The Colombian Petroleum Association (ACP) highlighted the benefits of greater investment in clean energy, the progressive substitution of demand for fossil fuels, greater energy efficiency, the revision and relaxation of regulations to accelerate the generation of clean energy, and the reindustrialization of the Colombian economy, announced by the Government.
The executive president of the Colombian Oil and Gas Association (ACP), Francisco José Lloreda Mera, described as positive the unification of criteria within the national government in relation to to the energy transition, especially the announcement by the ministries of Finance, Foreign Trade and Mines and Energy, which indicates that the timing of this transition will depend on an export transition, on reaching a more diversified economy and less dependent on oil and coal , and the fiscal and macroeconomic sustainability of the country.
“It is an announcement that the country was waiting for, since it is part of the recognition that the energy transition cannot depend solely on some objectives in energy and environmental matters, commendable as they may be, especially when it is known that the impact of the activity of the sector on the global climate crisis is minimal and that the main challenge of the energy transition in Colombia is not in the supply of energy but in the demand; that is to say, in the transition of the automotive fleet”, indicated the union leader.
He pointed out that “these are important objectives that, like those that will determine the time of the transition, will require concrete actions, goals and indicatorswhich hopefully will be included in the National Development Plan, so that, as indicated by the Government, they are permanently evaluated”.
Exploration
With regard to the oil and gas exploration and production policy, the ACP leader stated that the Government’s statement seems to subordinate it, rightly, to the four announced determinants of the transition (export transition, diversification of the economy, less dependence on of oil and coal, and fiscal and macroeconomic sustainability) and monitoring of the annual reports of proven hydrocarbon reserves officially certified by the National Hydrocarbons Agency, ANH.
According to the president, it is foreseeable that the 2022 reserves report will show an increase in proven oil and gas reserves, not only due to the exploratory effort carried out by the companies, but because of the high oil prices in 2022, whose average was US$100 a barrel, and which would make it possible to materialize resources that were not possible before. When prices are high, oil and gas that are more expensive to extract can be developed; therefore, a volume of reserves that were considered probable were reclassified as proven and others, considered as possible, are temporarily reclassified as probable. “It will be good news, which must be understood in the current context of last year’s prices,” said Lloreda Mera.
Contracts
The union leader also pointed out that the existing oil and gas contracts require strong support from the national government, the Congress of the Republic and the regional authorities, in order to be successful; they need rigorous speed in licenses and permits; law enforcement and security in the territory; and be vigilant to legal and regulatory initiatives that hinder their development and institutional articulation. “The Ministers of Finance and Mines and Energy have expressed their interest and decision to carry out these contracts, a task in which they have the support of the industry,” he added.
Lloreda congratulated the companies Promigas and TGI for bidirectionally connecting the gas pipelines in the interior of the country with those on the Caribbean coast, so that it is possible to send natural gas in both directions, facilitating the supply of hydrocarbons to both markets. “It is extraordinary news; The next step should be to agree on a fairer distribution system for transportation costs so that all regions have natural gas at reasonable prices,” he said.
“From the ACP, a union that associates natural gas producers, we will continue working tirelessly so that this gas is made at home and not imported; so that we have an infrastructure and regulation that allows it to be developed and that it reaches the final consumer”, said Lloreda.