Colombia Aims to Boost Oil Production to 1 Million Bpd

Despite a bold climate stance, Colombia is looking to increase its oil production to 1 million barrels per day by encouraging drillers to ramp up activity in underutilized exploration blocks, according to the country's energy ministry.

Energy Minister Andrés Camacho emphasized the government's strategy to revitalize "lazy contracts"—agreements signed 10 to 15 years ago that have so far seen minimal exploration efforts. Camacho believes this approach can elevate production to approximately 800,000 bpd by year-end, a rise from the Q1 average of 774,000 bpd.

Colombian President Gustavo Petro has made bold commitments to combat climate change by halting new drilling licenses in country and moving away from oil and gas in favor of green alternatives—a stance that would seem in opposition to the push to eke out oil from existing contracts.

But according to Camacho, "Increasing the number of contracts does not necessarily lead to more exploration," Camacho stated in Bogotá, highlighting the policy to boost exploration within current agreements. Nevertheless, if successful, it will lead to more output for the country that already has oil and coal accounting for half of its total exports.

The National Hydrocarbons Agency has implemented stringent requirements for contract compliance to prevent companies from signing contracts just to resell them at higher prices without conducting any actual exploration—a practice that could stifle future oil production.

State oil company Ecopetrol SA is contributing to the output increase through enhanced oil recovery techniques, improving extraction volumes from reservoirs. Colombia's current oil recovery rate averages 27 percent, according to Camacho.

The National Hydrocarbons Agency vowed to release a report today on the country's oil and gas reserves, noting that as of the end of 2022, proven oil reserves stood at the equivalent of 7.5 years and natural gas reserves at 7.2 years.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Why Kinder Morgan is Targeting This Texas Oil Field
• EIA Confirms Small Crude Inventory Build, Gasoline Draw
• Gasoline Prices Ahead of Memorial Day Are 1% Higher Than a Year Ago