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Colombia Oil and Gas Report Q2 2016

Colombia Oil and Gas Report Q2 2016

BMI View: Colombia's energy sector is nearing an inflection point. While the past decade saw strongproduction growth due to improvements in the business and security environment, we caution the countrywill experience downward pressure on oil and gas production over the next decade. The tendency towardsmaller finds, as well as continued pipeline attacks will decrease private investor interest in Colombia'sresources. Further, sustained lower oil prices have threatened the development of upstream anddownstream projects by national and international investors.

Latest Updates And Key Forecasts

Colombia narrowly met its 2015 oil production target of 1.0mn bbl per day (b/d), averaging 1.005mn b/d,a 1.8% increase versus 2014. The 2015 target had been reduced from 1.03mn b/d in June. Natural gasproduction averaged over 6.0% lower in 2015 reflecting the suspension of the Riohacha gas field inAugust.

Colombia's oil sector has reached a critical turning point as lower oil prices weaken upstream prospects.

Although the government cut its own production target for the year to 944,000 barrels per day (b/d) onJanuary 25, we believe there is growing risk output will underperform. Continued downside weakness inbenchmark oil prices will render many existing projects uneconomic and undermine upstreamdevelopment in 2016.

Following its credit downgrade on January 18, Ecopetrol announced a series of cost-cutting actions inFebruary with hopes of saving USD471mn. These include the sale of non-core assets, a 10% reduction ofits workforce and a freeze in operational expenditures at 50% of 2015 levels. This was followed by aUSD300mn loan from Bancolombia on February 23.

The modernised Refineria de Cartagena SA (Reficar) is expected to reach full capacity in March 2016.This will add 85,000 b/d of downstream capacity which will service growing domestic demand over thenext several years. Although reports surfaced in February regarding USD4.0bn in cost overruns, theincrease in downstream capacity will support growing domestic demand.


BMI Industry View
Table: Headline Forecasts (Colombia 2014-2020)
SWOT
Oil & Gas SWOT
Industry Forecast
Upstream Exploration
Latest Updates
Structural Trends
Upstream Projects
Table: Colombia - Key Upstream Projects
Upstream Production - Oil
Latest Updates
Structural Trends
Table: Oil Production (Colombia 2014-2019)
Table: Oil Production (Colombia 2020-2025)
Upstream Production - Gas
Latest Updates
Structural Trends
Table: Gas Production (Colombia 2014-2019)
Table: Gas Production (Colombia 2020-2025)
Refining
Latest Updates
Structural Trends
Table: Refining Capacity and Refined Products Production (Colombia 2014-2019)
Table: Refining Capacity and Refined Products Production (Colombia 2020-2025)
Refined Fuels Consumption
Latest Updates
Structural Trends
Table: Refined Products Consumption (Colombia 2014-2019)
Table: Refined Products Consumption (Colombia 2020-2025)
Gas Consumption
Latest Updates
Structural Trends
Table: Gas Consumption (Colombia 2014-2019)
Table: Gas Consumption (Colombia 2020-2025)
Trade - Oil
Crude Oil
Latest Updates
Structural Trends
Table: Crude Oil Net Exports (Colombia 2014-2020)
Table: Crude Oil Net Exports (Colombia 2020-2025)
Refined Products
Latest Updates
Structural Trends
Table: Refined Fuels Net Exports (Colombia 2014-2019)
Table: Refined Fuels Net Exports (Colombia 2020-2025)
Trade - Gas (Pipeline and LNG)
Latest Updates
Structural Trends:
Table: Gas Net Exports (Colombia 2014-2019)
Table: Gas Net Exports (Colombia 2020-2025)
Industry Risk Reward Index
Latin America - Oil & Gas Risk/Reward Index
Table: Latin America - Composite Risk/Reward Index
Composite RRI: Sector Shifts Continue To Take Shape
Upstream: Few Shifts, But Changes Loom
Table: Latin America - Upstream Risk/Reward Index
Downstream: Medium-Term Outlook Reinforces Current Dynamics
Table: Latin America Downstream Risk/Reward Index
Colombia Risk/Reward Index
Colombia Upstream Index - Overview
Colombia Upstream Index - Rewards
Colombia Upstream Index - Risks
Colombia Downstream Index - Overview
Market Overview
Colombia Energy Market Overview
Overview/State Role
Licensing And Regulation
Table: Royalty Rates
International Energy Relations
Oil And Gas Infrastructure
Refineries
Table: Refineries In Colombia
Service Stations
Oil Terminals/Ports
Oil Pipelines
LNG Terminals
Gas Pipelines
Competitive Landscape
Competitive Landscape Summary
Table: Key Players - Colombian Oil & Gas Sector
Company Profile
Chevron
Empresa Colombiana de Petróleos (Ecopetrol)
ExxonMobil Colombia
Occidental
Pacific Exploration & Production
Perenco
Sinochem
Other Summaries
Regional Overview
Latin America Overview
Table: Latin America Oil And Gas Production, Refining Capacity And Trade, 2013-2024
Glossary
Table: Glossary Of Terms
Methodology
Industry Forecast Methodology
Source
Risk/Reward Index Methodology
Table: Bmi's Oil & Gas Upstream Risk/Reward Index
Table: Weighting

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