Colombia hits February oil production target

The Colombian oil sector’s great fear is that the dual threats of depressed oil prices and dwindling reserves will lead to decreased production, starting as early as this year. The good news for Colombia is that oil production in the country does not appear to be slowing down any time soon. According to the Colombian Ministry of Mines and Energy, oil production in the country for the month of February averaged 1,027,000 barrels of oil per day, approximately the same average as January.

February is the fifth straight month with average oil production above one million barrels per day. According to Tomás González, the minister of mines and energy, “The country requires a production of more than one million barrels per day to give visibility to social projects and to remain competitive. It is clear that Colombia needs the energy sector to finance programs for peace, equality, and education, and the National Government and industry are responding such that these programs can become reality.”

Despite this good news, Bloomberg reported that the collapse in global oil prices is threatening Colombia’s nascent ethanol industry. The country’s biofuels federation, Fedebiocombustibles, told Bloomberg that investors are wary right now of investing in the Colombian biofuels industry, but now is actually the perfect time. Fedebiocombustibles president Jorge Bendeck said, “But in our view this is exactly when you should make the investments. They’ll be cheaper.” The report noted that even the Colombian state oil company Ecopetrol plans to cut its investments in biofuels, so it is unclear what the future may bring for this Colombian industry.

Bloomberg also published a second report on the devaluation of the Colombian peso. For months, the collapse of the Colombian currency mirrored the collapse in global oil prices. However, the recent stabilization in oil prices has brought no relief to the peso: it fell another 1% on Monday to its lowest level in 6 years, more than 2,600 pesos to the dollar. Though this will be a boon to Colombian industry, it is a big concern to foreign investors eyeing an investment in Colombia.