines, batteries, EV chargers and green hydrogen
Is The Oil Price Slide Finally Over?
5
Editor OilPrice.com
Tue, May 9, 2023 at 8:00 PM EDT
Despite oil’s most recent slump to a 15-month low last week, analysts and investment banks continue to expect higher prices at the end of this year as demand is set to pick up with the driving season, and supply is bound to tighten with the OPEC+ cuts in the second half of 2023.
In terms of developing a hydrogen market, Colombia presents two strategic advantages:
High availability of renewable energy sources to produce green hydrogen in areas like the Guajira. With the cost of renewable electricity tumbling, green hydrogen could be cost-competitive as early as 2027, and, certainly before 2030.
Strong geographical location, as Colombia is the link between Central America and South America. They boast transportation, distribution and trade networks with five other countries. It is also located between two oceans, which positions the country in an optimal location for maritime trade and exports. Colombia has 10 port areas, with Cartagena (Caribbean) and Buenaventura (Pacific), as the most important ports.
Furthermore, Colombia has significant oil reserves, natural gas, and coal available for the production of blue hydrogen with carbon capture usage and storage (CCUS) to mitigate associated emissions.
The Ministry of Energy and Mines will use this roadmap to continue the decarbonization of the energy sector. This tool provides an analysis of hydrogen production routes, internal demand, the potential to export to other countries, and mitigation potential. It also identifies the regulatory changes needed to promote hydrogen-based technology and, therefore, to continue with the next step: executing a hydrogen deployment plan and laying out the conditions of the hydrogen supply chain in Colombia.
The main objective of Colombia’s Hydrogen Road Map is to facilitate the development and implementation of more green hydrogen countrywide. This process will enable the country to reduce carbon emissions and meet its ambitious climate commitments under the 2015 Paris Agreement. But to get there, they will need to achieve several steps and milestones in the short, medium, and long term.
Hydrogen is the most abundant element in Earth’s atmosphere. It can be utilized as fuel, an energy carrier, and industrial raw material to store and transport energy. When produced from renewable energy, such as solar or wind, green hydrogen can be essential in the race to net zero. From Namibia to Canada, and Chile to the EU, policymakers are looking at hydrogen more than ever before.
There has been progress for this agenda in Colombia too. Last month, the public consultation deadline of the hydrogen road map concluded, which is available now as of September 30th
These projects, along with offshore wind and green hydrogen initiatives, are expected to generate 120,000 high-paying jobs. However, this will require both training a workforce in a new field while also providing incentives for workers to switch out of the oil and natural gas industry.
Colombia's Congress on Thursday approved a $247.4 billion four-year development plan, paving the way for the government of leftist President Gustavo Petro to implement social and economic reforms.
National Development Plans, presented to Congress by each new government, are generally financed with funds from annual budgets, royalties from oil and mining projects, and resources from municipalities and provinces across the country.
Petro's plan aims to cut the percentage of the population living in extreme poverty to single digits, use financial surpluses from coal and oil to secure a transition to clean energy, and hand over millions of hectares of land to poor farmers to increase agricultural production.
Under Colombia’s new president, there is plenty of optimism surrounding the country’s renewable energy sector and its move away from oil and gas.
Currently, between 40% and 50% of the country’s oil exports come from coal and oil, and taxes from oil firm Ecopetrol provide around 9 percent of the government’s income.
Despite its ambitions, a recent report showed that nearly two-thirds of Colombia’s renewable energy projects due online in 2023 and 2024 are currently facing delays.
Colombia wants to speed up discovery and development of its offshore gas reserves to avoid the need for imports and boost industries from power to petrochemicals. Neighboring Venezuela has offered to export gas, but top executives at Ecopetrol and other producers have said that the country must prioritize developing its own resources.
As much as 4 trillion cubic feet (TCF) of natural gas reserves could be confirmed in Tayrona, Travassos said, which makes it a very promising project along with the Gorgon ultra deepwater gas field by Ecopetrol and Shell (SHEL.L) and another deepwater venture by Occidental Petroleum (OXY.N) and Ecopetrol to begin drilling in 2025.
Petrobras and Ecopetrol last year announced a natural gas discovery at the Uchuva-1 deepwater well in the Tayrona block, 32 km (20 miles) off Colombia's coast. The Brazilian company two years earlier had offered to sell its stake following poor exploration results at a previous well, Orca-1.
