Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Colombia’s Ecopetrol Sticking to Natural Gas Strategy Amid Changes in Energy Sector
Colombia’s Ecopetrol SA kept adding oil and gas production in the third quarter.
ecopetrol
In an earnings call last month, CEO Felipe Bayón cited deepwater gas discoveries in the Caribbean in the Gorgon-2 with partner Shell plc, and another find by subsidiary Hocol SA in Cordoba department. He said this reiterates “Colombia’s potential for gas, the hydrocarbon of the energy transition.”
The country has now identified about 17 Tcf of gas resources, executives said. This would amount to about 10 years of supply.
Production at the state firm rose to 720,000 boe/d in the third quarter, compared to 684,000 boe/d in the same period last year. Natural gas along with natural gas liquids and liquefied petroleum gas accounted for 24% of production in the third quarter. This was a 13% jump from the year-ago quarter.
Bayón has previously stated company intentions to up gas supply.
Production figures included the company’s joint venture with Occidental Petroleum Corp. in the Permian Basin’s Midland formation in West Texas. Net production to Ecopetrol was 43,800 boe/d in the third quarter, up 79.2% year/year.
The company is aiming for output of 720-725,000 boe/d for next year.
Despite a directive by new president Gustavo Petro to halt new oil and gas contracts, existing contracts are being respected, executives said. In the first nine months of the year, Ecopetrol completed 407 development wells, up 42% year/year.
Gas Expansions
The company is promoting natural gas throughout the country as part of a strategy to lower emissions. It launched a pilot project for small-scale LNG into the district of Buenaventura to guarantee supply to the city. The liquefied natural gas project is expected to supply 45,000 users.
Another project would finance the purchase of around 4,000 heavy load vehicles powered by natural gas.
Great post, hope everyone has a Happy Thanksgiving.. wishing for health and happiness as we close out this year. An update would be nice too. Keep the faith longs!
“The investment in these 200 new vehicles consist mostly of concrete mixer trucks powered by low emission compressed natural gas (CNG) or renewable natural gas (RNG). These trucks will have a carbon footprint that is approximately 25% lower than the diesel trucks they are replacing. Over half of the vehicles are in Mexico, with the remaining half split between Southern California in the U.S. and Colombia.”
Natural gas truck sales jump, but infrastructure support sliding
The six major truck OEMs account for approximately 60% of the heavy-duty natural gas market.
The six major truck OEMs account for approximately 60% of the heavy-duty natural gas market.
Sales of natural gas Class 8 trucks for the first five months of the year climbed 11% over the same time period last year, according to ACT Research.
Sales of natural gas-powered vehicles as reported by the six major truck OEMs – who account for approximately 60% of the heavy-duty natural gas market – were mixed from March to May, with March dipping 3% year-over-year, April jumping 23% compared to last April, and May flat versus a year ago.
Tam noted his firm is seeing an overall increase in electric charging stations (both existing and planned), accompanied by a continuing decline of total natural gas stations, "particularly those planned for the future," he added. "That said, we still see articles about natural gas use in transportation, as well as discussions about hydrogen fuel cells and investments, but the overwhelming amount of trade-industry headlines continues to focus on electric commercial vehicle development.”
The investment in these 200 new vehicles consist mostly of concrete mixer trucks powered by low emission compressed natural gas (CNG) or renewable natural gas (RNG). These trucks will have a carbon footprint that is approximately 25% lower than the diesel trucks they are replacing. Over half of the vehicles are in Mexico, with the remaining half split between Southern California in the U.S. and Colombia.
“Natural gas is the backbone of the energy transition,” Bayon said at the Congreso Naturgas conference in Cartagena last week. "The enemy is not the source of the energy, it is the emissions, and that is what must be controlled.”
they know and we know it too..
Keep the faith a little longer.. it does not do us or the company any good to not trade.
Good read!
“However, Ecopetrol's Bayon has maintained that fossil fuels have an important role to play the transition and suggested that policies aimed at curbing oil and natural gas production were pointed at the wrong target.
"Natural gas is the backbone of the energy transition,” Bayon said at the Congreso Naturgas conference in Cartagena last week. "The enemy is not the source of the energy, it is the emissions, and that is what must be controlled.”
Prayers indeed, years of rebuilding ahead down there..
the biggest mystery will be figuring out how high the price will go and when to sell. Keep the faith!
