Colombia Oil Reserves Seen Falling as Petro Bans New Drilling

An imminent Colombian government tally of the nation’s oil reserves is expected to show a decline, putting pressure on President Gustavo Petro to reconsider his ban on new fossil-fuel contracts.

A National Hydrocarbons Agency report scheduled for release later this month is expected to show the reserves shrank last year from the previous assessment of 7.6 years and 8 years, respectively, of crude and natural gas output, analysts said. 

Despite higher international oil prices last year, the best-case scenario is that crude reserves remained flat, according to Daniel Guardiola, an analyst at Banco BTG Pactual.  

While the Petro administration has refused to issue new oil-exploration licenses, the ministries of energy, finance and industry in March said the reserves report would be key in determining policy going forth. 

“We’re already seeing the impact of the uncertainty created by this administration and there’s no reason to think things will change,” said Sergio Cabrales, a professor at Bogota’s Los Andes University. “New contracts would need to come with attractive conditions and everything we’ve seen so far is completely the opposite.” 

Lawmakers last year barred oil and coal companies from deducting royalty payments from corporate taxes and imposed a windfall tax. Congress currently is considering a ban on fracking.