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Colombian oil, gas and petrochemicals

Hydrocarbon Engineering,


Oil and gas

Colombia has seen strong production growth due to improvements in business and security over the past 10 years. However, BMI is now advising caution as the country is expected to experience downward pressure on oil production over the longer term. There is a tendency towards smaller finds, and this along with increases in pipeline attacks has begun to show signs of decreasing investor interest in the country. Due to this BMI is holding a cautious stance with regards to the future of Colombia’s hydrocarbon productivity.

When it comes to gas there is rising investment and gas production has nearly doubled in the last decade. BMI see scope for strong growth in the years ahead and output is forecast to rise from an estimated 12.8 billion m3 in 2014 to 14.7 billion m3 in 2018 and 17.9 billion m3 by 2023.

Colombia does however have a strong dependency on oil prices and this has led to high volatility for the country’s export revenues. Due to this, falling oil prices pose downside risks to future project development. As the US remains Colombia’s primary crude export market, BMI has said that the expected fall in US oil imports on the back of its own oil production boom will threaten Colombian exports. Therefore, an increasing amount of Colombian exports will need to be sent to Asian importers. Due to this, BMI has noted in particular, an increased interest from China in accessing Colombia’s crude supplies.

Petrochemicals

BMI expects moderate improvement this year in Colombia’s petrochemicals sector. This is due to stagnant growth rates in 2014. BMI has also said that the sector will see modest consumption growth also. Growth in petrochemicals consuming industries such as the automotive and construction sectors has been strong, but has not benefitted the Colombian petrochemicals market. The construction industry has however played a large part in buoying the sector with a road infrastructure programme.

The current investment drive in the country is towards the refining sector. Refining capacity is expected to increase to 420 850 bpd this year. Potential naphtha provided by this extra capacity may however not justify cracker expansion, it could however improve local propylene supply, thereby justifying an increase in polypropylene capacity. No petrochemicals capacity expansion is expected in the years ahead.


Edited from report briefs by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/23022015/oil-gas-petchem-bmi-colombia/


 

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