Agreed, praying for an update soon. If/when we get one I feel it will be worth the wait.. jmho
Can Petro Move Colombia Away From Oil?
If his presidency goes according to plan, the country could become the world’s biggest crude exporter to halt new exploration.
Petro has said he would honor existing exploration and production contracts so that oil revenues can be gradually replaced by growth in other sectors, such as agriculture, manufactured goods, tourism, and clean energy. The Colombian Association of Petroleum and Gas estimated in May that cutting new oil contracts could cost the government around $4.5 billion in tax revenue by 2026.
Yes, clearly in 4 years we could easily see a swing back in Colombian energy policy. And! Regardless, of which side of the Climate change coin you’re on, natural gas is still in a favorable position to capitalize on either camp..
Good luck and stay safe to anyone in Hurricane Ian’s path!! Many reasons to keep the Faith..
Great points to consider, thanks energy.
My thought as well. Demand for natural gas will continue all over especially, with the designation as a transition fuel. Keep the faith!
Wall Street Is Increasingly Bullish On Energy Stocks
Bloomberg survey: Equity strategists, portfolio managers, and retail investors have grown increasingly bullish on energy stocks.
A shortage of critical fuels such as natural gas and diesel could boost the stocks and bonds of energy companies as they have the ability to invest in more oil and gas supply.
Bloomberg survey: natural gas to be the most constrained commodity in the short term.
Great to hear, BBall!
This bodes well for foreign companies trying to operate in Colombia..
Makes sense, probably long line to meet with the new admin
September is here and we have no update, no news, no trading, nothing. We have promises from the past and glimmers of what could be..
However, We also do not have the company telling us that they are done, out of business, canceled, have given up, thrown in the towel, etc.. until that happens my friends I am choosing to believe they are still grinding to get the project going and back to trading. As energy said, and I vehemently agree, it does not do them or us any good to not be trading!!
Keep the faith!!!
Happy Labor Day longs, great college ball this weekend!
Another good one..
Colombia seeks dialogue on the role of natural gas
Published: Monday, August 29, 2022
Statement from the Ministry of Mines and Energy of Colombia
Minenergy. Cartagena, August 27, 2022. During her visit to Cartagena, the Minister of Mines and Energy, Irene Vélez Torres, met with the President of Promigas, Juan Manuel Rojas, with whom she discussed various topics such as the energy transition, green hydrogen and natural gas.
In the middle of the conversation, the President of Promigas highlighted the role of natural gas in the energy transition, arguing that it helps to mitigate energy poverty and that it provides multidimensional, monetary and environmental well-being.
For her part, the Minister reiterated that the Government will continue to ensure energy independence while the transition process is carried out towards a much more sustainable and environmentally friendly matrix.
“We are going to strengthen research, science and technology for industrialization and taking advantage of all the opportunities and resources available around the energy transition. This transition process will be fair, gradual and social, with the real participation of the communities”, said Vélez Torres.
On the other hand, Juan Manuel Rojas presented the portfolio of new low-emission solutions that Promigas is developing to contribute to the decarbonization of the Colombian energy matrix.
Happy Friday longs, better days coming soon (in my opinion). if not, at least football is back!
Energy Transition
BNamericas: In several Latin American countries that are still very dependent on fuels, natural gas is spoken of as a transition energy source. However, we see that the natural gas market is in great turmoil due to the Russian invasion of Ukraine, with sky-high prices and supply problems in Europe. Do you think this new scenario will make gas less attractive for some Latin American countries?
Beltrán: Naturally, in the countries that are more dependent on more polluting fuels, it’s a good alternative to move towards cleaner fuels. But it’s simply a transition fuel: the future still lies in having sources that don’t generate emissions, if we want to comply with a deep decarbonization route, as agreed by the different countries in the United Nations Framework Convention on Climate Change.
In countries that already have a very clean matrix, such as Brazil, perhaps the role of gas is not so decisive at the local level, although it is for the external sector. The incentive you have is to take advantage of the available resources to take advantage of the opportunities that are being generated in Europe or Asia. The incentives are in the short term to meet that demand. But in the medium and long term, the market will adjust and it will be necessary for the decarbonization route to continue, and even more so because of all the problems we’re seeing: more frequent droughts, sporadic rains, cultivated areas that have deteriorated, coastal sites that will progressively lose their modus vivendi, etc. It’s a process that doesn’t happen overnight, but in the medium and long term there is no doubt that the responsible and strategic action is to move towards a low-carbon future.
