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Columbia energy report


HIGHLIGHTS IN COLOMBIA Colombia is significantly investing in exploration and production and transport infrastructures, aiming at increasing its reserves and exports in the following years. The hydro and gas power generation projects seem sufficient to cover the rise of domestic demand. Latin America’s total energy production slightly fell by around 2%. Again hydrocarbons producing countries of which Venezuela and Mexico were more largely impacted. Furthermore the net exporting region Latin America experienced a cut of -4% in its trade surplus. WHAT YOU WILL FIND IN THIS REPORT The Colombia energy market report is a reliable source for understanding the key issues and dynamics shaping the Colombian energy industry. With timely, up-to-date energy industry data and demand forecasts, this report will help you identify and exploit challenges and opportunities in the Colombian energy sector. The report details the sub-sectors of the energy industry (Crude Oil, refined oil products, Natural Gas, Coal, Electricity and Renewable) in Colombia. In this report you will find: -Multi-energy approach: oil, oil products, gas & LNG, power, coal, renewable -Recent energy and climate change policy development, and an assessment of its impact -Key companies operating in each sub-segment of the Colombian energy industry, and assessment of the competitive landscape. -Up-to-date insight on market structures, regulatory developments, and asset developments -Supply & demand overview and trends, with a detailed breakdown by energy and by sector -Historical data and trends relating to production, consumption, imports, exports and reserves for each industry sub-segment -Energy projects under development in the country -Key drivers of change and future issues for each energy type MAIN REASONS TO BUY THIS REPORT -Identify key companies activities and strategy in the Colombian market -Work with data-driven market research -Follow market dynamics and future

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									Colombia energy

Latest update: July 2010

Table of Contents

LIST OF GRAPHS & TABLES                                              2

INSTITUTIONS AND ENERGY POLICY                                       3

ENERGY COMPANIES                                                     4

ENERGY SUPPLY                                                        6

ENERGY PRICES                                                        7

CONSUMPTION                                                          7

ISSUES AND PROSPECTS                                                 7

GRAPHS & DATA TABLES                                                 10

Colombia Energy Report – Copyright© Enerdata – All rights reserved        1

List of Graphs

Graph   1:   Installed Electric Capacity by Source (2009, %)
Graph   2:   Power Generation by Source (2009, %)
Graph   3:   Consumption trends by Energy Source (Mtoe)
Graph   4:   Total Consumption Market Share by Energy (2009, %)
Graph   5:   Final Consumption Market Share by Sector (2009, %)
Graph   6:   Primary Consumption since 1970

List of Tables

Table 1: Economic indicators
             Population, GDP growth
             Imports & exports
             Inflation rate, exchange rate

Table 2: Supply indicators
              Oil & Gas proven reserves
              Electric & refining capacity detailed by source
              Production by energy source
              Power production by source
              External trade by energy

Table 3: Demand indicators
             Consumption / inhabitant
             Consumption trends
             Total consumption by energy
             Final consumption by energy and by sector
             Electricity consumption by sector
             Energy security indicators
             Energy efficiency indicators
             CO2 emissions

Table 4: Energy Balance
             Total energy balance
             Detailed energy balance by energy

