Crude exports out of Colombia in recent years have averaged just over 600,000 barrels per day, with exports typically highest in January, before gradually descending through the year. To start this year, however, export volumes have dropped off considerably, as unrest rises up in the country once more.
Exports are currently at 540,000 bpd so far this month, considerably adrift of year-ago levels:
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The drop in exports comes amid the end of a temporary ceasefire between the Colombian government and the National Liberation Army (ELN), which expired last Tuesday (January 9) after 101 days. A number of attacks on energy infrastructure across the country have subsequently followed, as well as kidnapping.
We have issued a number of impact alerts to our clients in the last week highlighting the most pertinent events. The Caño Limón – Coveñas pipeline experienced multiple attacks on January 10. The Caño Limón – Coveñas pipeline runs from the Caño Limón oil field to the port of Coveñas, where the vast majority of Colombian crude exports leave the country. Two days later, the Colombian army foiled an attempted bomb attack on electricity towers in northwestern Colombia.
On January 13, Ecopetrol stopped pumping on its Transandino pipeline following a bomb attack on the pipeline in Nariño, Colombia. The pipeline moves crude from the Orito field in the Putumayo basin to the port of Tumaco.
As the chart below illustrates, exports leave from both Coveñas and Tumaco - but overwhelmingly from the former. There are two predominant export grades: heavy sour Castilla blend accounts for a half of all export volumes, while medium sour Vasconia accounts for 40 percent. Related: Is The Rig Count Still Relevant?
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Despite the immediate increase in unrest, crude flows in and out of Colombia are continuing for the most part. Not only is the U.S. the leading destination for Colombian crude exports, but the U.S. is the leading source of crude flows into Colombia.
Colombia is one of the top ten leading destinations for U.S. crude, discharging an average of 22,000 bpd of U.S. crude last year (approximately one cargo a month), with light sour Thunderhorse being the crude of choice. Ecopetrol's Manomal refinery has already received one cargo of US crude this month, while a second cargo was loaded on January 10th at PAA's St James terminal, set to be delivered in the coming days.
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By Matt Smith
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