BNamericas: Several countries in Latin America have made important gestures to advance the development of the green hydrogen sector. In other regions of the world, especially Asia and Australia, gigantic-scale projects are already moving forward. Is our region behind in this matter?
Beltrán: Without a doubt, it’s very positive to observe these roadmaps that the different countries are drawing up. Chile was the first, then came Colombia, now Panama. Countries are starting to adjust and there’s an acceleration of public policy to take advantage of this opportunity.
The oil and gas (“O&G”) sector has been one of the most discussed in Petro’s presidential campaigns.
Petro’s proposals generate concern among traditional energy operators; however, they also potentially provide opportunities for renewable energy projects. Petro has promised to promote alternative energy options to meet the country’s energy demand. 16 According to Colombia’s Energy and Planning Unit (Unidad de Planeación Minero Energética – “UPME”), Colombia’s demand for energy from 2021 to 2035 is expected to increase at an annual growth rate of between 2.28% and 2.68%, 17 indicating that Petro would have to push his energy transition agenda to meet the country’s demands. Considering that one of the priorities in his agenda is to lead the alternative energy industry in Colombia, this is a sector with important business opportunities in the next four years.
That’s the hope.. everyday we get a little closer. Keep the faith longs!!
“He [Petro] described a growing role for renewables, decreasing reliance on fossil fuels and greater protection of forests from the advance of big agriculture, but he still called for wider use of natural gas during the energy transition.”
Thanks for your opinion, I guess we will see who is right..
Totally agree BBall, our faith and patience will be rewarded. Better days coming to an ihub board near you!
Amen to that
Ecopetrol in 'constructive' talks with Petro officials
Colombian state-run oil company Ecopetrol is in "constructive talks" with the incoming administration of president-elect Gustavo Petro as the local industry braces for plans to accelerate the country's clean energy shift.
Petro, who will become Colombia's first left-wing leader when he is sworn in on August 7, has vowed to stop issuing licenses for fossil fuel exploration as part of an economic overhaul that prioritizes investments in agriculture, manufacturing and renewable energy.
In a quarterly earnings call, Ecopetrol CEO Felipe Bayón moved to allay fears of impending turbulence at the company, which is responsible for more than 60% of Colombia's oil and gas production.
"We've had very detailed conversations that have gone all the way from long-term strategy to current performance," Bayón told investors.
One of the key topics of discussion, according to Bayón, has been Ecopetrol's plans for fracking, or hydraulic fracking. Petro pledged to ban the practice during the election campaign, but Bayón suggested that a decision might not yet be a fait accompli.
The Bogotá-based company and partner ExxonMobil are currently preparing to jointly frack the Kalé and Platero unconventional pilots in Santander department. The companies have already obtained an environmental license for Kalé and have reached an advanced stage in the Platero permitting process.
"There was an in-depth conversation about fracking," Bayón said, adding that the company presented information from its experience in the US Permian basin, where it holds E&P contracts for unconventional acreage alongside partner Occidental Petroleum.
“We were able to share with [the new administration] information from 2.5 years regarding the performance of wells, reserves, water management, costs. We talked about the fracking pilots,” he said.
"It's a very sensitive topic for the incoming government. We fully acknowledge that. Ecopetrol will continue to be respectful and abide by the legislation and regulatory frameworks that are in force. Conversations are ongoing. [Incoming officials] have asked for more details and we will continue to provide them. The discussions have been very respectful, very constructive."
Bayón stressed the importance of natural gas in the company's long-term strategy, less than a week after Ecopetrol announced plans for small-scale LNG imports via the Pacific port of Buenaventura.
"We discussed the need for Ecopetrol to continue to provide gas to industries, citizens and transport," Bayón said. "Around 60% of the opportunities that we have identified are around gas. The government recognizes that being able to supply gas and oil for our refineries is fundamental going forward."
He added that Ecopetrol executives and Petro's energy staff had also discussed plans for hydrogen, renewable energy and carbon capture, among other topics.
