Oil and natural gas production in Colombia fell
again year-over-year last month. Oil production dropped from 1 million bpd one
year ago to just 980,000 bpd last month. Mauricio de la Mora, director of the
National Hydrocarbons Agency of Colombia, explained
that the decline was due to social conflicts and maintenance work on the
country’s pipeline network.
The Colombian government has been pressuring the country’s
oil industry to keep oil production as high as possible in order to maximize
revenue from oil sales at a time of depressed oil prices. However, Colombia’s
reserves are dwindling, and production will naturally continue to decline
steadily unless investment in exploration adds additional barrels to country’s
proven oil reserves.
Investment in in the oil industry however has fallen
by $730 million over its already-depressed 2014 levels to just $1.83 billion
dollars in investment in 2015. Francisco Lloreda, president of the Colombian
Petroleum Association, warned that investment in exploration would stay low in
2016.
There however was some positive news for the Colombian oil
industry: ConocoPhillips announced
that it was seeking approval to frack an oil block that had been previously
operated by Shell. If Conoco wins approval, it would be one of Colombia’s first
fracking permits.
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