Colombian offshore natural gas discovery smaller than anticipated, Ecopetrol determines

(Bloomberg) – Colombia’s state energy company, Ecopetrol SA, has determined that a natural gas deposit in the Caribbean Sea that officials were counting on to shore up the nation’s dwindling reserves is significantly smaller than initially estimated.

Officials said Thursday that they are now reevaluating the discovery, named Orca-1. In the processes of working to verify its size, Ecopetrol found two previously unknown natural gas deposits, raising hopes that the country will still be able to expand its offshore gas production.

Investors had a mixed reaction to the news. Shares fell as much as 1.7% in Bogota trading before rising 0.4% at 10:40 a.m. local time. Bonds due 2033 are slightly higher.

The news is “bittersweet,” said David Angel, co-founder of Energy Transitions SAS consultancy. While it’s positive that the exploratory frontier for natural gas has been expanded, Ecopetrol was unable to confirm the commercial viability of the Orca block, he said.

“That was the news that the country was waiting for, especially at this time when there is talk of a possible loss of self-sufficiency in the coming years,” Angel added.

President Gustavo Petro has stopped awarding new oil and gas exploration licenses as part of a pledge to wean the nation off of its dependency on fossil fuels. Even so, the Andean nation is using existing licenses to develop the deep-water fields of its Caribbean waters in hopes of reversing declining reserves.

Some forecasts see Colombia’s gas demand surpassing supply by 2028.

Colombia’s Caribbean waters include the Gorgon block Ecopetrol shares with Shell Plc and the Uchuva block that it operates with Brazil’s Petrobras.