CERAWEEK: Brazil, Colombia adjusting upstream portfolios as energy transition strategy

The state oil companies of Brazil and Colombia are beginning to focus on gas in order to adjust to energy transition, while Mexico keeps its dependency on imports, executives said March 2 on the second day of CERAWeek by IHS Markit.

Colombia's Ecopetrol is increasing the competitiveness of its portfolio to avoid stranded assets and diversifying into natural gas, said Juan Manuel Rojas, the company's corporate vice president of strategy and business development.

"We are increasing the participation of gas to the overall upstream portfolio from 20% today to 35% by the end of 2030," Rojas said.

The company is also accelerating the decarbonization of its operations and diversifying. It has announced the first renewable power generation projects and will analyze energy transmission, he said.

Petrobras is abandoning the onshore and shallow-water operations to concentrate in deepwater and ultra-deepwater, where the company feels it has a competitive advantage, said Rafael Chaves Santos, chief strategy officer.

"We are focusing our portfolio on ultra-deepwater, pre-salt, where lifting costs are $4/b and selling assets in shallow water, where costs are higher," Chaves Santos said.

The company has also identified there will be an increase in the production of associated gas in the future, which could stop the region's dependency on imports, but said there needs to be a regional view to the issue.

"This market needs a lot of investment in infrastructure, and that takes time. We must have very stable rules for private investment to flow," Chaves Santos said, adding that the dependency on imports will not change in the short term.

Mexico, in contrast, will continue to depend on gas from the US, despite its huge reserves and potential, said Ulises Hernandez-Romano, CEO of Pemex' trading arm PMI.

"The low price of the gas in the US has made it difficult for non-associated gas projects in the country to take off, but the potential is there," Hernandez-Romano said, adding that for those reserves to be exploited, a big shift from the government's policy is needed.