Six Oil Majors, Including Shell, Withdraw from Colombia Amid Regulatory and Market Uncertainty

Shell’s recent decision to sell its 50% stakes in Colombia’s Fuerte Sur, Purple Angel, and COL-5 offshore gas blocks, as confirmed by Ecopetrol and reported by ColombiaOne.com, marks the latest chapter in a growing trend of international energy companies leaving Colombia.

Shell joins BP, ConocoPhillips, Occidental Petroleum, Chevron, and ExxonMobil, all of which have reduced or ended their upstream operations in the country over the past decade.

Shell’s withdrawal highlights two hard realities: regulatory uncertainty and commercial viability. Company leadership in Colombia pointed to regulatory barriers and persistent delays as key obstacles, noting that each year of delay erodes a project’s value by 10–15%.

The government’s policy to halt new oil and gas exploration contracts has further limited the sector’s outlook. Shell determined that the gas reserves discovered, while technically viable, were not large enough to justify the massive investment required for full-scale development.

These projects would have needed expensive subsea pipelines and new processing plants, costs that proved too high given the reserves’ scale. The exit of global majors comes as Colombia faces a mounting natural gas deficit.

Ecopetrol projects a shortfall of 120 billion BTU per day in 2025 and up to 300 billion BTU per day in 2026. Proven gas reserves now cover just over six years of consumption at current rates.

Colombia Faces Energy Crossroads as Gas Imports Surge

Domestic production has declined, with key fields like Cusiana, Cupiagua, and La Guajira dropping from 550 to 425 GBTU per day in the past year. Colombia imported a record amount of liquefied natural gas in 2024, with imports making up almost 20% of consumption.

This growing reliance on imports exposes Colombia to higher energy costs. Imported gas can cost up to three times more than domestic supply, and retail gas prices have already risen sharply in cities like Bogotá and Medellín.

The regulatory framework allows energy companies to pass these costs to consumers, but political pressure is mounting as businesses and households feel the impact.

Ecopetrol, now the main player left in Colombia’s upstream sector, reported a record increase in proven reserves in 2024, reaching 1.89 billion barrels of oil equivalent.

However, most of its 2025 investment budget—set between 24 and 28 trillion pesos—is focused on maintaining current production rather than expanding reserves.

The company is also advancing the Sirius-2 offshore gas project, which could triple national gas reserves by 2029 if development proceeds as planned. Colombia’s push to transition away from fossil fuels, while intended to support environmental goals, has created a paradox.

The country now imports more gas, increasing costs and carbon emissions, while risking energy security and economic competitiveness.

The exit of international oil majors underscores the uncertainty facing Colombia’s energy sector and raises questions about the country’s ability to balance its energy transition with the need for affordable and reliable supply.

More: Colombia news in English, every day from The Rio Times.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error