Colombia’s Oil Industry Eyes Comeback as $100 Incorrect Revives Funding Case

Matthew Smith

Matthew Smith is Oilprice.com’s Latin-The US correspondent. Matthew is a veteran investor and funding administration expert. He bought a Grasp of Legislation diploma and is currently located…

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• Colombia’s oil and gasoline production has fallen to multi-year lows because of regulatory changes, declining funding, and getting older fields.
• A sharp upward thrust in oil prices above $100 per barrel might perhaps presumably presumably restore profitability and attract renewed exploration and drilling activity.
• Structural challenges remain, including dwindling reserves, rising gasoline imports, and policy uncertainty impacting prolonged-timeframe vitality safety.

A shock oil designate spike, after U.S. airstrikes on Iran, which sees Brent procuring and selling at over $100 per barrel, is giving hope of a restoration for Colombia’s beleaguered oil patch. Hydrocarbon production in the battle-riven nation is at multi-year lows, with negative regulatory and tax reforms impacting funding in the economically extreme sector. Nonetheless, bigger oil prices and the probability of a change-friendly candidate profitable the 2026 presidential election supply a peep of hope for Colombia’s overwhelmed-down oil industry.

February 2026 records from the hydrocarbon regulator, the National Hydrocarbons Company (ANH), reveals Colombia lifted a median of 734,924 barrels per day. Right here’s the lowest amount of petroleum produced since April 2025, when 714,229 barrels per day had been extracted. That quantity is significantly decrease than the 1,029,798 barrels per day pumped all the intention in which by means of February 2015, when the Brent had plunged to under $60 per barrel. For over a decade, a succession of conservative governments in the capital, Bogota, considered oil production of 1 million barrels per day as key to fiscal balance.

Meanwhile, economically crucial pure gasoline output remained veteran. In February 2026, production hit a median of 695 million cubic feet of pure gasoline per day. This, despite being 1.8% bigger than a month prior, is a disturbing 15.7% decrease than a year earlier. Certainly, the Andean nation’s pure gasoline output is hovering across the lowest diploma in a long time. Right here’s very touching on because domestic question for the fossil gasoline is rising at a stable clip.

The ever-widening gap between pure gasoline provide and consumption is forcing Bogota to hasty ramp up costly liquified petroleum gasoline (LPG). Right here’s weighing heavily on an economy the save pure gasoline is a key gasoline for the agricultural and manufacturing sectors. Consequently, the quantity of LPG imported by Colombia continues to fly to recent highs, with estimates indicating that between 2022 and 2025, shipments grew tenfold. For the length of 2026, analysts are waiting for that a quarter of all pure gasoline consumed in Colombia might perhaps be imported.

The major drivers of this sharp decline are policies enacted by Colombia’s first leftist president, Gustavo Petro. The gentle leftist guerrilla, on assuming explain of enterprise in August 2022, introduced reforms aimed toward reducing the nation’s dependence on fossil fuels. These embody banning hydraulic fracturing (a controversial, heavily regulated extraction technique in Colombia), ceasing to award recent exploration licenses, and hiking taxes. These measures brought about in actuality intensive uncertainty, seeing many drillers gash upstream spending while others, particularly ExxonMobil, exited Colombia. 

Petro’s various reforms and fixed tax hikes for extractive industries, including the hydrocarbon sector, glean severely broken investor self belief, leading to a sharp decline in foreign vitality funding. These events are all responsible for a sharp decline in exploration activity. This locations Colombia’s vitality patch at risk thanks to the nation’s low proven hydrocarbon reserves, which glean a microscopic production lifestyles.

At the head of 2024, the Andean nation’s proven oil reserves totaled correct over 2 billion barrels, which is passable for any other seven years of production. Meanwhile, proven pure gasoline reserves amounted to correct over two trillion cubic feet with a production lifetime of 5.9 years. These numbers highlight the urgency required to spice up exploration activities to grasp hydrocarbon reserves to the point the save Colombia can have its spot as a gain vitality exporter.

The shortcoming of exploration success, with no world-class discoveries for the reason that Nineties, potential drillers are working getting older veteran wells, with most properly beyond height production. Which potential that, vitality companies are compelled to consume enhanced restoration ways to spice up reservoir stress and extract the final oil. This involves secondary restoration, the save in most cases water flood is worn to spice up reservoir stress and displace oil toward injection wells.

The undeniable fact that many of Colombia’s oilfields are veteran, properly and in actuality previous height production, potential tertiary oil restoration is required if commercially viable petroleum extraction is to be maintained. Certainly, it’s estimated that as worthy 80% of the Andean nation’s petroleum is made from veteran oilfields. Tertiary restoration is the save drillers inject gasoline, in total carbon dioxide or pure gasoline, into reservoirs to spice up stress and act as a solvent that improves oil motility, leading to severely bigger restoration charges.

Drillers in Colombia in most cases reinject the pure gasoline produced as a byproduct of oil extraction. Certainly, it’s estimated that round half of all associated pure gasoline produced is reinjected to spice up restoration charges. Right here’s sharply impacting the quantity of domestically produced pure gasoline, which is made on hand for industrial consumption. The deployment of enhanced restoration is costly, with it estimated that it provides up to $20 per barrel, however it if truth be told does magnify the restoration ingredient by up to twenty%.

The sharp spike in oil and pure gasoline prices currently being experienced thanks to the fallout from U.S. and Israeli strikes against Iran might perhaps presumably presumably simply correct be the catalyst required to force better funding in Colombia’s vitality patch. You peer, with Brent at round $100 per barrel oil industry operations in Colombia get cash despite the additional taxes and regulatory restrictions imposed by the Petro administration.

The typical industry-huge breakeven designate is estimated to be $30 to $50 per barrel, meaning that at $100 Brent, even after taking into consideration the exceptional tax expense imposed by Petro, operations are extraordinarily profitable. At that designate, drillers can easily grasp up the additional charges created by the usage of enhanced restoration ways equivalent to water flood and gasoline reinjection to pump petroleum from Colombia’s getting older oilfields. This would presumably presumably also be a boon for the Andean nation’s distressed hydrocarbon sector, riding better exploration and drilling activity across present contracts.

By Matthew Smith for Oilprice.com

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