GLOBAL ENERGY CRISIS,

AN OPPORTUNITY FOR COLOMBIA

O&G Upstream Advisory

Andres Mesa
 Classic Economy : Q = 𝑓(K.L)

Energy Oxygen
Energy Return on Energy Invested (EROI)
EORI

Energy
Energy is not part of the Economy

Energy IS the Economy

Energy Surplus IS Development

 Needs

To Heat
To Transport
To Power
(since 1890)
 Final Energy Use

800 – 1500 °C
 84%
of Energy
Comes from
fossil fuels
Why are we in an Energy Crisis??

Energy Waste
Global CO2 Emissions
Supply constrains

Avoid
90%
of energy
sources
O&G Climate Enemy

From WoodMac 2020

O&G: Not such a good business at all
Upstream O&G Capex

Oil company capital spending has been dropping since the

mid-2010s, making it hard to ramp up new production
quickly as economy rebounds From Rystad 2020
Capital Discipline and focus on shareholders returns and buybacks

EBITDA
The market has pressed oil
and gas producers to cut
capex, and shift their cash to
financial goals like paying
down debt and boosting
Capex dividends, as well as de-
carbonization

From S&P Global 2022

Consolidation to improve efficiency

From WoodMac 2021

Changes in the upstream landscape
O&G energy supply ecosystem changed

• Risky business in the long-term => Short-term cycle

• Less money => Only good projects get approval
• Consolidation and IOC’s retreat => Less competition
• ESG target (Scopes 1&2 / 3) => Cleaner projects are prefered
Electricity

Demand
Germany Electricity Output from Onshore Wind

380 MW generated out of 56.000 MW installed capacity (3rd world largest!!)

Solar and Wind are NOT there when needed!!!

Supply constrains
Energy Demand growth
Future….

Energy
Waste
Surplus
Energy Demand Vs Human Development Index
World Energy Demand Forecast

Coal&Gas

From Woodmac 2021

Oil Demand
Gas Demand

2/3 for Electricity Gen

1/3 industry
 • Coal 10GT CO2 out of 33 Gt per year
Electricity from Coal • Electricity generated 9.000 TWh
• 12 Countries account for 92%

Coal Power Plants

Steel
Cement
 Low GHG
Emissions

Is there
when needed
Low Cost • Stored
• Transported
ourworldindata.org
 Colombia: Energy Context
(5.300 UK 1.200 EJ / year
3.500 Spain)

Industries and Cooking (No home heating required)

320 TWh UK
240 TWh Spain 75 TWh/y Already clean and reliable

Light Vehicles and Lorries

No trains.
Gas / Coal CCS
H2 Oil +
Electricity Electricity
Biofuels
Synfuels
H2

Gas / Coal (CCS) Solar & Wind

Nuclear (SMR) Geothermal
Hydro
Can we offer energy to the world?
✓ Conventional fuels for transport (Oil), Feedstock (Oil Gas and Coal)?

✓ CCS solutions for hard to abate sectors that use Gas and Coal?

✓ Excess of clean, cheap and reliable electricity?

✓ Hydrogen for heating and transport (shipping and aviation)?

Oil Production

7.6 mmbo/d 6.8 mmbo/d

6.5 mmbo/d
3.6 mmbo/d

2.9 mmbo/d

Not including Middle East, Russia, North America From Yearbook Enerdata
Stability
O&G offer

Short-Cycle projects
• Mature basins
• Infrastructure already built
• Different type of plays
ESG options
• Scopes 1 & 2 emissions projects
• Scope 3 emissions offset projects
(reforestation)

Oil Gas Oil Pipes Gas piipes

O&G

• Advanced seismic reprocessing and QI

• Asses deeper / shallower reservoirs
• Re-evaluate old concepts
• Next door basin or basin edges
• Free up data!! More eyes = more ideas
• Fewer Competitors… Why bid rounds?
• Ultradeep Water (Namibia 10 billion @3km)

Free Areas Taken Areas Oil & Gas Fields

Electricity
Electricity consumption per year 75 TWh

Coal Power Plants

Gas Power Plants

From EIA 2020 UK 320 TWh / Spain 240 TWh

Offshore Wind
Offshore wind roadmap launched in 2022.
Development potential of 50 GW (Current UK Inst Cap 10GW)

Wind Speed monthly avg

Wind Speed
map

Taken from Windeurope.org and Offshore Wind Road map Report

A Comparison of the UK Offshore Wind Resource from the Marine Data Exchange
Solar Photovoltaic Power Potential
Installed Cap 1 GW

Installed Cap 15 GW

Solargis.com
Hydrogen Potential
Colombia launched the H2 roadmap in 2022
• Decarbonise domestic heavy transport
• Have 1-3GW of RE to produce H2 in 2030
• Produce 50 Kt of blue H2 by 2030

Maritime shipping routes

Legal Framework

• Energy Transition Law: Tax incentives for RE investments

• Offshore wind Roadmap was launched in 2021
• Three successful auctions (2019 – 2021) for Solar and onshore wind
projects. From 0.2 GW in 2018, to 4 GW operating in 2024. (18 GW
country’s total)
• There are 6 structured projects for offshore wind ready to set up an
auction
Colombia: Geothermal

Classic Geothermal project:

• High risk - Low Return
Technology using heat fluid exchanger
• Low Risk – Low Return

Legal framework for Geothermal was

launched in 2022. O&G companies can
now apply to officially use the
geothermal resource within their
acreage

Vargas et al 2020
CCS

Offer a legal framework & carbon market

for
• Heavy industries that produce CO2
• Gas power generation
• Blue H2
Carbon Markets

UK first CCS licensing

round 2022
North Sea Transition
Authority
Colombia: Green Investment
Gas / Coal CCS
H2 Oil +
Electricity Electricity
Biofuels
Synfuels
H2

Gas / Coal (CCS) Solar & Wind

Nuclear (SMR) Geothermal
Hydro
GDP: 331 Bn usd 314 Bn usd
Pop: 90 mill 50 mill
Electricity Consmp: 160 TWh /year 75 TWh/year
Electricity Gen : 95% Gas 68% Hydro 20% Gas
Min Wage: 144 USD/month 240 USD/month
Oil Production: 685 kbopd 750 kbopd
Oil Consumption: 877 kbopd 400 kbopd
Gas Production 1742 BFC /year 365 BCF/year
Gas Consumption: 1.642 BFC/year 375 BCF/year
Offshore wind pot: 166 GW 100 GW
Egypt : O&G

Biogenic Gas
Miocene Turbidites
12 years / 10 Expl Wells
No Commercial Disc
2013 Bid Round
Deep – Ultradeep Water
Biogenic Gas
New concept
Miocene-Creta Lmst Build-up
Zohr 30TCF 2017
RE: Gulf of Suez Economic Zone
• 40 bn USD worth in contracts to
produce H2 (blue and green) and
green ammonia

• CCS in depleted gas fields for:

• Biofuels production
• Production of biodegradable
plastic
• Polyethylene production from
waste
• Legal & Tax Framework
• Infrastructure
• Energy
Can we offer an energy hub??

✓ Oil and Gas for short-cycle projects plus great offshore gas potential

✓ Provide more clean, reliable and cheap electricity (Hydro + Gas + RE)

✓ Use excess of renewable electricity to produce H2

✓ CCS hubs and a carbon market for hard to abate industries

✓ Offer off-grid electricity solutions for industries (Solar, Geothermal)

✓ Carbon bonds in the Amazon for emissions offsets

Energy Surplus = Growth = Opportunities
Thank you!