Investment in Colombia’s oil and gas industry fell 49% to $2.05 billion last year, the lowest since 2016, with exploration investments sliding as the coronavirus pandemic slashed global fuel demand, the private producers association said.
Spending on exploration projects fell to $350 million in 2020 from $780 million in 2019. The total was 62% below estimates made at the start of last year, the Colombian Petroleum Association (ACP) said in a report.
Similarly, production investment dropped to $1.7 billion last year, down 48% versus 2019 and significantly below the forecast $4.05 billion, the ACP said.
“2020 was…an atypical year due to the fall in demand for hydrocarbons worldwide,” ACP President Francisco Lloreda said in a press conference.
Investment is expected to rise this year, the ACP said, although forecasts call for oil output to remain below pre-pandemic levels.
Oil production in Colombia during 2020 fell to 780,000 barrels per day (bpd) from 886,000 bpd in 2019, the ACP said.
While investment in production is expected to rise to between $2.6 billion and $2.9 billon this year, output is expected to reach between 765,000 and 780,000 bpd, the ACP said.
The discrepancy between rising investment but staid output will come as companies focus on sustaining current production levels and mitigating field decline in 2021, the association said.
Exploration investment in 2021 will range between $500 million and $550 million, the ACP said, above levels seen last year but below pre-pandemic sums. Around 45% of exploration investment will go towards exploring for gas, it added.
Some 40 to 45 onshore wells are expected to be drilled in the coming year, the association said. Though higher than the 18 wells drilled in 2020, the estimate represents just a third of yearly activity registered at the start of the last decade.
By Oliver Griffin;