To help mitigate emergencies, Colombia should look to domestic assets such as the Cupiagua, Cupiagua South and Cusiana associated gas fields. Despite their advancing field life, an increase in the gas-to-oil ratio (GOR) presents an opportunity. Employing thorough analyses incorporating porosity, permeability, trap type, reservoir temperature and pressure, we have analyzed and identified fields for medium-term GOR advancement, which could enhance domestic gas production in Colombia.

Colombia is expected to face challenges in the latter half of this decade due to a decline in natural gas production from mature onshore fields. Average gas demand over the past six years is around 960 million cubic feet per day (MMcfd), slightly below domestic gas output of 1,050 MMcfd. There are also no substantial commercial gas agreements in place through the latter part of the decade. Colombia must adopt a strategic approach in the coming years to address both domestic demand and depleting reserves, as highlighted in Figure 1 below.

Approximately 85% of Colombia's gas production is derived from three primary onshore provinces: Llanos; Lower Magdalena; and Middle Magdalena Valley. Most of these fields are mature and the reserves are diminishing steadily, experiencing a decline rate of between 5% and 11%. Recent deepwater discoveries include Gorgon, Uchuva and Glaucus. These are anticipated to start producing after 2030 and are expected to reach levels that could eventually lead to an increase in overall contry-level supply.

What could happen in the next two years?

Within the next two years, the country's sole recourse to fulfilling demand – should it indeed increase – is to utilize the existing SPEC LNG facility in Cartagena, which can currently import 400 MMcfd and simultaneously increase regasification capacity. Promigas, the majority shareholder in the LNG terminal, intends to increase capacity by 130 MMcfd by the end of 2026. The next two years are also critical for the advancement of the Antonio Ricaurte gas pipeline connecting the country with Venezuela, as Colombia plans to import 25 MMcfd through this pipeline, necessitating substantial investments. The advantage of making this pipeline operational lies in a two-thirds reduction in transportation costs compared to reliance on the US for importing an equivalent volume of gas.

The geopolitics of Venezuela are inherently dynamic, influenced by the imposition or easing of sanctions by the US or others. This landscape is subject to fluctuations due to the outcomes of presidential elections set to be held this year in both the US and Venezuela. Colombia can benefit from regarding this pipeline as just one of numerous potential options instead of being solely reliant on the pipeline.

Certain fields in Colombia – such as Cupiagua, Cupiagua South and Cusiana in the Llanos Basin, where cumulative current natural gas output is around 350 MMcfd – have exhibited a notable shift in production dynamics in the past two decades. Initially characterized predominantly by oil production until 1999, following the exhaustion of 50% the fields’ reserves, the year-on-year decline rate in oil output is 19.5% (from 2000 to date), while at the same time the year-on-year natural gas production rate has increased by 6.5%. Various infrastructural and geological factors contributed to these changes and, considering all these factors, we evaluated analogous formations where similar fields can be found.

Issues with infrastructure and logistics have impeded progress of the Pacific LNG project, causing a setback in its scheduled launch. Colombia has affirmed its plan of transitioning away from fossil fuels by declaring a cessation of new oil and gas exploration contracts; however, key exploration and production companies in the nation, such as state-owned giant Ecopetrol and Parex Resources, have chosen to leverage existing contracts for the exploration and delineation of previously discovered volumes. This could help Colombia meet its natural gas demand.

Although Colombia is not currently facing an energy crisis, the country may need to take proactive steps to tackle potential future challenges in terms of natural gas. The long-term solution lies in relying on recent deepwater discoveries. Strategic preparations and investments aimed at guaranteeing resilience and stability in the event of possible future gas crises could prove a medium-term solution.

Authors: 

Vadranam Sai Krishna

Analyst, E&P Research
vadranam.krishna@rystadenergy.com

Masum Akter

Analyst, Upstream Research
masum.akter@rystadenergy.com

Rimal Bhat

Analyst, Upstream Research
ramal.bhat@rystadenergy.com

(The data and forecasts contained in this column are Rystad Energy’s and the opinions are of the authors.)