Colombia narrowly meets 2015 oil production goal

OREANDA-NEWS. January 18, 2016. Colombia's crude production topped 1mn b/d in 2015, narrowly beating a government target amid a decline in upstream investment, an absence of big new discoveries and festering issues of security and community unrest.

Oil output in 2015 averaged 1.005mn b/d, up by 1.8pc from 988,100 b/d the year before, according to preliminary energy ministry data.

The finance ministry revised down its 2015 crude production target to 1mn b/d in June 2015 from an original projection issued in June 2014 of 1.029mn b/d, mainly in response to tumbling oil prices.

December crude production averaged 993,800 b/d, up by 0.5pc from the previous month.

Colombia produced 1.03bn ft3/d (28.84mn m3/d) of natural gas in 2015, down by 6.9pc from 1.1bn ft3/d in 2014, mainly reflecting declines at the Chevron-operated Guajira fields.

Colombia produced 1.035bn ft3/d in December, flat with November.

The government is scrambling to sustain upstream investment and increase gas supply to meet higher demand tied to a drought triggered by the Pacific-warming trend El Ni?o.

The government has eased contract conditions with a particular eye toward unconventional and offshore prospects.

Hydrocarbons agency ANH last month issued another set of draft proposals that introduce more upstream flexibility, including the definition of exploration commitments in terms of activity rather than in monetary value. The agency is receiving industry comment through 31 January.

The ANH reported 2.3bn bl of crude reserves at the end of 2014, with a reserves-to-production ratio of 6.4 years. There no major oil discoveries in 2015.

Colombia's oil chamber ACP says Colombia?s corporate tax regime has undermined the country?s upstream competitiveness.

Oil investment shrank by around 28pc in 2015, and around 74pc of the chamber's affiliates reduced capital expenditures last year, according to the ACP.

Chronic issues related to security, community opposition to oil development, and environmental licensing delays are also alienating investors.

Colombia main rebel group Farc, which has been engaged in peace talks with the government since late 2012, has said a peace deal scheduled to be signed by 23 March could be delayed because of outstanding issues, in a further setback for president Juan Manuel Santos.

Progress in the talks led to a ceasefire last year, ending most attacks on infrastructure such as crude pipelines.