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The Tayrona block will be developed "as fast as possible because Colombia needs that gas," Petrobras Exploration and Production Executive Director Joelson Mendes said on Tuesday at the Offshore Technology Conference in Houston. "We have created the structure in the country for that."
The 2024 drilling campaign, set to
Crude prices rose for a third straight session on thinly-sourced reports that the Biden administration will cancel remaining draws from the Strategic Petroleum Reserve, or SPR, and fill it up instead with what could be as many as 200 million barrels or more.
Up until the reports about the SPR surfaced in early afternoon trading, both U.S. crude and global oil benchmark Brent had been down as much as 2% on caution ahead of Wednesday’s release of key inflation data.
The Biden administration’s use of the SPR has been a highly-charged matter for oil bulls and opponents of President Joe Biden. Both sides accuse him of indiscriminately releasing stockpiled oil to subdue crude prices and shore up his political standing with American voters — when the reserve is meant for emergency use, in times of critically short oil supply.
Bloomberg) -- Oil extended its rally for a fourth day, reversing course midday to climb after the Biden administration announced plans to replenish strategic reserves after completing maintenance work later this year.
The Energy Transition Law N°2099 can be a favorable incentive as it establishes a positive fiscal framework for Non-Conventional Renewable Energy investments that can contribute to economic recovery. Hence, the Law considers green hydrogen eligible to tax benefits as specified in Chapter III of Law 1715 of 2014. The Law considers blue hydrogen as well.
Additionally, it is worth mentioning the Bill 365 of 2020 which promotes new technologies such as green hydrogen and recognizes it as a prominent fuel to be utilized in different industries.
For roughly a decade, Colombia’s national government in the capital Bogota has been grappling with growing natural gas supply constraints at a time when demand for the fuel is rising rapidly. The dwindling natural gas supply can be primarily blamed on inadequate proven reserves, a lack of exploration and aging mature gas fields with rising decline rates. By the end of 2021, according to Colombia’s energy ministry, the country had only 3.1 trillion cubic feet of proven natural gas reserves, which at the current rate of production of around 1.1 million cubic feet daily, is only sufficient for another eight years. This points to current reserves being incapable of meeting domestic demand for natural gas in the near future. It is for this reason that Bogota started bulk imports of liquified petroleum gas in late-2017.
The decision on whether or not to sign new contracts or open a bidding round hasn’t been made,” the acting head of the national regulator told Reuters.
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There is growing apprehension in Colombia that President Petro’s plan to end contracting for oil and gas exploration will endanger Colombia’s energy security and trigger a crisis that could roil the economy, much of which depends on energy production and exports. A shortage of natural gas due to declining output from rapidly aging mature offshore fields, coupled with steadily rising demand, poses the greatest threat to energy security. Natural gas is an essential part of Colombia’s overall energy mix, providing 28% of all energy consumed in the country.
Andres Bitar, acting president of the National Hydrocarbons Agency, ANH, told Reuters that the government hadn’t taken any decision regarding the idea of blocking new oil and gas exploration projects.
“The main message that is very clear from the government is that it’s not a decision that’s written in stone,” Bitar said.
finance minister Ocampo signaled in an interview with the Financial Times that the government would not hasten to suspend licensing before analyzing the contracts.
“Then we will see if new contracts are necessary,” Ocampo told FT.
Colombia, which generates nearly half of its export revenues from oil and coal, will not rush to drastically reduce exports in an energy transition the new president has pledged. Energy exports “would have to be gradual” and place gas self-sufficiency as a priority, Ocampo told FT.
The Colombian Government is completely invested in decarbonizing the economy. As stated in their updated National Determined Contribution, they have pledged to reduce Greenhouse Gas emissions by 51% by 2030 compared to 2010 levels. The country is also assessing a domestic emissions trading system to include a carbon tax that will open the door to blue hydrogen technologies while green hydrogen reaches maturity.
Last year, Minister of Mines and Energy Irene Velez told Reuters the government was targeting a 15% increase in oil output using enhanced recovery methods.
Colombia currently produces around 765,000 barrels of oil per day (bpd), Guatame said. This is 1.4% higher than the average production recorded last year, which was 754,199 bpd, according to the ministry of mines and energy.
