Page 4 - LatAmOil Week 22 2021

LatAmOil COMMENTARY LatAmOil

(Photo: Colombia Informa)

Protests pose obstacles for

Colombia’s oil and gas sector

As production levels continue to slip, Ecopetrol may have to rethink its performance targets

CONDITIONS in Colombia’s hydrocarbon had said in mid-May that its output levels were
sector have continued to deteriorate over the down by about 12,000-15,000 boepd, marking
WHAT: last few weeks. The wave of protests that began a 38-48% drop on the first-quarter average of
Ecopetrol says its output sweeping the country in late April has not 31,455 boepd. Then on June 1, it noted in a state-
is now at 651,000 boepd. abated, and consequently some oil and gas pro- ment that its net production curtailments had
ducers are still seeing output levels fall. dropped to 4,000-5,000 boepd, which is 13-16%
WHY: The national oil company (NOC) Ecopetrol below the first-quarter figure.
Civil unrest has become appears to be one of those affected. Ecopetrol Furthermore, Ecopetrol has indicated pub-
so widespread that the went from saying on May 27 that development licly that it does not expect the demonstrations
government has limited work was continuing normally at the fields that and unrest to affect its overall performance in
options for resolving road account for most of its production to reporting 2021. In its May 25 statement, it said: “As of the
blockages. on May 25 that its yields had averaged 651,000 date of this release, Ecopetrol currently esti-
barrels of oil equivalent per day (boepd) in the mates that these adverse consequences should
WHAT NEXT: month to date. It did not provide any compar- not have a material impact on Ecopetrol’s ability
Ecopetrol has not ative data on its performance in April, but its to fulfil its business plan targets for 2021.”
adjusted its forecast for statement appears to be in line with Colombian Nevertheless, the NOC is also not ruling out
2021 but may have to do
so soon. Energy Minister Diego Mesa’s announcement the possibility of problems. “Ecopetrol cannot
in the middle of last month that oil output had offer any assurance as to when the social unrest
dropped below 700,000 barrels per day (bpd) for will end and whether it will not continue to have
the first time in more than 10 years. a negative impact on its operations,” it said in the
But the news is not all bad. GeoPark (Canada) statement.

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