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ANH says the measures will boost the chances of success for existing contract holders and allow the country to reinforce its energy security through the incorporation of new reserves.
"The purpose is to establish criteria that encourage exploration activity," Guatame added.
Colombian oil and gas regulator ANH is close to publishing new rules that will ease requirements for companies with exploration and production contracts.
In a draft resolution released for public comment in May, ANH proposed a 50% extension to drilling timetables in the first phase of exploration and 100% in the second.
It also opened the possibility for operators affected by force majeure to request changes to the physical boundaries of their licenses.
“The ANH has worked in recent months to fine tune an agreement after reviewing comments from the industry," the agency’s president Clara Guatame said during an energy event in Bogotá.
Among other proposals, ANH has proposed that holders of licenses for unconventional oil and gas deposits may convert their contracts to allow conventional exploration in the same areas.
In addition, unconventional block holders would be free to use the acreage to develop renewable power projects or carbon capture, utilization and storage (CCUS) initiatives.
ANH says the measures will boost the chances of success for existing contract holders and allow the country to reinforce its energy security through the incorporation of new reserves.
"The purpose is to establish criteria that encourage exploration activity," Guatame added.
According to statistics agency Dane, oil and gas accounted for more than a third of Colombia's total export revenue in 2022.
Colombia needs more natural gas imports to meet growing power demand as El Niño-influenced weather conditions have resulted in water shortages, necessitating a shift away from hydroelectricity.
International oil and gas majors, including UK-based Shell and Brazil's Petrobras, have shown interest in expanding their participation in natural gas projects offshore Colombia, Ricardo Roa, the head of Colombia's state energy firm Ecopetrol, has told Bloomberg in an interview.
Colombia's Caribbean coast has several promising offshore gas projects and recent deepwater discoveries have raised the hopes that the South American country could become a natural gas exporter.
Thanks energy. Industry news is all we have right now. wish we had an official update like everyone else here..Until then, all I can do is glean from the energy world in Colombia and beyond… glta longs still holding
In terms of cleaning up the current energy makeup, "the goal is to lower methane emissions by 45% between now and 2025 and some 55% by 2030," he said.
Ecopetrol has made an effort to incorporate natural gas as an element of the green transition by investing in technology in what Roa called an "important local bet."
"We have five or six important (renewable energy) projects that we're looking to participate in," he said, without giving details due to confidentiality agreements.
International oil majors are pushing to expand production at natural gas projects off Colombia’s Caribbean coast, Ecopetrol SA Chief Executive Officer Ricardo Roa said in an interview.
Ecopetrol has made an effort to incorporate natural gas as an element of the green transition by investing in technology in what Roa called an "important local bet."
"We have five or six important (renewable energy) projects that we're looking to participate in," he said, without giving details due to confidentiality agreements.
Colombia's state-run energy company Ecopetrol (ECO.CN) will seek to become a player in clean and renewable energy generation to meet its own demand while also promoting the South American country's energy transition, its chief executive said on Monday.
Ricardo Roa, who has led the $25 billion company for five months, said he sees opportunities for Ecopetrol in some projects that rivals have quit.
"We are seeing a window of opportunity in projects that other important players have been announcing that they will abandon for various reasons, some due to environmental restrictions, some to restrictions with the communities," Roa said, although he did not provide details of how Ecopetrol would overcome the challenges.
Colombia's first leftist president Gustavo Petro wants to move away from fossil fuels and has stopped awarding new exploration licenses for oil and gas. But Colombia has 11 existing licenses in which some international majors partner with Ecopetrol.
One such venture, a Shell- Ecopetrol collaboration, found gas last year in the Gorgon-2 well in Colombia's Caribbean deep waters. Ecopetrol and operator Shell are partners in the Col-5, Fuerte Sur, and Purple Angel blocks in the Caribe Sur area with a 50% interest each.
