Colombia's oil patch so far this year has seen zero onshore seismic exploration, a sign of the disinterest oil companies have for the country's prospects and inaction that should also spur the government to improve exploration and production terms, a prominent trade group said Wednesday.
Colombian Petroleum Association head Francisco Lloreda also told reporters in Bogota that only eight exploratory wells were drilled over the first five months of 2016, down from last year's 27 for the full year and well off the record pace set in 2012 when 131 were drilled.
Lloreda called a press conference to argue for improved terms for E&P companies, saying Colombia's decades-long oil independence was at risk. The country's relatively high taxes and royalties, added to security problems and difficult terrain, have pushed many wildcatters out from Colombia, he said.
Colombia has seen oil field investment drop for the last three years running and unless a reversal is achieved, national production could fall 15% per year later this decade, Lloreda warned. Colombia could lose its oil self-sufficiency as early as 2022, he added.
This year's goose egg in onshore seismic exploration compares with 2,200 square kilometers explored last year and 20,000 square km in 2010, a record year.
The press conference follows last week's announcement by Colombia's energy ministry that the country's proven reserves as of December 31 fell to 2 billion barrels, down from 2.308 billion barrels at the end of 2014, a 13% decline. The drop follows a 5.6% decline reported at the end of 2014.
"The fall in reserves is serious," Lloreda said. "Last year, proven reserves grew by 87 million barrels, but 366 million barrels were produced in Colombia, which to say, we are not recovering the barrels we consume."
The mining and energy ministry also reported last week that Colombia's average crude production during April fell to 914,000 b/d, a 10.8% drop from the 1,025,000 b/d averaged in the same month last year.
State-controlled Ecopetrol announced earlier this year it was shutting in production at all fields that weren't producing positive cash flow.
The producers association, known by its Spanish initials ACP, is predicting that 2016 production will decline to 940,000 b/d, off 6.5% from the 1,005,400 b/d averaged for all of 2015.
Production is bound to drop, Lloreda said, when one considers the corresponding drop in development wells which last year totaled 710 wells drilled, down from 940 in 2014 and 1,019 in the record year of 2012.
The ACP projects only $640 million in total exploration investment by oil companies this year, down from $720 million last year and $1.45 billion in 2014.
Better terms for E&P are necessary for Colombia to attract the $7 billion in total annual oil patch investment that that some analysts estimate it needs simply to maintain production at current levels. But total investment this year has been projected by the ACP at roughly $3.6 billion, down from $4.8 billion last year.
