Colombia oil producers closing taps as unrest persists

Market: Crude oil, Natural gas, Oil products
18/05/21

Anti-government protests and roadblocks are forcing oil producers in Colombia to shut in wells, dealing another blow to the non-Opec exporter.

Latin American independent GeoPark has had to "significantly reduce activity in the fields and to start executing controlled production shut-ins" at the Llanos 34 block and Patanillo block, which it has gradually implemented since 8 May.

The unrest has impacted "transportation, drilling, and the mobilization of equipment and personnel," GeoPark said yesterday.

The company's net production curtailments total 12,000-15,000 b/d of oil equivalent (boe/d), or 40pc-45pc of its Colombian output.

"Drilling, maintenance and other field activities in Colombia have been temporarily suspended until the situation is resolved," Geopark said.

Similarly, Canadian independent Gran Tierra said today it has reduced oil output by 5,250 b/d, reflecting "a combination of slowdowns of some oil wells' production rates, the shut-in of some oil wells in certain fields and the complete shut-in of certain other fields."

The company noted that the blockades are not directed at the firm, but they are nonetheless thwarting mobilization of supplies, food, water, fuel and oil sales. The unrest is affecting production in the mature Middle Magdalena Valley basin in central Colombia as well as Putumayo in the south.

The Colombian government of President Ivan Duque has struggled to quell the demonstrations even after it withdrew a controversial tax proposal that first ignited the unrest on 28 April.

Government talks with a national strike committee have so far failed to break the stalemate.

Gran Tierra said it could restore production in one to two weeks if the talks succeed, maintaining its 2021 guidance of 28,000-30,000 b/d.

Fellow Canadian independent Frontera Energy said today it has had "no material impacts" from the unrest so far.

While parts of Colombia are stable, others are still gripped by protests and roadblocks that have impeded distribution of food, fuel and medical supplies. In recent weeks, Colombia's state-controlled Ecopetrol has been coordinating with the government to try to replenish fuel. Emergency shipments are coming in from neighboring Ecuador.

Late yesterday following explosions around the Yumbo fuel distribution hub outside Cali, mines and energy minister Diego Mesa reiterated a call to lift all roadblocks. "These are not protests, these are criminal acts that threaten the fundamental rights of millions of Colombians."

By Patricia Garip

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