Can Fracking Reverse Colombia’s Oil and Gas Decline?

Colombia’s economically vital petroleum industry is in a death spiral. Oil and natural gas production is falling despite efforts to boost output and grow efficiencies. New President Abelardo de la Espriella, a former criminal defense attorney, has put energy security and hydraulic fracturing, better known as fracking, firmly back on the agenda. A fierce battle reemerged over plans by the new administration to introduce fracking as a means of arresting Colombia’s declining hydrocarbon output.Colombia has a long and contentious history with the controversial hydrocarbon extraction technique, known as hydraulic fracturing or fracking. Indeed, by 2018, Colombia’s highest administrative tribunal, the Council of State, had imposed a moratorium on fracking. While the court finally conceded to the operation of fracking pilots in the Andean country, they were never completed, leaving considerable uncertainty over the viability of fracking in Colombia.After taking office on August 7, 2022, De la Espriella’s predecessor, President Gustavo Petro, fought to formally prohibit fracking because of the serious environmental risks the technique poses. This formed part of his reforms aimed at reducing Colombia’s heavy dependence on hydrocarbons, which are a major export and dominate the country’s energy mix. Despite Petro’s efforts foundering in Congress, including a last-ditch July 2026 attempt to secure a nationwide ban, opposition to fracking is fierce.It was Petro’s sweeping shift in energy policy that forced Colombia’s national oil company, Ecopetrol, to suspend two fracking pilots it was developing with ExxonMobil in the Middle Magdalena Valley. The consequences of those reforms, which aimed to reduce Colombia’s considerable dependence on fossil fuels, are reverberating through the economy. Oil is the Andean country’s largest export and a crucial source of fiscal revenue, making Petro’s disruption of the sector increasingly costly for a country facing significant economic headwinds.Petroleum is a cornerstone export generating $7.7 billion, or 28% of total export earnings, during the first half of 2026. For decades, oil rents underpinned government finances, accounting for more than a tenth of Bogotá’s income. That revenue began drying up in 2022 as Petro hiked taxes on extractive industries, froze new drilling contracts and committed to prohibiting fracking. As a result, nearly all drillers operating in Colombia slashed capital expenditures while others, including ExxonMobil, exited the Andean country.The revenue shock struck Bogotá at the worst possible time, leaving government coffers under mounting pressure. Tax receipts were collapsing just as escalating violence drove security spending sharply higher, delivering a brutal blow to government finances. The fallout is already showing with fears that the 2026 budget deficit will blow out to a record 8.1% of GDP, creating a dangerous fiscal squeeze. While the fiscal gap widened under Petro, it could rise further as De la Espriella pours more money into a broad military offensive against illegal armed groups.Despite concerns that fracking will cause severe, potentially irreversible environmental damage, the hydrocarbon technique offers Bogotá the ability to restore Colombia’s energy self-sufficiency while shoring up battered finances. This couldn’t come at a more critical time, with hydrocarbon reserves and production plummeting to dangerously low levels. Data from Colombia’s National Hydrocarbon Agency (ANH) shows proven oil reserves fell nearly 1% year on year to just 2.02 billion barrels at the end of 2025.Natural gas reserves fared worse, plunging 17% year on year to 1.717 trillion cubic feet, a multidecade low that leaves Colombia with barely six years of supply at current production rates. It is Colombia’s growing vulnerability to a severe energy crisis driven primarily by a natural gas shortage, that is causing the greatest alarm. Colombia is increasingly reliant on costly liquefied natural gas (LNG) imports, which already supply around a quarter of domestic consumption and are forecast to account for one-third by 2027.Surging LNG imports are piling further pressure on an already fragile economy. Colombia’s growing reliance on imported natural gas, coupled with dwindling domestic production, is driving prices sharply higher. Indeed, natural gas prices have surged by as much as 36% in some parts of Colombia over the past year. The industrial sector is bearing