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Can Colombia Replicate Brazil’s Offshore Oil Boom

While offshore Brazil, Guyana and to a lesser extent Suriname are gaining the lion’s share of attention when it comes to South American offshore oil, with opportunities opening-up in Colombia. The Andean country’s Caribbean coast is believed to hold considerable oil and natural gas potential. It was with much fanfare that Diego Mesa, Colombia’s Minister of Mines and Energy, announced the reactivation of offshore activity in Colombia at the start of October 2020. This is an important development for a country, which despite being dependent on oil to drive economic growth, has limited proven reserves of just over 2 billion barrels with a disturbingly short production life of 6 years. Falling investment because of weak oil prices, a lack of onshore petroleum discoveries since 2009 and deteriorating domestic security are weighing heavily on plans to boost onshore oil reserves and production. Attempts by the central government in Bogota to commence unconventional hydrocarbon production through the introduction of hydraulic fracturing to boost onshore oil reserves and production have been stymied by Colombia’s courts. In fact, a lack of major hydrocarbon discoveries, rapidly depleting mature natural gas fields and a marked uptick in demand for natural gas forced Colombia to commence sustained liquified natural gas imports in 2017. Colombia’s government and the peak industry body the Colombian Petroleum Association (ACP – Spanish initials) believe the Andean country’s tremendous offshore hydrocarbon potential is key to securing Colombia’s energy security. The Andean country has 4 recognized hydrocarbon basins along its Caribbean coast, the Cayos, Colombia, Guajira and Sinú offshore basins.

There are a wide range of estimates regarding the volume of hydrocarbons to be recovered from Colombia’s offshore Caribbean basins, This makes it difficult to quantify the full petroleum potential but it is believed that those 4 basins alone could hold up to 32 billion barrels of oil equivalent, which is 16-times greater than Colombia’s 2 billion barrels of proven oil reserves. Those numbers underscore how the successful exploration and exploitation of Colombia’s offshore Caribbean basins would be a game changer for the petroleum dependent Andean country. Read from source….