Colombia’s oil reserves will be exhausted in seven years at the current rate of extraction said Energy Minister on Tuesday.
This is particularly alarming because according to government figures, about half of Colombia’s export dollars come from oil.
Minister Amylkar Acosta told El Espectador newspaper that no new major discoveries of oil had been made recently and that Colombia’s reserves were “extremely precarious.”
According to the World Factbook, Colombia’s proved oil reserves as of 1 January 2013 were 2.417 billion barrels.
Average Colombian production was estimated at 944,000 barrels a day for 2012, or 344 million barrels a year.
At this rate, barring an improbably large new discovery, reserves would be exhausted in about seven years.
The effect on the balance of trade, should Colombia become a net importer could be dramatic, as roughly half of Colombia’s export dollars comes from oil and its byproducts.
In the six months between January and July this year Colombian exports amounted to $33.9 billion according to the latest figures from the Colombian Ministry of Commerce, Industry and Tourism.
Of this, $15.7 billion, or 46.3% of total export dollars, was from petroleum alone.
Preview of the future
Recent events provide an insight into what might happen to the Colombian economy without oil.
At present, Colombia is a net exporter of oil, but imports refined fuel and complex petrochemicals when refinery strikes or terrorist attacks create bottlenecks in these products.
In September this year, one of these bottlenecks caused a 43.8% surge in the import of refined fuels and contributed to a 10% increase in imports over the same month last year.
Recent Prosperity from Peace… and Venezuelans
London’s Finanical Times reported earlier this year that Colombian oil production has been surging in recent years due to a perfect storm of decreasing guerrilla attacks, renewed foreign investment and Venezuelan oil expertise that came to the country in 2006 after a purge by Venezuela’s then-President Hugo Chavez.
Canadian-listed oil company Pacific Rubiales has gone from extracting 14,000 barrels a day in 2008 to a forecast of more than 250,000 barrels a day this year, thanks to Venezuelan production technology.
Despite the fact that there has been no big oil discoveries made, the industry has grown because of the increasing secure business environment and big investments from state oil company EcoPetrol and Pacific Rubiales.