Right-wing presidential win could unlock Colombia's oil and gas sector: analysts

Colombia's upcoming presidential election on June 21 could reopen the country's oil and gas industry if far-right candidate Abelardo de la Espriella wins, although passing any reforms would face serious obstacles, according to industry sources.

De la Espriella led the May 31 election against Iván Cepeda but did not secure a majority, resulting in a second-round election on June 21.

Cepeda is an ally of the current President Gustavo Petro, who took office in 2022, pledging to reduce Colombia's dependence on fossil fuels, halt the awarding of new oil and gas exploration contracts and advance the transition to renewable energy.

Colombia's crude and condensate production has gradually declined from over 1 million barrels/day in mid-2015 to 762,000 b/d in April 2026, according to S&P Global Energy CERA data. As a result, Colombia has become more dependent on energy imports.

The production decline is attributed to a combination of lower investment, logistical challenges and public order issues in the producing regions, according to analysts.

"Petro's main banner was to be against the industry, and he worked hard to send the message to communities that companies were the enemy," said Silvia Ardila, director for Latin America at Speyside, an international advisory firm specializing in corporate affairs and public policy.

If De la Espriella is victorious, he has promised he will "unlock the regulatory door," and there is hope he could do it, Ardila said.

Oil industry supporters hope the right-wing "outsider" could take the necessary measures to "put the house in order," he said.

GeoPark looks to fracking

Felipe Bayón, CEO of Colombia-based GeoPark, said on June 3 that there is a greater possibility that Colombia will allow fracking if the government swings to the right.

Bayón said that this is where Vaca Muerta serves as an example for Colombia, given that Argentina went through a similar decline under a leftist government and poor conditions, which turned the country from a net exporter into an importer. That changed with better conditions and the development of Vaca Muerta, which Bayón said is now producing five times more natural gas than all of Colombia.

This anti-hydrocarbon political stance in Colombia was a driver for GeoPark to buy two blocks in Vaca Muerta in 2025, where it aims to take production from zero to 20,000 barrels of oil equivalent per day by 2028.

This experience can then be applied to shale plays in Colombia, such as La Luna.

"After Sunday's elections, we are a bit more hopeful that the new government will support the industry and allow fracking in Colombia," Bayón said.

Growth is also coming from other Latin American countries, notably Brazil and Guyana.

Maria Fernanda Raggio, exploration director with Argentina's YPF, said on June 3 that with the surge in international oil prices this year, with war in the the Middle East disrupting global supplies, more companies are looking for alternative sources to grow production and taking more risks in exploration.

"The South Atlantic is becoming a very important hotspot," she said. "The global scenario is making this possible."

More companies have been looking at this region since large offshore oil was found in Namibia starting in 2022, she said, pointing out that all the deep-water acreage in Uruguay is fully licensed.

Uruguay is seeing a rise in farm-in deals on the back of big discoveries in Namibia, with US-based APA preparing to drill a well that could unleash more drilling in the undeveloped deep-water basin, Pablo Gristo, exploration and production manager of the national oil company ANCAP, said on June 3.

Quick response

In 2024, Colombia's proven oil reserves was 2.04 billion barrels, according to the National Hydrocarbons Agency.

If a new government were to ease restrictions, the sector's response could be almost immediate, Andrés Felipe Calderón Sánchez, vice president for Latin America at energy consultancy Welligence, said.

"It's a very elastic industry," Calderón Sánchez said, noting that in the past, drilling has significantly increased when conditions are favorable.

There was a drought in licensing during the Petro administration, but there had been plenty of contracts awarded before, which had not been fully developed, Calderón Sánchez said.

"There is an inventory, but participants have been reluctant to fully commit to their development," Calderón Sánchez said. "If they fulfill their commitments, then activity would increase with what is already on the table."

A larger opening, which would include new rounds, would take time, he said.

More fossil fuels

The hydrocarbons sector remains paramount for Colombia, as the country is set to increase its reliance on fossil fuels to face El Niño, according to Andrés Duarte, head of financial analysis at Corfi Colombiana, a Bogotá-based investment bank.

According to International Monetary Fund estimates, hydrocarbons account for about 35% of exports and roughly 10% of fiscal revenues.

Roughly 90% of Colombia's electricity is produced using hydroelectric infrastructure.

However, when rainfall falters, the country has to resort to other fuels, such as gas, Duarte said.

"The country already uses more natural gas; the current deficit will increase given the need to generate electricity using thermal plants, and offshore gas will be available by the end of the decade, at best," Duarte said.

Colombia's Ecopetrol has partnered with Brazil's Petrobras to increase gas production from the GUA-OFF-0 block in Colombia's offshore Guajira Basin.

Petrobras made its third natural gas discovery offshore Colombia earlier this year, the company said on March 18.

In December 2024, Petrobras and Ecopetrol estimated that the deposit could hold as much as 6 trillion cubic feet of gas in place, which would triple Colombia's gas reserves.

Potential challenges

If elected, de la Espriella will face challenges opening the oil and gas industry, observers say.

The first thing a new government must do is gain the industry's trust and provide security, Calderón Sánchez said. The incoming president would also have to find cooperation with the other powers in the country, like Congress, he said.

The election is far from decided, and victory could go to either candidate, observers say.

"The population is deeply polarized; the two candidates offer very opposing options, and there are many people who do not feel identified with any," Ardila said.

For their execution, all projects must obtain authorization from communities via consultations, which come on top of a regulatory burden that is already seen as long and complex, observers said.

The de la Espriella team has proposed that the government could accompany private players during the consultation process to make it smoother.

"Consultations must be redesigned so that all interaction between the communities and the private sector always be mediated by the government," José Manuel Restrepo, who would become vice president of Colombia if de la Espriella were to win the runoff, said.

"The public sector has become absent from the consultation process, we have to involve it [...] if we don't do it, we will stay the same," Restrepo said in a June 3 interview on Bogata-based Blu Radio.