Colombia's Energy Industry

Colombia: Oil and Gas Industry Reactivation

Colombia’s oil and gas industry is a critical part of the country’s economy, representing over 10% of national earnings and around 35% of foreign investment despite dwindling reserves. The Andean nation is Latin America’s third-largest oil producer after Brazil and Mexico, with most of its resources bound for export. The industry is overseen by the National Hydrocarbons Agency (ANH), which hands out PSCs and enforces state policies.

To recover its falling reserves, the ANH is focused on organising bid rounds and attracting interest in exploration activities. The state entity set out a roadmap that includes awarding 200 blocks and drilling 800 wells between 2021 and 2040 with the aim of improving reserves by 150% and making the nation self-sufficient in meeting its hydrocarbons demand. While much of Colombia’s oil and gas resource wealth is hidden in deep offshore regions or in previously inaccessible parts of the hinterland, modern technology and techniques have made E&P activities plausible.

Another source of opportunities lies within the country’s logistics sector. Due to the lack of developed oil and gas infrastructure, investment in hydrocarbons-related transportation is required. Colombian pipelines are congested, and the state is actively working on easing red tape to attract international partners to build new assets.

“We want to position Colombia as the main destination for investments in the energy sector in the entire region,” Colombian President Iván Duque told The Energy Year. “For this, we have important fiscal incentives for the hydrocarbons sector and for the alternative energy sector.”