Colombia Energy Report – Copyright© Enerdata – All rights reserved   2
INSTITUTIONS AND ENERGY                                          programme (banks and telecommunications)
                                                                 that also concerns the energy sector.
                                                                 The main strategies set out for the country in
The energy sector is under the responsibility                    the     aforementioned           plan       include       the
of the Ministry of Mines and Energy                              promotion of energy efficiency and energy
through the UPME (Unidad de Planeación                           substitutions (in particular in favour of gas),
Minero Energética), created in 1994. UPME                        the development of energy infrastructures
is in charge of approving energy investments                     and the optimisation of the contribution of
through the CONPES (Council of Economic                          energy exports to the country’s economic
and    Social    Policy),     in    which     all     major      development.
ministries are represented, and is responsible
for the planning of the sector.                                  As regards hydrocarbons, the State owns the
                                                                 country’s reserves.
A public agency, Ecocarbon, was created in
1993 to manage the development of coal                           Electricity
resources     and    to     promote       coal      projects     Since   the       adoption      in   1994     of   a     new
(power plants).                                                  Electricity Law, private companies have been
                                                                 allowed to produce and distribute electricity.
The    former    nuclear      energy       agency       was      The law, enacted in a context of electricity
transformed and is now in charge of energy                       shortages,     was       aimed       at   improving       the
efficiency and new energies (INEA).                              sector’s productivity by enhancing private
                                                                 production        for    new     power       plants      and
The     Energy          and        Gas      Regulatory           management contracts for existing units.
Commission (CREG) was created following
the adoption of the electricity law in order to                  Gas
define the legal and institutional framework.                    In    1993    a     plan    was      adopted       for    the
The CREG split the market into four activities:                  development of the gas sector («Plan de
generation,     transmission,        distribution       and      Masificación del Gas»). Over a period of 12
marketing, and set up rules to support                           years, and at a cost of $4.4bn, it made it
competition. The CREG also set up a tariff                       possible to connect several million dwellings
policy and created two categories of users,                      to the network, and to construct an important
according to whether they are regulated or                       transport infrastructure. Today the network
not.                                                             connects the Atlantic coast fields to the
                                                                 country’s main cities. Moreover, gas prices
A National Hydrocarbons Agency (ANH)                             could    soon       be     liberalised.     This        would
was created in 2003 to manage the country’s                      encourage investments by foreign producers
oil resources; it is attached to the Ministry of                 who currently criticise the lack of profitability
Mines and Energy. In 2004 the ANH launched                       caused by the low gas tariffs.
new exploration contracts that were more
advantageous for companies interested in                         Oil
carrying out exploration activities.                             In    1999    the       State   implemented         a    new
                                                                 legislation         on          exploration-production
Since the adoption in July 1991 of a new                         activities with the objective of attracting
constitution, Colombia has officially operated                   foreign investors to the Colombian market.
under a mixed economy system, and has                            The said law authorises private companies to
liberalised      foreign       investments.             The      sign exploration-production contracts with
Government        has     started     a     privatisation        the national company, allowing them to
                                                                 acquire a maximum stake of 70%, and to

Colombia Energy Report – Copyright© Enerdata – All rights reserved                                                         3
extend the contracts to 28 years. Moreover,                      gasoline was around 6.9%; it should reach
2002 saw the approval of a law that provides                     10% in 2011.
for the adjustment of oil royalties to the                       As of 2012, all new gasoline vehicles should
production level of the fields: between 8% for                   be flex-fuel vehicles.
a production under 5,000 bl/d and 25% for a
production over 600,000 bl/d (until then a
fixed    rate    of     20%     was      applied).     Those
                                                                 ENERGY COMPANIES
measures are necessary in view of the fact
that     the     country’s     reserves        have     been
declining since 1997 and could, in the long
                                                                 Since      the     liberalisation     of     the     sector,
term,     be      too    low        to   meet     domestic
                                                                 electricity has been produced, transported
                                                                 and distributed by many different companies.
                                                                 There    are     45    players       on the       electricity
Oil production (as well as coal production) is
                                                                 production market. Three companies hold
a regular target for guerrilla attacks, which is
                                                                 around      half      of    the   installed        capacity:
why in July 1992 the Government introduced
                                                                 Empresas Públicas de Medellín (EEPM,
a “war tax" to finance the protection of those
                                                                 public status, with 2600 MW), EMGESA
areas ($1 per barrel for light crude, $0.55 for
                                                                 (private     status,       2100   MW)       and     Isagen
heavy crude and US15 cents/t for coal). The
                                                                 (public, 2300 MW). The other large producers
tax does not affect the fields brought into
                                                                 are: Corelca (public, 1390 MW of thermal
production after 1995.
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