Page 4 - LatAmOil Week 28

LatAmOil COMMENTARY LatAmOil
Colombia: Progress report
The country has shown some signs of progress on the oil and gas front since President Ivan Duque took of ce nearly a year ago
WHAT:
Duque came into power after pledging support for the oil and gas industry.
WHY:
Colombia has succeeded in issuing a new map of potential hydrocarbon deposits and in success- fully concluding its rst bidding round.
WHAT NEXT:
The reform process is likely to be slow, owing
to persistent wrangling over policy priorities, but the country should see production climb back up to 1mn bpd by the middle of the next decade.
THE top two candidates in Colombia’s last pres- idential election, Ivan Duque of the Democratic Centre Party and Gustavo Petro of the Humane Colombia Party, took di erent approaches to the question of how best to govern the country’s hydrocarbon reserves.
Duque, in keeping with his position as the head of a right-of-centre party, was generally supportive of crude oil and natural gas devel- opment. He pledged to enact market-oriented reforms in the sector and said he wanted to push crude oil output back up from 800,000 barrels per day (bpd) to 1mn bpd. Petro, meanwhile, was far more critical of the oil and gas industry, saying he would rather see the Colombian gov- ernment back renewable energy and agricul- tural initiatives.
In the end, Duque’s message gained more traction among Colombian voters. e Demo- cratic Centre candidate was declared the winner of the election a er the second round of voting on June 17, 2018. He then took o ce on August 7, 2018.
At the time, industry observers were hopeful that the new president would be able to move quickly on the oil and gas front. Unfortunately, he was unable to do so. Instead, he spent his rst few months of his presidency striving to consol- idate his hold on power and to identify his top political priorities. As a result, his government did not take much in the way of decisive action until December, when it took a definite step forward.
Positive developments
On December 17, Colombia’s national hydro- carbons agency, known by its Spanish acronym ANH, published a new map of 20 potentially hydrocarbon-bearing areas for which large amounts of social, economic and geographical data are available. It also cleared the way for the launch of the country’s rst bidding round.
These were positive developments, as they took place a er two years of waiting and repeated delays. ey signalled that Duque was ready to make good on his pledges of support by giving private oil and gas operators access to potential reserves.
Additionally, they indicated that the pres- ident understood the dilemmas facing the national oil company (NOC) Ecopetrol, which has little hope of boosting production unless it expands its reserves.
ANH had addressed Ecopetrol’s need to replace its dwindling reserves earlier in Decem- ber, with the publication of its New Horizon strategy document. New Horizon identi ed four main priorities for the Colombian hydrocarbon industry: promoting exploration, encouraging investment in primary recovery and enhanced recovery at sites with high potential, improving the management of information and making the country more competitive.
ese e orts do appear to have had some positive impact. They helped stir interest in Colombia’s rst bidding round, which recently came to a successful conclusion..
Duque spent the “ rst few months
of his presidency striving to consolidate his hold on power and to identify his top political priorities
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thehoya.com
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w w w . N E W S B A S E . c o m Week 28 17•July•2019