Colombia natural gas industry falters under Petro policies and falling reserves
Subscribe to our free newsletter today to keep up to date with the latest energy, oil and gas news.
Colombia is confronting a mounting energy crisis as shrinking reserves and falling production strain the Colombia natural gas industry, forcing the country to rely increasingly on costly imports. The deterioration comes amid sweeping energy reforms under President Gustavo Petro that have reshaped the investment climate and accelerated structural pressures on domestic supply.
Proven reserves have declined sharply over the past decade. After peaking at 5.7 trillion cubic feet in 2012, Colombia’s natural gas reserves fell to just over 2 trillion cubic feet by 2024, leaving less than six years of production life at current output levels. At the same time, consumption has continued to rise, widening the imbalance between supply and demand.
Natural gas plays a central role in Colombia energy security. It fuels gas fired power plants that supplement hydropower, which typically accounts for around 60 percent of electricity generation. It is also widely used by households for cooking and heating in a country where poverty levels remain high and affordable energy access is essential for social stability.
Production declines and policy shifts weigh on supply
Domestic output has weakened significantly since reaching a high of 1.1 billion cubic feet per day in early 2020. By December 2025, production had fallen to 693 million cubic feet per day, reflecting both natural field decline and policy driven investment retreat. Mature reservoirs are aging, and a large share of Colombia’s gas output is associated gas produced alongside crude oil.
As oil fields mature, decline rates accelerate, prompting operators to deploy enhanced recovery methods such as water flooding and gas injection. Reinjection of associated gas helps sustain oil output but reduces commercially available gas volumes. Estimates suggest that between half and four fifths of associated gas production is reinjected to maintain reservoir pressure, further constraining market supply.
The decline in Colombia natural gas production has also been linked to a sharp slowdown in exploration activity. Petro energy policy has halted the awarding of new exploration and production contracts and increased taxes on extractive industries. Those measures have dampened investor confidence and led several foreign energy companies to scale back operations or reconsider their presence in the country.
Fewer new discoveries and reduced capital spending are compounding the structural depletion of mature fields. Without fresh development, the reserve base continues to shrink, undermining long term Colombia energy security and raising questions about the sustainability of domestic supply.
Rising demand intensifies Colombia energy crisis
While supply contracts, demand has climbed. Electricity consumption has increased in line with economic growth and urbanization. Hydropower output, which depends heavily on rainfall patterns, has proven vulnerable to climate variability. Periods of drought have reduced water levels, forcing greater reliance on thermal generation fueled by natural gas.
At the same time, aging coal fired plants are being replaced or converted to gas fired facilities as part of the government’s energy transition strategy. Although aimed at lowering emissions, the shift has raised gas demand at a moment when domestic production is faltering.
The resulting imbalance has forced Colombia to expand imports of liquefied petroleum gas to meet shortfalls. Imports have surged since 2016 and reached record levels in 2024 and 2025. In 2024, Colombia imported more than 94 billion cubic feet of LPG, nearly triple the volume recorded a year earlier. In 2025, imports climbed further to roughly 154 billion cubic feet equivalent, underscoring the growing reliance on foreign supply.
This dependence exposes the economy to global price volatility and currency risk. Imported fuel is significantly more expensive than domestically produced gas, contributing to rising consumer prices and inflationary pressure. In December 2025, several major cities recorded natural gas price increases above the national average, with Bogota experiencing nearly 17 percent inflation for the fuel category.
Higher energy costs ripple through industry and households alike, weighing on economic activity and household budgets. For a country already grappling with fiscal constraints and social challenges, escalating energy prices add to macroeconomic strain.
Limited relief from offshore prospects
Hopes for relief have centered on the Sirius gas discovery in the Guajira Basin offshore in the Caribbean. The project, led by Petrobras with Ecopetrol as a major partner, is targeting reservoirs estimated to contain billions of cubic feet of natural gas. Development costs are projected at 5 billion dollars, with first production expected around 2030.
While the block is believed to hold substantial resources, timelines and capital requirements mean it cannot address immediate supply gaps. Forecasts indicate that, without significant new domestic sources, Colombia could face a supply deficit equal to more than half of projected demand by 2029.
The trajectory of the Colombia natural gas industry now hinges on whether policy adjustments can restore investor confidence and stimulate exploration. Without renewed drilling and reserve replacement, the Colombia energy crisis is likely to deepen, locking the country into greater import dependence and sustained price pressure. The intersection of Petro energy policy, declining reserves and rising demand has created a structural imbalance that will require decisive action to reverse.