International oil and gas majors, including UK-based Shell and Brazil's Petrobras, have shown interest in expanding their participation in natural gas projects offshore Colombia, Ricardo Roa, the head of Colombia's state energy firm Ecopetrol, has told Bloomberg in an interview.
Colombia's Caribbean coast has several promising offshore gas projects and recent deepwater discoveries have raised the hopes that the South American country could become a natural gas exporter.
There are fears that the recent arrival of the El Niño weather phenomenon in Colombia will once again sharply impact water levels and, hence the output from the country's hydro-plants. This will force Bogota to expand electricity production by employing gas-fired powerplants to boost output, placing further pressure on already constrained natural gas supplies. Rapidly rising demand for natural gas, including stockpiling the fuel for use in thermal powerplants due to the threat posed by El Niño, saw LPG imports for the first eight months of 2023 soar.
For the reasons discussed, there are considerable supply-side pressures in Colombia when it comes to domestically produced natural gas. Consumption of the fossil fuel in Colombia is climbing at a steady pace, with demand now significantly exceeding supply. This first occurred in 2016 as a decline in water levels due to a severe drought triggered by the El Niño climate phenomenon saw the volume of hydroelectric power, which provides around 70% of Colombia’s electricity, plunge. That placed considerable pressure on Colombia’s already fragile electric grid, forcing Bogota to employ natural gas-fired power plants to bolster electricity output at a crucial time. That added to the growing supply shortage of the fossil fuel, which was resolved by ramping up LPG imports.
International oil majors are pushing to expand production at natural gas projects off Colombia’s Caribbean coast, Ecopetrol SA Chief Executive Officer Ricardo Roa said in an interview.
Companies including Petroleo Brasileiro SA and Shell Plc have expressed interest in increasing involvement in the deep-water gas fields that could eventually turn Colombia into an exporter of the fuel, he said at New York’s Bloomberg headquarters.
He added that Colombia has proven reserves of seven years, "but with some contingencies that oil could go up to 10 years and gas up to 20 years."
Investors were concerned when President Gustavo Petro came to power in August aiming to decouple the economy from fossil fuels and make way for renewable energy, which drove the local peso to a record low against the dollar in November.
Bonilla said the switch to renewable energy would be a lengthy process.
"The energy transition is going to take 15 to 20 years and we are going to continue exporting oil and coal for much longer," Bonilla told Reuters.
The minister was fresh off a meeting in New York with investors, whose main concern was assurances around fossil fuel revenues.
"The most important issue is how we closed the discussion on oil exploration and exploitation, which was to show the map of where the exploration fields are in Colombia, (and) the current contracts," added the official, who was appointed in late April as Petro's second finance minister in less
Bonilla specified that the country currently has 202 hydrocarbon exploration contracts in an area of about 17 million hectares in places where oil or gas has traditionally been found.
He added that Colombia has proven reserves of seven years, "but with some contingencies that oil could go up to 10 years and gas up to 20 years."
Ecopetrol previously reported it will invest between around $6.1 billion and $7.2 billion this year to speed the transition toward renewable energies and help Colombian maintain energy self-sufficiency, among other investments.
Reuters this week reported that resistance from Indigenous groups in desert La Guajira province has hamstrung development of more than 50 possible wind and solar projects.
Asked about potential new bidding rounds for oil and gas blocks, Camacho said awarding new blocks was no guarantee of success.
Overcoming those problems will require a resetting of relations between all stakeholders, he said.
"The change in the energy model involves reestablishing trust," Camacho said.
"Communities don't allow projects to develop because they don't see any benefit for them. Companies don't trust the state because the state doesn't help overcome these issues. The state doesn't trust companies because some have not delivered (and) the people don't trust the government," he said.
Colombia's majority state-owned oil company Ecopetrol (ECO.CN) is looking at the possibility of restarting exploration at eight suspended oil and gas contracts, chief executive Ricardo Roa said on Wednesday.