Appreciate the articles EB..it’s all we have at this point, info related to Colombia’s politics and what is happening in the energy sector..All pieces of a puzzle that we are trying to put together. When corporate reveals the final picture this board will be singing a different tune. That continues to be my opinion and hope. Until then, Keep the faith longs.
Interesting info, lots of opportunity in Latin America. With Petro taking over soon, it will be exciting to see how it unfolds. Keep the faith longs.
Natural gas gains status as global green energy
Bogotá, July 2022. After the recent ratification by the European Parliament of giving natural gas the category of green energy source in the list of environmentally sustainable economic activities, known as "EU Taxonomy", this energy source is confirmed as the best ally of the planet and of our country to successfully advance towards the Energy Transition and carbon neutrality.
This thanks to its high availability and important environmental benefits translated into reductions of up to 99 percent of fine particulate matter (PM2.5) and sulfur oxides, a 70 percent reduction in nitrogen dioxides; and, at the level of climate change, its combustion represents reductions of between 30 percent and 50 percent of carbon dioxide compared to other fuels (fuel oil, coal, firewood, gasoline and diesel).
In the vote of the European Parliament, in which more than 600 deputies representing 27 Member States of the European Union participated, it was decided to give the green label to the gas industry with a worldwide impact.
The euro parliament considered natural gas as a CO2-free energy source, crucial to achieve the carbon neutrality objectives, agreed at COP26, which Colombia also signed in 2021
From the Colombian Association of Natural Gas (Naturgas), they celebrate this statement that confirms the sustainability of natural gas and will guide future investments for the energy transition.
In this regard, its president, Luz Stella Murgas, pointed out: “This resolution represents a milestone for our industry, which will make it easier for us to multiply our efforts throughout the world to reduce our carbon footprint and achieve global commitments towards carbon neutrality in 2050, strengthening the sustainable production of this clean energy, capable of providing a better quality of life in cities for current and future generations.”
Thanks to this decision, natural gas, hydrogen, among other renewable energies, will help reduce greenhouse gas emotions…
This one is not close to being done..Just getting started here. Let’s Go!!
Gustavo Petro takes over as President on August 7th..maybe we will hear something not long after on status of project and trading? Whenever we do get an update though, I’m betting we will all be very pleased. Jmho
Keeping the faith and holding out hope that good things are in the works!
Relax RC, I was only referring to the next Colombian presidents agenda and how it relates to this project. Good luck longs.
Totally agree, clean energy needs a strong transition plan and the incoming president can’t just stop fossil fuels all together..
Interesting find! Middle East sees the potential in Colombia.
Looking forward to the day when we are trading again…keep the faith because
THIS IS A REAL COMPANY.
Good read.. bodes well for IAHL projects under the incoming President in Colombia.
Natural gas gains status as global green energy source
Bnamericas
Published: Thursday, July 07, 2022
Natural Gas Generation
Bogotá, July 2022. After the recent ratification by the European Parliament of giving natural gas the category of green energy source in the list of environmentally sustainable economic activities, known as "EU Taxonomy", this energy source is confirmed as the best ally of the planet and of our country to successfully advance towards the Energy Transition and carbon neutrality.
This thanks to its high availability and important environmental benefits translated into reductions of up to 99 percent of fine particulate matter (PM2.5) and sulfur oxides, a 70 percent reduction in nitrogen dioxides; and, at the level of climate change, its combustion represents reductions of between 30 percent and 50 percent of carbon dioxide compared to other fuels (fuel oil, coal, firewood, gasoline and diesel).
In the vote of the European Parliament, in which more than 600 deputies representing 27 Member States of the European Union participated, it was decided to give the green label to the gas industry with a worldwide impact.
The euro parliament considered natural gas as a CO2-free energy source, crucial to achieve the carbon neutrality objectives, agreed at COP26, which Colombia also signed in 2021
From the Colombian Association of Natural Gas (Naturgas), they celebrate this statement that confirms the sustainability of natural gas and will guide future investments for the energy transition.
In this regard, its president, Luz Stella Murgas, pointed out: “This resolution represents a milestone for our industry, which will make it easier for us to multiply our efforts throughout the world to reduce our carbon footprint and achieve global commitments towards carbon neutrality in 2050, strengthening the sustainable production of this clean energy, capable of providing a better quality of life in cities for current and future generations.”
Thanks to this decision, natural gas, hydrogen, among other renewable energies, will help reduce greenhouse gas emotions…