the brunt of dwindling domestic natural gas supplies and Colombia’s growing dependence on costly imports, because it is a key fuel for manufacturing.LNG is significantly more costly than domestically produced natural gas. There are considerable processing and transportation costs because the fuel needs to be frozen to such a low temperature that it is converted into a liquid. Then the LNG must be transported by specialist tanker vessels, which are costly to manufacture, maintain, and utilize. Upon arrival at its destination, the fuel must undergo regasification, a process that requires special costly terminal infrastructure.For those reasons, LNG sells at significantly higher prices than Colombia’s domestically produced natural gas. By late September 2026, the LNG spot price in Europe had risen to as high as $24 per million British thermal units (MMbtu). This is substantially more than the U.S. Henry Hub spot price of $3.25 per MMbtu. LNG prices will remain elevated for the foreseeable future because of conflict in the Middle East, especially after Tehran’s strikes disabled a significant portion of Qatar’s LNG processing facilities.Prior to February 2026, Qatar supplied a fifth of the world’s daily liquefied natural gas. Tehran’s March 2026 strikes wiped out around 17% of the tiny Middle East nation’s LNG processing capacity, which will take three to five years to repair. It is this that is behind the sharp, sustained rise in LNG prices around the world. Ongoing shipping disruptions in the Strait of Hormuz are compounding the impact, cutting off a chokepoint through which around one-fifth of the world’s oil supply passes.As a result, October and November 2026 contracts for LNG shipments to Colombia are priced 79% higher than February 2026. This sharp increase in prices will have a major impact on the Andean country’s fragile economy. Natural gas is not only a key household fuel but also a crucial source of energy for industry. The introduction of fracking in Colombia will resolve many of those risks and issues because the country possesses significant unconventional hydrocarbon potential.According to the U.S. Energy Information Administration (EIA), Colombia holds 6.8 billion barrels of technically recoverable shale oil and 54.7 trillion cubic feet of technically recoverable shale gas. Those tremendous unconventional hydrocarbon resources have never been exploited due to the considerable opposition to fracking in the country. If commercially viable, those resources will dramatically replenish Colombia’s dwindling hydrocarbon reserves and boost production, which will blunt the threat posed by an increasing dependence on imported fossil fuels.The primary geological body which contains significant volumes of unconventional oil and gas is the Cretaceous La Luna formation. For two decades, that geological body, which spans Venezuela, Colombia and Ecuador, has been evaluated for its shale oil potential. The Middle Magdalena Valley Basin, one of Colombia’s most prolific conventional oil-producing regions, is home to the La Luna Formation, believed to contain the country’s richest concentration of shale oil and gas.It was here, in Colombia’s petroleum heartland, that Ecopetrol and Exxon launched the controversial Kalé and Platero fracking pilots in Puerto Wilches, near Barrancabermeja. The basin’s organic-rich Cretaceous rocks hold an estimated 4.6 billion barrels of risked recoverable shale oil and 18.3 trillion cubic feet of shale gas, which could transform Colombia’s poor hydrocarbon outlook. If successfully developed, those vast unconventional oil and gas resources will replenish dwindling reserves, bolster energy security and ease pressure on Bogotá’s strained finances.Colombia’s new president pledged to revive the country’s hydrocarbon sector during his inauguration last month. De la Espriella went on to call energy security a matter of national sovereignty. He stressed that rebuilding state-controlled Ecopetrol, which he accused his predecessor of leaving weakened, was essential to unlocking Colombia’s petroleum resources. The new president confirmed, at his inauguration, that he will authorize fracking in Colombia, which is viewed as essential to boosting declining reserves and lifting production to levels that guarantee energy security.By Matthew Smith for Oilprice.comMore Top Reads From Oilprice.comTotalEnergies Targets 3% Annual Oil and Gas Growth Through 2030European Gas Prices Rally on U.S.-Iran StalemateUK Grid Operator Warns of Tight Power Margins