The government of leftist President Gustavo Petro has prioritized weaning Colombia off of its dependence on oil and coal, major sources of income for the country, while also pushing a transition to renewable energy.
revenues fell to $8.7 billion,
Though the government has said it will not sign new exploration contracts, it is looking to revive at least 21 suspended oil and gas deals. That tally includes three concessions belonging to Ecopetrol.
"They are eight (contracts) of those which have been suspended," Roa told journalists in Bogota. "We are revising the possibility of reopening (exploration) in these contracts.
The company is looking at reviving seven contracts held by Ecopetrol and another by its wholly-owned subsidiary Hocol, a company spokesperson confirmed. The eight contracts are located in Colombia's Casanare province.
Petro's goal of weaning Colombia away from its dependence on oil and coal, a major source of income, amid acrimony between the administration and energy and mining companies.
Overcoming those problems will require a resetting of relations between all stakeholders, he said. "The change in the energy model involves reestablishing trust," Camacho said. "Communities don't allow projects to develop because they don't see any benefit for them. Companies don't trust the state because the state doesn't help overcome these issues.
Colombia has significantly ramped up imports of liquefied natural gas to conserve its hydroelectric operations as El Niño threatens to bring dryness to the South American nation, according to the power generators’ association.
The country has already imported 309,000 metric tons of LNG as of Monday amid emerging prospects of an El Niño, according to data compiled by Bloomberg. That is almost 60% more than all of last year and more than triple 2021’s annual total, the data show.
At present, the government is attempting to revive some of its existing oil and gas projects in a bid to keep developing the industry without having to approve new exploration licenses. It hopes to help energy companies revive at least 21 suspended oil and gas contracts through a $38 million initiative, according to the National Hydrocarbons Agency (ANH)
While there is still potential to develop Colombia's licensed hydrocarbon regions, many are doubtful that this will be enough to allow the country to maintain its energy independence. President Petro decided to ban new oil and gas licenses in favour of a green transition, however, energy experts believe this may eventually make Colombia reliant on imports of the fossil fuels, as production decreases dramatically over the next decade. To ensure the country's energy security it seems that Petro must either allow new licensing to go ahead or rapidly develop the country's renewable energy sector to fill the anticipated demand gap within the next decade.
Renewables take time to develop and therefore cannot immediately start meeting the country’s electricity demands. To lower emissions in the meantime, the country can turn to natural gas as a transition energy source, says Tomás González, CREE’s director and a former minister of Mines and Energy. Emissions per unit of energy from natural gas are 40% lower compared to coal, which Colombia is using to power some energy plants, and also emits up to 20% less than oil, which is ubiquitous in the transport sector. According to González, Colombia’s energy transition strategy should include a gas production increase of 50% by 2040, and then shrink to around half of what it is today by 2050, when new renewables can take on a larger generating capacity.
Like most developing countries, Colombia faces the difficult task of cutting emissions while simultaneously bringing about development. If it maintains its current growth trajectory, Colombia’s GDP is projected to triple by 2050. Yet to become a net-zero emitter by that same year, the country can increase its final energy demand by only 30%, according to estimates by the Regional Center for Energy Studies (CREE), an independent energy-policy think tank. This means the electricity sector will need to undergo a remarkable transformation in efficiency, striving to increase its low emissions generating capacity fivefold.
Oil and gas exploration has been at the heart of Colombia’s national energy strategy and that of its National Oil Company, Ecopetrol. But as the world decarbonises and Colombia focuses on its own net zero target, the winds of change are blowing. How can the country now become a regional leader in a sustainable approach to energy?
Colombia could diversify into metals exports
Colombia is already a small nickel producer and could shift its ferronickel production to nickel sulphate, used in electric vehicle (EV) batteries. Colombia is also one of 20 governments that has a Free Trade Agreement (FTAFTA) with the US. This is a critical piece of trade policy in place that could support expanded trade with the United States following the IRA.
Colombia is also has material reserves of copper, another metal essential to the energy transition. More exploration and permitting clarity are required to ramp up production.
