Transitioning Colombia's Energy Sector

The Colombian government, under President Gustavo Petro, has committed to an ambitious energy transition, halting new drilling permits two years ago and focusing on sustainable energy solutions. Environment Minister Susana Muhamad highlighted the need for “nature-based climate solutions,” which encompass low-carbon energy, electrification of transport, and improved agricultural practices. This transition is seen as essential in light of expected declines in hydrocarbon revenues and the need for economic transformation. At the same time, Brazil’s Petrobras has made significant natural gas discoveries offshore Colombia that could potentially double the country’s reserves, presenting a complex dynamic where Colombia must balance immediate energy needs with long-term sustainability goals.

Economic Transformation Goals

• Investment Focus: The $40 billion plan aims to develop sectors that can replace oil revenues, with hopes of securing at least $10 billion from international sources.
• Nature-Based Solutions: Investments will target climate-friendly projects, including biodiversity protection and agricultural improvements.

Natural Gas Discoveries

• Recent Discoveries: Petrobras’s discoveries at the Uchuva-1 and Uchuva-2 wells could add approximately 6 trillion cubic feet of natural gas, potentially doubling Colombia’s reserves.
• Domestic Challenges: Despite these discoveries, Colombia faces an impending natural gas shortfall, with a projected supply-demand gap increasing from 12% to 30% by 2026.

Balancing Transition and Energy Needs

Colombia’s energy transition is marked by a dual focus on reducing dependency on fossil fuels while addressing immediate energy supply challenges. The government’s commitment to phasing out hydrocarbons, alongside significant new gas discoveries, illustrates the complex path ahead as Colombia seeks to navigate its energy future.