“If we don’t have reserves, the energy transition is at risk” – Sectors – Economy

With the drop in the years for which they would reach the hydrocarbon reserves The alerts in the country were turned on again, since the ghost of a loss of energy self-sufficiency is haunting again.

In interview with César Loza, president of the Workers’ Union (USO)A union of the oil industry related to the government of President Gustavo Petro, joins the call that is being made from different sectors to sign new contracts that allow the exploration and production of hydrocarbons to continue in the country.

(Also read: Colombia’s oil and natural gas reserves reach for fewer years)

In addition, it reveals the negative consequences it would bring for employment and the economy of hydrocarbon-producing regions if Colombia loses its self-sufficiency in oil and natural gas.

How concerned should you be about falling self-sufficiency in oil and natural gas?

Colombia must guarantee self-sufficiency and energy sovereignty. if they have reserves for 7.5 years in oil and 7.2 years in gasalerts should be raised because in the country we must take into account that 10.5 million homes cook with natural gas, three million users with pipette gas and between 65 and 70 percent of the industry requires this fuel.

All this gas is currently produced in the country and if we see avocados to make importsmeans that rates can be increased four or five times and that would be catastrophic for the national productive apparatus.

Regarding crude oil, in Colombia approximately between 430,000 and 450,000 barrels per day are being refined today and The most critical situation could occur at the Barrancabermeja refinery, because it is the largest in the country and all of its cargo is national oil. If we do not have load self-sufficiency for this refinery, we are going to be immersed in taking two paths.

The first is to import the crude to load the refineries, but bringing it from the port to Barrancabermeja increases its cost by between five and six dollars per barrel, which would make the business unfeasible.

The second option is that the refined products are imported to supply the interior of the country and that will have a negative consequence on the local economy of Barrancabermejafrom the department of Santander and about the employment generated by the refinery because the same workers are not going to be required.

With this panorama around oil and gas, it is important to guarantee energy self-sufficiency and for that it is important to seek reservations and guarantee them for longer.

(Also read: Colombia enters a state of ‘urgency’ for fewer natural gas reserves)

If demand increases, can Colombia’s reserves run out before the expected years?

The reserves also depend on the value they have and if it is profitable to extract the ones we have today, that is, if the price of crude oil falls, the reserves that can be extracted will also decrease significantly.

Although the balance of the National Hydrocarbons Agency (ANH) indicates that the reserves are sufficient for more than seven years, the panorama warns that it is necessary to take measures.

One of those measures is that more contracts are delivered?

To guarantee more reserves we must choose to increase the recovery factor, which in Colombia is between 20 and 21 percent approximately. For this, it is necessary to invest resources and technology and do all the subsoil work that the different deposits demand to increase the recovery factor. But this is not enough, it is important to continue exploring and exploiting to increase reserves.

But should that exploration be on existing contracts or on new ones?

Existing contracts must be explored, but it is necessary for the Government to award new contracts because in the oil industry, in addition to the high risk involved, the probability of success is very low. It is necessary that the Government deliver more contracts to be able to guarantee the search for reserves.

Is it feasible to have so many hopes placed on ‘offshore’ discoveries to raise reserves?

Ecopetrol has some prospects with strategic partners such as Shell and Petrobras that show a high probability of success. Obviously offshore exploration is more complex and requires a lot of technology, but it is important that the Government and ecopetrol advance all the necessary options to continue with the works that demand the certification of these reserves and the commercialization of these.

According to the possibilities that arise with these deposits, it could be increase by five or six times the natural gas reserves that are in the country, which would provide security and energy sovereignty. Ecopetrol states that these reserves can be certified and marketed within a period of four years.

(Also read: Despite the fall in reserves, the Government does not change its position on signing new contracts)

With the fall in reserves and the problems faced by energy projects in La Guajira, could the entire energy transition process be at risk?

To do it energy transition Three major elements are required. First, political will is needed and I believe that in Colombia we all have it, the workers, the businessmen and the National Government have it.

Potential resources are also required, such as wind, solar, geothermal energy and tidal power, in addition to natural gas, which is the fuel for the energy transition. But a third fundamental element is required without which the energy transition cannot be made, and they are substantial economic resources to make the investments.

From the USO we believe that these resources have to come from the same profits produced by the oil and gas industry. Consequently, if we don’t have reserves, of course the energy transition is at risk.

The traditional industry oil and natural gas it has to connect with the energy transition because it must produce the resources. We believe that a basic hydrocarbon production curve should be defined in the country and what is produced from there upwards, either by improved recovery or by new deposits, has to generate resources to make the energy transition.

If a government –whether left, right or center– proposes two or three tax reforms to make the energy transition, it will be totally unpopular, consequently, the resources for the transition must come from the oil and gas industry itself.