The trials and tribulations of the Colombian oil industry

By now, we should all know that the Colombian oil industry is in trouble. Just how much trouble, and what the Colombian government should do about it, has been hotly debated by experts, observers, and the stakeholders involved. Francisco Lloreda, president of the Colombian Petroleum Association (ACP), has been very clear regarding his position: he believes that the Colombian government needs to everything it can to keep oil companies happy. For example, speeding up the environmental licensing process, sending more soldiers to protect the country’s oil pipelines, the development of free trade zones for oil companies, and for the Colombian politicians to embrace the possibilities of fracking. La Republica columnist Alberto Bernal-León summed up the pro-oil arguments: “Without oil there is no education, health, roads, and most importantly, no post conflict. It’s really incredible that Colombians can not grasp such a ridiculously simple concept.”

El Tiempo reported that the ACP also warned that, although it projects Colombian oil production to average 1,020,000 barrels per day in 2015, this calculation assumes that oil production in the country encounters no unusual problems such as protests and attacks on infrastructure.

The Colombian oil industry did get a little bit of good news over the weekend. The Colombian National Authority for Environmental Licensees issued the Turkish Petroleum International Company a license for its exploration project in the Norte de Santander department. Considering that most of the news up to this point has centered on companies cancelling exploration activities, this is a welcome development.

In addition, the Colombian National Hydrocarbons Agency (ANH), together with THX Energy, drilled the deepest well over in Colombia, reaching a depth of 20,000 feet. Carlos Arturo Espinosa, the president of THX Energy, told reporters, “This project will allow the government to redesign the geological map in the northern part of the country, which will make it the most important for 2014 and 2015. This is the first time that such deep activities have been undertaken in a stratified field, so detailed research and studies can be made in search of new hydrocarbon resources.”