Colombia's Offshore Gas Might Ease Supply Challenge

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Petrobras and Ecopetrol's latest discovery offers Colombia new hopes of expanding its resources and reducing its dependency on energy imports as its reserves drops. The Sirius project could produce the equivalent of about 60% of Colombia's natural gas production in 2025.

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In Search of More Supply

Colombia is racing to find new natural gas reserves; its proved reserves stand at 1.717 trillion cubic feet, or 5.9 years of production at current rates.

For years, the South American nation has sought to extend the life of its oil and gas industry. Petrobras and Ecopetrol's latest offshore discovery at Sandia-1 is the newest sign that Colombia could expand its natural gas resource base.

Brazilian company Petrobras announced a gas discovery in the Sandia-1 exploratory well in the GUA-OFF-0 block, located in deep waters offshore Colombia. Sandia-1 joins Sirius and Copoazu-1 in the same offshore block, further strengthening the area's gas outlook.

Petrobras has not yet disclosed the size of the Sandia-1 resources.

The Sirius accumulation, confirmed through the Sirius-1 discovery well and the Sirius-2 appraisal well, is estimated to contain more than 6 trillion cubic feet of natural gas in place, further strengthening Colombia's gas outlook.

Such a volume makes Sirius the nation's largest natural gas discovery to date and potentially a game changer for Colombia, a country historically better known for its crude oil production.

To put things in perspective, the Sirius project contemplates a gross production plateau of 470 million cubic feet per day (MMcf/d) for 10 years, compared with Colombia's average natural gas production of approximately 795 MMcf/d in 2025. Sirius' planned output would therefore equal almost 60% of the country's 2025 production.

Industrial Info Resources offers more information on the Sirius development in its Global Market Intelligence (GMI) Oil & Gas Production Project Database, where readers can find details--including construction schedules, investment values and necessary equipment--in a detailed list of project reports.

The offshore block is held by a consortium composed of Petrobras, which operates the project with a 44.44% interest, and Ecopetrol, which holds the remaining 55.56%. First gas from Sirius is expected between 2029 and 2030, depending on environmental licensing and consultation processes, with projected production-development costs of US$2.9 billion

The deepwater characteristics of the Sirius project make Petrobras a valuable partner, as the company has demonstrated its capacity to develop deep- and ultra-deepwater projects in Brazil's Santos and Campos basins.

A Push for Independence

Beyond increasing domestic supply, Sirius could reduce Colombia's growing dependence on imported liquefied natural gas (LNG) and its exposure to volatile international prices.

Colombia already is advancing several LNG import and regasification alternatives to reinforce the country's short- and medium-term supply, such as the Puerto Bahia Expansion Terminal and the Buenaventura-Buga projects. Readers can learn more from detailed lists of reports on the Puerto Bahia and Buenaventura-Buga projects.

The GUA-OFF-0 block offers Colombia the opportunity to supply its domestic industry with new volumes, support market needs, and attract additional investment into the country's offshore exploration and development.

The additional volumes also could strengthen electricity security during droughts, when lower hydropower generation increases the country's reliance on gas-fired thermal plants, helping stabilize energy availability.

Historically, Colombia's hydrocarbon production has focused on onshore assets, where protests, attacks and other third-party disruptions have affected operations periodically. By contrast, offshore development offers the country a new avenue for expansion and could diversify its production base.

Key Takeaways

• Colombia's natural gas reserves are at 1.717 trillion cubic feet, about 5.9 years of production at current rates.
• Petrobras and Ecopetrol estimate that Sirius contains more than 6 trillion cubic feet of natural gas in place.
• The Sirus project's production would represent about 60% of Colombia's 2025 natural gas output.

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