2015 has not been kind to Colombia's oil industry

On Wednesday, Colombian state-owned oil company Ecopetrol announced its results for the first quarter of 2015, and they are not promising. Even though the company’s production increased slightly, Ecopetrol’s net profits fell by 91.2% in comparison with the same period in 2014. El Espectador attributed the steady rise in the company’s production to the decrease in attacks against Colombian oil infrastructure, which fell from 35 to 2 and allowed for a 6% increase in the volume of oil transported by the country’s pipeline network.

The sobering news of Ecopetrol’s earnings report was accompanied by the Colombian Petroleum Association’s announcement that exploratory drilling in the country fell by 82.6% in the first quarter of 2015 over the same period in 2014, from 52 exploratory wells to just 9. Francisco Lloreda, the president of the Association, added that exploratory wells to find new oil fields fell by 92%, meaning that it this activity has essentially ground to a halt.

Nonetheless, Bloomberg reported on Tuesday that, according to the Colombian Minister for Mines and Energy, Royal Dutch Shell and ExxonMobil Corp. will start development on two shale oil projects in the country this year. Minister Tomás González said, “What we’re seeing in the shale area is that the prospectivity is interesting enough for some of the companies to go forward. I would expect at least three or four blocks will move forward. I hope at least two of these blocks move this year.” He added that the Colombian government is waiting on the oil companies to submit their environmental impact assessment studies.

This at least is some welcome news to Colombia’s industry, which has been counting on the country’s shale oil potential to boost the country’s proven oil reserves from their dangerously low level of just 8 years’ worth of oil.