BMI View : We maintain a downbeat outlook for Colombia's oil and gas sector as sustained oil price weakness weigh s on development prospects, particularly in the upstream . Private invest ment will be limited as international firms strengthen their core assets elsewhere . F urther expansion of the sector will therefore become increasingly dependent on cash-strapped state-owned Ecopetrol. While the passage of the government ' s second peace deal with FARC rebels will improve the operating environment, we note risk of future attacks on infrastructure as smaller guerrilla groups continue to stake their claims .
|e/f = BMI estimate/forecast. Source: ANH, EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||1,009.8||1,026.5||911.4||874.6||851.4||838.0||832.2|
|Refined products production, 000b/d||338.2||341.3||381.9||394.5||399.5||404.7||410.1|
|Refined products consumption & ethanol, 000b/d||362.9||374.6||382.7||393.2||407.4||423.0||439.4|
|Dry natural gas production, bcm||9.6||9.8||9.4||9.2||8.9||8.7||8.6|
|Dry natural gas consumption, bcm||8.3||8.8||9.1||9.5||9.7||10.0||10.2|
Latest Updates And Key Forecasts
Having maintained yearly average output at over 1.0mn b/d from 2013 to 2015, production in 2016 fell sharply as operators pulled back spending to mitigate the impacts of muted upstream revenues. Through the first nine months of the year, production declined by an average rate of 10.8% y-o-y, representing a loss of approximately 110,000b/d.
The gradual strengthening of crude prices will not revive Colombia's oil sector in 2017. Having suffered sharp declines in the wake of prolonged price weakness, we believe larger private sector participants will turn away from the market in an effort to boost their core assets. This will leave state-run Ecopetrol largely responsible for generating growth, a role it will find challenging to fill given its more modest capex plans.
The region's national oil companies (NOCs) will remain focused on improving project economics, particularly with respect to drilling and lifting costs. However, low profitability, weak domestic currencies and elevated debt loads will undermine an increase in spending in 2017. We therefore believe regional capex will fall by an estimated USD3.0bn in 2017, representing a 6.0% decline y-o-y. This supports our downbeat production outlook for Latin America, where we expect total liquids will fall 0.8% y-o-y in 2017, averaging 9.85mn b/d.
A new peace deal negotiated by President Juan Manuel Santos' administration and members of the Fuerzas Armadas Revolucionarias de Colombia (FARC) in November incorporated enough of opponents' demands to be ratified prior to the end-2016 ceasefire expiration. Following the defeat of the original peace accord in an October referendum, officials sought to re-launch negotiations with input from the political leadership of the 'No' campaign in addition to civil society groups.
The start up of Colombia's first liquefied natural gas (LNG) import facility in November underscores the country's gradual shift toward net import status. Having exported supplies to Venezuela via pipeline for nearly a decade, Colombia is now poorly positioned to do on the back of waning domestic supplies and rising consumer demand.
It is our expectation that Venezuelan NOC PdVSA will not meet its December 1 target of exporting natural gas to Colombia. The agreement signed on September 28 between PdVSA and Colombia's Petromil Gas involves shipments of 1.42mn cubic metres (mcm) per day sourced from Venezuela's offshore Cardon IV block. Underutilisation of hydropower facilities, a deficit of gas supplies and continued infrastructure deficiencies will prolong Venezuela's inability to realise its export ambitions into 2017.
The Colombia Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Colombia including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's Colombia Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Colombian oil and gas industry.
- Benchmark BMI's independent oil and gas industry forecasts for Colombia to test consensus views - a key input for successful budgeting and strategic business planning in the Colombian oil and gas market.
- Target business opportunities and risks in the Colombian oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Colombia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand and refining, plus analysis of landmark company developments and key changes in the regulatory environment.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the upstream and downstream sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast:
- Pricing: Oil price (USD/bbl, WTI, Brent, OPEC basket, Urals); oil products prices (unleaded gasoline, gasoil/diesel, jet/kerosene – USD/bbl) at global hubs.
- Production, Consumption, Capacity & Reserves: Proven oil reserves (bn barrels), production, consumption, refinery capacity and throughputs (‘000b/d); proven gas reserves (tcm), production and consumption (bcm) and fuels trade.
- Imports & Exports: Crude oil exports/imports (‘000s b/d) and value of crude oil trade in USD. Fuels exports/imports (‘000s b/d) and value of fuels trade in USD. Natural gas imports/exports (bcm), by pipeline and/or LNG, and value of natural gas trade.
BMI’s Oil & Gas Risk Reward Index
BMI’s Risk Reward Indices provide investors (independents, NOCs, IOCs, oil services companies) looking for opportunities in the region with a clear country-comparative assessment of the upstream and downstream market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A profile of the upstream and downstream sectors, including analysis of reserves, output, consumption and trade of energy products; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Comparative company analyses by USD sales, % share of total sales, number of employees, year established, ownership structure, oil production (‘000b/d), gas production (bcm), downstream capacity (‘000b/d) and % market share.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Regional perspective on size and value of the industry. Plus comparative rankings by production, refining, imports and exports of oil, gas and LNG.
Global Oil Market & Oil Products Outlook
Based on our country coverage of over 99% of global oil and gas production and consumption, BMI provides demand, supply and price forecasts to end-2024 for oil, gas and oil products.
The Oil & gas Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.