Replies to post #48453 on IAHL Corporation (IAHL)

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Natural Gas Shortages In Colombia: Is An Energy Crisis Imminent?

Colombia's leftist president, Gustavo Petro, plans to end contracting for hydrocarbon exploration.
The plan has raised concerns about risks to the country's petroleum-dependent economy and energy security.
Natural gas shortages could trigger an energy crisis if Colombia proceeds with the plan to cease issuing new oil exploration contracts.
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The strife-torn Latin American nation of Colombia is facing considerable uncertainty after the first leftist president in the country’s modern history Gustavo Petro embarked upon a plan to end contracting for hydrocarbon exploration. Industry tax hikes have already ratcheted-up the level of fear and there are significant concerns Petro’s plan will not only shock Colombia’s petroleum-dependent economy but endanger the Andean country’s energy security and even spark a crisis. It is an ever-growing shortage of natural gas which will be the most likely trigger of an energy crisis, with declining domestic supply and rising demand already having forced Colombia to significantly increase liquified petroleum gas imports. The risks of such a crisis emerging are very real if Petro proceeds with his plan to cease issuing new oil exploration contracts.

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.