Some 39% of Colombia's current oil output comes from projects where companies have implemented enhanced recovery technologies, Guatame said.
"This shows a commitment from the companies to also apply new enhanced recovery technologies," Guatame said.
Recently, the ministry of mines and energy has delegated some functions to the National Hydrocarbons Agency, that will allow us to grow our knowledge mainly in wind energy, geothermal energy and hydrogen," Guatame said at an oil and gas conference organized by the Colombian Petroleum Association (ACP).
The ANH will invest 640 billion pesos ($135.8 million) in projects over the next four years geared toward the energy transition, she said.
Colombia oil regulator to invest $135 million in renewable energy
Story by By Oliver Griffin • 2h ago
MARKETS TODAY
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By Oliver Griffin
BARRANQUILLA (Reuters) - Colombia's National Hydrocarbons Agency (ANH) will invest more than $135 million in growing its knowledge of renewable energy options, the agency's new president Clara Guatame said at an industry event in the Caribbean city of Barranquilla on Wednesday.
Hydrogen is the most abundant element in Earth’s atmosphere. It can be utilized as fuel, an energy carrier, and industrial raw material to store and transport energy. When produced from renewable energy, such as solar or wind, green hydrogen can be essential in the race to net zero. From Namibia to Canada, and Chile to the EU, policymakers are looking at hydrogen more than ever before.
Iran seizes second Gulf oil tanker in days as US tensions rise
posting this as it is going to affect energy across the board if this brings a major conflict in that area
good find gator..thank you for the info
Results in Sustainable Infrastructure: Energy and Transport in Colombia
To date, Colombia has seen excellent results derived from the resources provided by the UKSIP. In October 2019, UKSIP supported the design of an innovative energy auction, financing studies about guarantees and a risk and bankability analysis of the awarded projects. Similarly, it provided support to the Energy Sector Transformation Mission that is restructuring the country’s energy sector. The auction’s results will be essential in the country’s Non-Conventional Renewable Energy (NCRE) expansion, which will increase renewable energy capacity from less than 1% in 2018 to 12% in 2022. Hence, support from UKSIP is one of the fundamental reasons why the government will exceed its goals in terms of NCRE capacity. This translates into reaching 2,250 MW, 66% more than what was targeted (1,500 MW) in the Government’s National Development Plan 2018-2022.
Crude oil on track for strong week amid volatility
The market was down much of the week on worries about a looming economic recession and an expansion of the banking crisis with First Republic," said Phil Flynn, an analyst at Price Futures Group.
"But, today there were headlines showing there may be a solution to the First Republic problem, and there was data pointing to a rise in oil demand and a decline in output," Flynn said.
Blue hydrogen could also be used at an early stage to decarbonize specific industrial applications, with a limited window of opportunity in the short-medium term. It would be a low-emission alternative for the progressive transition of the country’s mining and gas sectors while taking advantage of the large gas and coal reserves and expert know-how of the Colombian industry. Hence, blue hydrogen could be the foundation to create and grow the hydrogen supply chain and market until green hydrogen is competitive and can take over.
The unpredictable action of central banks in their mission to tame elevated consumer and producer prices, the rhetoric and action of consuming and producing nations have all cast a rather long shadow of doubt on prospects going forward," oil broker PVM's Tamas Varga said.
Investors will look for market direction from expected interest rate hikes by inflation-fighting central banks, which could slow economic growth and dent energy demand.
Moreover, with the socioeconomic crisis generated by the pandemic, investment in sustainable infrastructure is crucial for economic recovery and the UKSIP can play a fundamental role in closing the infrastructure investment gap sustainably. The program expects to mobilize private sector financing through innovative finance solutions with different instruments such as technical cooperation, blended financing and new models of public-private partnerships (PPP) with high multipliers and co-benefits. Colombia is one of the four countries (together with Mexico, Brazil and Peru) that can benefit from this support.
As infrastructure generates 70% of greenhouse gas emissions globally, to achieve significant global emission reductions it is essential to promote a low carbon economy in the coming decades. In Latin America, however, Gross-Domestic-Product (GDP) investment levels in infrastructure have not matched green growth objectives in recent years. In the case of Colombia, around 7% of GDP per year would be required compared to the 3.6% current investment levels.