Investment in exploration in Eastern Llanos falls for the second consecutive year

The most recent economic report presented by the Colombian Petroleum Association (ACP), Investment Trends E&P in Colombia 2020 and Perspectives 2021, projects the Eastern Plains as the second region, after the Caribbean, with the highest investment for exploration in 2021, with USD 190 million budgeted, which will be executed mainly in Casanare (USD 110 million) and Meta (USD 74 million).

• USD 190 million budgeted for investment in exploration, mainly in Casanare (USD 110 million) and Meta (USD 74 million).
• In production, Meta remains the main recipient of investment (USD 1.110 million) and Casanare the third (USD 342 million).
• However, the decline in exploratory investment evidenced in recent years in this region continues. The highest level of blockades, public order situations, and social conflict slow down the execution of projects.

The most recent economic report presented by the Colombian Petroleum Association (ACP), Investment Trends E&P in Colombia 2020 and Perspectives 2021, projects the Eastern Plains as the second region, after the Caribbean, with the highest investment for exploration in 2021, with USD 190 million budgeted, which will be executed mainly in Casanare (USD 110 million) and Meta (USD 74 million).

Nevertheless, it is noteworthy that investment in this region of the country has been decreasing in recent years. The budgeted investment in the Llanos dropped from USD 305 million for 2019, to USD 209 million for 2020 and USD 190 million for 2021.

“Despite being the basin with the largest number of contracts and areas in exploration and evaluation in force, and having significant prospective oil and gas resources, it is worth analyzing the reasons why investment in this region has been declining; for example, the complex situation of social conflict should be reviewed,” explained the president of the ACP, Francisco José Lloreda Mera.

According to the report, this is the region with the highest level of blockades to the operations of the oil and gas industry; as of July 2020, 351 of these occurred in the departments of Meta, Casanare, and Arauca, a similar situation occurred in 2019 representing 311. And according to the perception of the companies surveyed by the ACP, public order situations and social conflict slow down the execution of projects in the Eastern Llanos.

“The oil and gas industry remains committed to the country and the regions, especially in the current pandemic situation, when sectors are needed to boost local economies. The resources provided by the sector, in royalties, taxes, economic and contractual rights, will be fundamental to contribute to social and economic reactivation, as well as to promote employment and regional growth, hence the importance of executing investments and projects and maintaining the Llanos as an attractive investment destination,” emphasized Lloreda Mera.

Finally, regarding investment in production, by regions, the department of Meta will continue to be the main recipient with USD 1.110 million, followed by Santanderes (USD 442 million) and Casanare (USD 342 million).

National projection

In the country, the projected investment in oil and gas exploration and production for 2021 is between USD 3.1 billion and 3.45 billion, 51% higher than that of 2020, but lower than that recorded between 2015 and 2019, by about USD 300 million.

45% of the total exploration budget will be focused on the search for gas; and 15% will be allocated to production, thus maintaining the growing trend in the focus on this fuel, essential for leveraging the energy transition.

95% of the investments in 2021 will take place onshore, while in offshore and unconventional fields (YNC) the investments will be aimed at developing studies and other activities prior to exploratory drilling, which is expected for 2022.