Colombia’s key oil and gas industry has started to feel the impacts of nationwide protests that have dragged on for three weeks.
On Wednesday, Energy Minister Diego Mesa said overall oil production had dropped below the 700,000 b/d mark for the first time since 2009.
Several producers working the country have publicly announced adverse impacts.
Canadian independent Gran Tierra Energy Inc. this week said the protests “initially did not impact the Colombian operations of Gran Tierra and other energy companies. However, in the last few days, blockades of key roads have started to cause the temporary shut-in of some oil wells and oil fields throughout Colombia and are now affecting almost all energy companies in the country.”
Blockades are occurring in the oil-rich Llanos, Middle Magdalena and Putumayo basins. As of last Sunday (May 16), Gran Tierra had shut in about 5,250 b/d, with total output at around 24,350 b/d.
A strike committee composed of government officials and union representatives has been created to negotiate an end to the protests and the blockades. If it is successful “at negotiating an end to the blockades of key transportation routes, Gran Tierra expects to be able to restore the shut-in production in a matter of one to two weeks.”
Meanwhile, executives at Latin America-focused E&P GeoPark Ltd. said the protests were impacting “crude oil transportation, drilling, and the mobilization of equipment and personnel, causing GeoPark and its joint venture partners to significantly reduce activity in the fields and to start executing controlled production shut-ins.”
As of Monday (May 17), GeoPark’s net production curtailments were 12,000-15,000 boe/d, representing 40-45% of the Colombia production.
Calgary’s Parex Resources Inc. also reported production losses from its operations in the Llanos. As of Monday production had been off by 9,000 boe/d for a one-week period from a base of 40,000 boe/d.
Natural gas-focused Canacol Energy Ltd., also based in Calgary, said its operations were unaffected. The producer’s realized contractual natural gas sales were 172 MMcf/d for the May 1-17 period.
Colombia’s state oil company Ecopetrol SA had not announced any impacts as of Thursday on its activity. Ecopetrol produced 675,000 boe/d in the first quarter.
Hydrocarbons chamber Asociación Colombiana del Petróleo y Gas said Tuesday fuel shortages were impacting “all Colombians” with about 30% of national supply cut off from distributors. About 120 gas stations had also been destroyed or vandalized.
In a survey issued May 14, trade group Asociación Nacional de Comercio Exterior found that 63% of businesses involved in the export business had ceased their operations.
The protests began over a tax reform proposed by President Iván Duque in late April. The tax reform has since been scrapped, but the protests bloomed into a nationwide movement encompassing numerous themes including rising inequality in the country.
Oil accounts for 2-4% of Colombia’s economy. Oil exports were $9 billion in 2020, according to the hydrocarbons regulator Asociación Nacional de Hidrocarburos.
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