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What are the current risks of depending on other countries regarding gas and oil provision?

Exploring opportunities for Colombia's energy security

Approximately time lecture: 

5 minutes

By:

Jose Miguel De Armas 
CEO & Founder Hedap Global Energy Management​

What are the current risks of depending on other countries regarding gas and oil provision?

Energy security crisis heading our way.
 

Political agendas may cause countries to lose their grip on economic objectivity and enhance risky policy management. Colombia is currently experiencing mismanagement, to the point of depending on neighboring countries for its energy security.

 

Since August 7, 2022, Colombia has neglected the exploration of new gas and oil fields in its sovereign territory, leading to a steady decline in long-term supply for national consumption. The current government has stopped the signature of new exploration contracts, contributing to a rapid decline in potential new reserves of gas and oil all around the country for the near and long-term future.

 

We are currently engaging Colombia toward an energy security failure in the medium and long term by relying on imports, especially from Venezuela. As the president of Ecopetrol announced, we are heading toward direct dependency on gas imports starting in 2025. In addition, the current plan for other alternatives remains risky. As stated in Bnamericas during an interview with Manuel Tenorio, the current chairman of Andes Energy, when he was asked if Colombia will be importing LNG via the Pacific coast, Tenorio said, 'It's needed because Ecopetrol already recognized that starting next year there will be a gas deficit in Colombia.' Andes Energy is developing a new regasification terminal and an associated thermoelectric plant in Buenaventura, on Colombia's Pacific coast, as stated in Bnamericas.

More alarming, we cannot deny that Colombia has the potential for significant gas reserves in several places around the country. If enabled properly, these reserves could provide us with a completely different forecast for the future. However, as stated before, the government has no interest in securing Colombia's energy supply for the future.

 

Before 2026, what shall we do?
 

Are new oil and gas leads and prospects in onshore areas identified in current exploration and production contracts or in prospective areas where new agreements could be signed soon?
 

Colombia is undoubtedly working on the global energy transition by optimizing its consumption of fossil fuels and implementing the use of renewable sources. However, the latter (renewable sources) are taking longer than expected due to technical, legal, social, and financial limitations.

Prospective areas onshore in the lower and middle Magdalena Valley, Llanos, and Putumayo basins should be first priorities, while offshore discoveries such as Gorgon, Uchuva, and Orca sites should be considered long-term projects. Juan Pablo Ramos, a formal BP geologist, stated this in GeoExPro, where he discussed the potential of these areas.

New exploration activities in already signed exploration and production contracts in onshore areas (near field cases) should be promoted to keep current investors active and attract new ones. The hope is that the signature of new exploration and production contracts will likely occur under new government measures in 2026.
 

A national responsibility
 

Colombia’s energy policy must remain objective and should not sponsor any political agenda to prevent potential risks such as industrial and cost of living affectations. We can take an example of the most recent crisis regarding energy sovereignty, which is the dependency of the European Union and specifically Germany on Russian gas, to the point that Germany almost entered a recession in 2023 and most likely will continue this tendency for 2024. A potential scenario, as stated in Reuters, ‘’This weak performance has raised questions about the sustainability of the German economic model and critics argue that much of its energy-reliant heavy industry is now being priced out of international markets, warranting an economic transformation.’’ (Bloomberg, 2024).

As the country works on the transition, it must focus on securing its energy sovereignty for the short, medium, and long term. This will allow us to be better prepared for any potential crisis and enable an objective course of action in our economy. 
 

HEDAP Global Group will continue to work for the country and meet its trouble-solving quests throughout our divisions as a group.

Coming soon is our Colombia Vision 2050.

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