Next year to be 'decisive' for Colombia oil, industry says

BOGOTA, Nov 15 (Reuters) - Next year will be decisive for Colombia’s oil and gas industry, as efforts to increase exploration and production move ahead in the midst of problems with community relations and security, industry experts said.

The Andean country’s government is currently holding its second oil auction of 2019, the cornerstone of its push to attract new oil investment.

“I think it will be a better year. I think many of the decisions that the government has taken, especially to reactivate oil and gas activity, will start to bear fruit,” Francisco Lloreda, the head of the private Colombian Petroleum Association (ACP), said earlier this week on the sidelines of an annual oil and gas conference in Bogota.

“It is a decisive year for the industry in many ways,” Lloreda said.

Companies have long struggled with fraught community relations and security issues, including the relentless bombing of pipelines by leftist rebels and protests that shut down production.

The ACP has previously warned that $700 million in oil company spending is frozen because of contract delays caused by protests and prior consultation processes, slow environmental licensing and court orders.

Those difficulties are the principal challenges for the industry next year, Luis Miguel Morelli, head of the national hydrocarbons agency, told Reuters on Thursday, adding the government will continue to promote the country to investors in 2020.

“We have been to Canada and the United States but we need to go to Asia and Oceania, also to other European countries, to bring in investors,” Morelli said.

Offshore projects, though shielded from many community and security complications, present expertise challenges, said Ian Gordon, Noble Energy’s general manager for Colombia.

Noble is set to drill its first Colombian well next year in the Caribbean and is qualified to bid in the current oil round, which includes five offshore blocks.

“There’s just a lack of experience in the offshore in Colombia,” Gordon said at the conference on Friday. “What we have to do is work together with the government to increase the knowledge and experience with how things work in the offshore. And that’s not a next year thing, that’s going to be over the next few years.”

Colombia has around 2 billion barrels of oil reserves and produces about 880,000 barrels per day of crude, half of which are exported. (Reporting by Julia Symmes Cobb; Editing by Steve Orlofsky)