Colombia is now looking to join in what has been called “the global shale boom” as exploration has been expanded in areas once under the control of the guerrillas, and increased crude production causes oil stocks to rapidly dwindle.
Colombia’s state-owned oil exploration company Ecopetrol SA, along with a unit of Exxon Mobil, bid the highest for three onshore blocks, at the country’s first auction to draw investment in oil and natural gas found in shale rock on Wednesday.
Oil output in Colombia has increased by a massive 72% in the last five years, while international investment in crude has grown due to increased security. Production levels, although sometimes rocky due to guerrilla attacks, have been increasing over the past few months since the announcement of the peace talks between the Colombian government and the country’s largest guerrilla group the FARC.
The country expects to be producing one million barrels of oil by the end of the year, making it the fastest-growing major oil producer in Latin America.
Colombia is exploring new “unconventional” sources like methane or shale oil as crude oil discoveries become less frequent. U.S. government reports give Colombian crude reserves around seven years of output while Colombian figures project eight years. Exploitation of unconventional fuels would increase the country’s reserves to more than 10 years.
According to Bloomberg, the head of Colombia’s National Hydrocarbons Agency intends to quickly join the race with Argentina and Mexico which have already started to make moves in unconventional energy production.
Shale oil is called unconventional because while conventional reservoir rocks are porous, and oil and gas flows into the oil well due to geologic pressure, shale fields are not that permeable. The oil or gas deposits may be large, but there are no channels in the rock through which they can travel.
There are two ways to unlock the gas and oil trapped in shale deposits, horizontal drilling and fracking. Horizontal drilling is just that: horizontal wells are drilled down and sideways to access the reservoir layers. Fracking is the controversial process where liquid is pumped into a shale reservoir under huge pressure that cracks the rock.
Fracking has been blamed for causing slight earthquakes and is banned in several countries. According to the Oscar-nominated documentary GasLand, unlocked gas could burst out of people’s taps because of the process.
The development of fracking and the availability of previously unattainable natural gas and oil from shale, is heralding a “global shale boom,” deemed to be responsible for a revival of manufacturing in the U.S. as energy costs continued to fall this year, with U.S. gas prices plummeting from $30 to $2.80.
The environmental impact of natural gas is positive as it emits half as much carbon dioxide as coal which it replaces lowering greenhouse gas emissions.