Giving the green light to low-carbon hydrogen
As wind and solar expand, we expect resulting lower power costs to help green hydrogen produced in Colombia become economically competitive with current forms of hydrogen production and some fossil fuel sources by the 2030s.
Hydrogen-to-power strategies are key to decarbonisation pathways in Europe and Asia, making these key potential export markets for hydrogen produced in Colombia. We estimate the levelised cost of hydrogen (LCOH) in Colombia could be similar to Chile’s. Potential export volumes from Colombia would be globally competitive, especially into Europe.
An important opportunity has opened up for the country to move towards the energy transition and position itself as a great supplier of hydrogen worldwide," said Conservative party member Nicolás Barguil after a lower house committee concluded the bill's first debate.
The proposed legislation has received support from the Colombian hydrogen association, natural gas industry group Naturgas, business association Andi and renewable energy guild Ser Colombia, among other groups, he added.
The mines and energy ministry unveiled its long-term blueprint for clean hydrogen in 2021, outlining plans for up to 3GW of electrolysis capacity by 2030 and envisaging wide-scale adoption of fuel-cell vehicles.
The country also faces rising demand for gas and tightening supply. According to energy ministry planning unit UPME, Colombia could lose its natural gas self-sufficiency within 18 months unless new reserves are incorporated.
The grim outlook has led to plans to expand the Cartagena LNG import terminal, Colombia's only existing regasification facility. It also prompted officials to raise the prospect of reactivating a disused pipeline that would allow for gas imports from Venezuela.
In addition, the government continues to seek investors for the Pacific LNG terminal, which is expected to require investment of up to US$1bn. Bids in the latest tender process are due this month, but potential developers have raised concerns about who will bear the cost of the project and if it will be profitable.
There have been whispers that the looming supply crunch could force the government to back down on its decision to shelve auctions for new E&P contracts, even if it is just for natural gas exploration.
This, however, might be wishful thinking, given an absence of oil and gas sector experience on Camacho's resume and a pledge during his induction to “reduce the environmental impact of fossil fuels.”
Canacol Energy is ratcheting up exploration at four Colombian natural gas prospects as it seeks to meet rising demand for the fuel from thermoelectric generators.
The program is targeting exploration prospects ... close to the Jobo production facility that can be commercialized very quickly, allowing [us] to build productive capacity to meet the anticipated high demand for gas associated with the upcoming El Niño phenomena," the Calgary-based company said.
Meteorologists have already confirmed the arrival of El Niño in Colombia, a weather phenomenon that could severely reduce the availability of hydroelectric power.
Hydroelectricity accounts for more than two-thirds of Colombia's installed power capacity and in times of drought the country relies on back-up plants fired by gas, coal or liquid fuels.
Oil prices have been slowly moving higher in recent weeks as bullish sentiment begins to build on the back of Saudi Arabia's supply cut and Russia's pledge to cut its oil exports.
It’s possible for Colombia to reach 100% clean energy by 2030, in part because 70% of its current grid energy is from hydroelectricity. Supply side incentives for alternative energy are fast increasing. Both solar and wind are booming in the region with technical know-how fast developing. Previously marginalized Caribbean areas of the country enjoy solar radiation that’s well above global averages. Hydrogen production possibilities made significant progress in Colombia in 2021, though it will depend on water electrolysis and tumbling prices for clean electricity needed for production.
The country’s National Hydrogen Strategy and Roadmap includes plans to expand the hydrogen infrastructure in the transport sector focusing on the long-haul heavy-duty sector. In transport and for export, Colombia’s production of sulfur-free biofuels, in particular ethanol and biodiesel, have beneficial environmental impacts, reduce greenhouse gas emissions, and stimulate rural economic development. In 2022, biofuels in Colombia replaced more than 20,000 barrels per day of fossil fuels consumed and generated close to a 100,000 jobs. The fiscal impact of biofuel production is significant, both strategically for import substitution and for the dollar-sensitive needs.
