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Investment in Colombia oil and gas forecast to soar in 2022 while output lags

Investment in Colombia’s oil and gas industry is forecast to soar in 2022, boosted by exploration investments, a private producers’ association said on Wednesday, though output is expected to lag pre-pandemic levels for another year.

Some $4.4 billion of investment is expected to be made in the Andean country’s hydrocarbons sector during 2022, 42% higher than in 2021, the Colombian Petroleum Association (ACP) said during its annual industry outlook presentation.

Of the forecast investments, $1.13 billion will go toward exploration – more than half in gas – which would represent the highest level of exploration investment since 2014, the ACP said.

Earlier this month, the government signed 30 contracts with oil and gas companies, including Parex Resources PXT.TO and state-owned oil company Ecopetrol ECO.CN.

“This is good news and what we’re seeing is that companies are committed to helping kick-start exploration,” ACP president Francisco Lloreda said in the virtual presentation.

While the outlook for Colombia’s hydrocarbons sector improves, the industry continues to struggle with the coronavirus pandemic, which caused production to decline, while weeks of social unrest amid anti-government protests last year caused further falls in output.

Oil production in 2021 fell 5.6% versus the previous year to 736,000 barrels per day (bpd), the ACP said. The combined oil and gas output came in 4% lower than 2020 levels at 924,000 barrels of oil equivalent per day (boed).

In November, Energy Minister Diego Mesa revised forecasts for Colombia’s 2021 oil production to around 770,000 bpd, down from a previous range of 780,000 to 800,000 bpd.

Despite hopes of economic recovery in 2022, Colombia’s oil and gas output is expected to remain below pre-pandemic levels, according to ACP forecasts.

Though combined production in 2019 hit 1.07 million boed, output for this year is forecast at 954,000 boed, the ACP said.
Source: Reuters (Reporting by Oliver Griffin and Luis Jaime Acosta; Editing by Lisa Shumaker)

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