In the midst of the proposals regarding the future of the country’s energy policy, the oil sector revealed medium and long-term projections under a scenario of sustaining hydrocarbon exploration and production, as well as under a new reality of weakening with a that focuses exclusively on different energy sources and imposes a higher tax burden on the energy sector oil and natural gas.
According to Francisco José Lloreda, president of the Colombian Petroleum Association (ACP)a new reality under the second scenario would see oil production fall 47 percent and gas production fall 27 percent in five years.
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Due to this, Colombia would substantially anticipate gas import projections, which would take place from 2026, while oil would have to be brought in from abroad from 2028.
According to an economic study carried out by the association, the country would face this deficit because only projects already approved for the development of discovered resources would be executed, and only the exploratory wells from contractual obligations of the companies with the National Agency would be drilled. from hydrocarbons (OLDER BROTHER).
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At the same time, resources already discovered would be left undeveloped, there would be no additional exploration, nor pilot projects in conventional deposits, through fracking technology.
This, according to Lloreda, would lead to fuel prices and household gas bills skyrocketing, but there would also be a risk for supporting electricity generation with gas in times of drought or to cover the intermittency of sources. non-conventional renewables.
According to ACP calculations, in four years the price of a gas bill would multiply by five times, and Colombians would have to take out of their pockets 6,000 million dollars a year to assume this extra cost, exposing themselves, in addition, to high volatility of price like those experienced in the world by the war in Ukraine. “The gas import projection would be anticipated in 7 years,” said the manager.
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The stability scenario
Meanwhile, if the current energy policy is maintained, the oil and gas sector would generate income for the Nation of 105 billion in the next four years and 227 billion until 2032, contributing to the financing of social development programs, the reactivation economy, production and energy diversification and the fiscal balance of the country.
Likewise, it would put 38 billion pesos for royalties during the next government, and 80 billion until 2032, figures that with optimal public policy coordination, would contribute to improving the quality of life in the country’s regions, especially those with the greatest basic needs. dissatisfied (benefited with royalties) and the producers.
According to Lloreda, if there are no more contracts, then the natural thing is that they reduce their presence in the country and the parent companies take the investment to other places. On the contrary, in a reality of sustaining the energy policy, 84 billion pesos would be encouraged in investments in the sector during the next government and 172 billion until 2032.
complex landscape
On the other hand, in the scenario of weakening the energy policy, these investments would be reduced by 21 billion pesos, that is, by 5,000 million dollars, between 2022 and 2026 alone.
According to the study, with a policy of weakening the exploration and production of oil and gas in the country, the ACP estimates a loss of 18 billion pesos in fiscal contributions between 2022 and 2026, of which the Nation would lose 13 billion pesos. of income, and the regions, 5 billion from lower collection of royalties.
“The loss of 13 billion for the Nation during the four-year period is equivalent to what it costs approximately 40 percent of the solidarity programs that currently benefit 4 million families or 65 percent of the investment in education by 2022,” he added. Lloreda when specifying that 40,000 public jobs would be at risk.
For this reason, the ACP warned that the energy transition must be carried out intelligently and responsibly, because in the most ambitious scenarios of climate change for the year 2050, the world will continue consuming oil and gas.
And he stressed that when talking about weakening the energy policy, there is talk of doing the same with Ecopetrol, which would affect the cash of the largest company in the country and its contribution to national finances.
Impact on regional economy
If Colombia abandons the signing of new oil and gas exploration and production contracts, a huge hole would be opened for the finances and economy of the regions, due to fewer royalty resources and a drop in the contracting of goods and services that the sector does with third parties to operate.
For example, according to the Colombian Petroleum Association (ACP), under this scenario of weakening energy policy, a producing department, such as Meta, would stop receiving 412,000 million pesos a year in royalties, resources that are equivalent to the income destined to health and tourism funds of the department; while a non-oil sector like Chocó would stop receiving 70,000 million pesos, a figure that today is equivalent to half of the income of the local Chocó health fund.
“The fall in investments and production of oil and gas would lead to sector suppliers losing the opportunity to contract approximately 20 billion pesos between 2022 and 2026, generating a complex situation for the oil regions,” says the document made by the union. .
And he points out that the quality of life in the regions would fall, since the oil sector is one of the main sources of employment in at least 97 producing municipalities, generating more than 95,000 jobs, while it is estimated that the 47 percent drop in production in five years would reduce the income of producing municipalities associated with the chain of goods and services in the sector by 60 percent.
Likewise, the regions would stop receiving 415,000 million pesos for mandatory socio-environmental investments that this industry makes each year.
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