NGVs, powered by cleaner fuel with lower emissions of CO2 and particulate matter, provide a sustainable alternative to fossil fuel vehicles. In 2022 alone, the use of NGVs in Colombia prevented the emission of over 148,000 tons of carbon dioxide. NGVs also reduce nitrogen oxide (NOx) emissions by 80% and reactive hydrocarbons, which contribute to smog, by up to 95%.
The initiative aimed to encourage Colombians to embrace NGVs and contribute to reducing air pollution and its harmful effects. By choosing natural gas vehicles, individuals can make a positive impact on the environment and their communities.
In the month of July, Colombians come together to honor the Virgin of Carmen, patron saint of their community. This celebration, known for its parades and processions, has become a cultural event that attracts people from different religious backgrounds.
However, it is important to address the impact of vehicles powered by fossil fuels on the environment and public health. In Colombia, these vehicles are responsible for 78% of air pollution, leading to increased greenhouse gas emissions and negative effects on ecosystems.
To raise awareness about this issue, Vanti, a Colombian natural gas service company, partnered with VMLY&R COMMERCE | Geometry to deliver a powerful message during the Virgin of Carmen celebration. They created a series of prints showing vehicles wrapped in a haze of pollution, accompanied by the slogan “Convert”, urging people to switch to natural gas vehicles (NGVs).
Backing up those words with proof that he can spearhead a successful energy transition could catapult him into a prominent environmental leadership position that Latin America desperately needs. From such a position, Petro could also take advantage of Colombia’s status as the United States’ closest ally in the region to attract investment for the energy transition and for efforts to protect the Amazon rainforest. The energy transition was Petro’s biggest opportunity to outshine his regional counterparts on a global stage.
Renewables take time to develop and therefore cannot immediately start meeting the country’s electricity demands. To lower emissions in the meantime, the country can turn to natural gas as a transition energy source, says Tomás González, CREE’s director and a former minister of Mines and Energy. Emissions per unit of energy from natural gas are 40% lower compared to coal, which Colombia is using to power some energy plants, and also emits up to 20% less than oil, which is ubiquitous in the transport sector. According to González, Colombia’s energy transition strategy should include a gas production increase of 50% by 2040, and then shrink to around half of what it is today by 2050, when new renewables can take on a larger generating capacity.
Backing up those words with proof that he can spearhead a successful energy transition could catapult him into a prominent environmental leadership position that Latin America desperately needs. From such a position, Petro could also take advantage of Colombia’s status as the United States’ closest ally in the region to attract investment for the energy transition and for efforts to protect the Amazon rainforest. The energy transition was Petro’s biggest opportunity to outshine his regional counterparts on a global stage.
Meanwhile, Petro keeps trying to sell his country as the promised land for renewables. In mid-June, Colombia’s president was in Germany promoting the country’s green hydrogen potential.
Renewables take time to develop and therefore cannot immediately start meeting the country’s electricity demands. To lower emissions in the meantime, the country can turn to natural gas as a transition energy source, says Tomás González, CREE’s director and a former minister of Mines and Energy. Emissions per unit of energy from natural gas are 40% lower compared to coal, which Colombia is using to power some energy plants, and also emits up to 20% less than oil, which is ubiquitous in the transport sector. According to González, Colombia’s energy transition strategy should include a gas production increase of 50% by 2040, and then shrink to around half of what it is today by 2050, when new renewables can take on a larger generating capacity.
Like most developing countries, Colombia faces the difficult task of cutting emissions while simultaneously bringing about development. If it maintains its current growth trajectory, Colombia’s GDP is projected to triple by 2050. Yet to become a net-zero emitter by that same year, the country can increase its final energy demand by only 30%, according to estimates by the Regional Center for Energy Studies (CREE), an independent energy-policy think tank. This means the electricity sector will need to undergo a remarkable transformation in efficiency, striving to increase its low emissions generating capacity fivefold.