The future: Unconventional and offshore resources

Without a major new conventional discovery in over 20 years, the oil and gas sector in Colombia is depending on the potential that lies with its unconventional and offshore resources for the longer term. 2012 saw the likes of ExxonMobil, Shell and ConocoPhillips confirm their interest in Colombia's shale evolution. Colombia has yet to prove the full extent of unconventional reserves, but investment from such big players has given a great deal of confidence to the market. “Colombia has huge potential for the production of shale oil and gas,” says Rivodó of ICG. “In fact, I believe it holds the fifth largest shale reserves in the world. Companies like Exxon-Mobil would not come to Colombia for 2,000 or 3,000 boepd. Ten years ago we did not have the technology to identify and extract shale deposits, but now we do and this represents a huge opportunity for Colombia.”

Unexplored geology, however, is not the only question mark hanging over the huge potential that shale is promising. If Colombia is to maintain its strict stance on environmental permitting, then it need only look to the political and social resistance to shale extraction methods we have seen in the US, Canada and Australia, among many other places around the world. The Colombian authorities will have to solve these issues in the coming years if significant unconventional reserves are found; the future growth of their oil and gas sector may hang in the balance. “New reservoirs will hopefully be found, and many of those will contain unconventional resources. There is really no alternative, because Colombia has proven reserves of approximately 2.4 Mbbl barrels as of December 2012, compared to some 250 billion barrels in Venezuela – and remaining a net oil exporter is very important for the economy,” suggests Emilio Azout, country manager of leading oil and gas software developer Paradigm.

Offshore production, meanwhile, may take longer to materialize, but most agree the potential is huge for the South American nation straddling both the Caribbean and Pacific. This year, Anadarko, in partnership with Ecopetrol, has contracted CGG to acquire and process 5,500km2 of 3D seismic, the most extensive in the country's history. “I think there is good offshore potential in Colombia, and the sector will come to comprise a significant amount of Jason CGG's work here,” says Jorge Aranguren, manager at Jason CGG. “Companies such as Equión, Petrobras, Ecopetrol and Anadarko have many offshore blocks. Jason CGG has been conducting feasibility and inversion studies with excellent success – not in terms of oil reserves, because many of them are gas, but in helping the companies decide whether to continue development.”

This report was prepared by Caroline Stern, Alice Pascoletti, Ramzy Bamieh and Josie Perez of Global Business Reports. For more information contact info@gbreports.com.

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