Venezuelan exports of natural gas to Colombia are unlikely in the short term, despite state-owned PDVSA's claims to have increased its gas production in 2015 by 334,000 Mcf/d or 4.3% year on year.
The increase was attributed to the startup of long-delayed production at the offshore Perla gas field operated by Spain's Repsol and Italy's ENI in partnership with PDVSA. The production figures were disclosed by analysts and company sources.
In July, Eulogio Del Pino, who wears the hats of PDVSA president as well as minister of oil and mining, said incremental production gains at Perla would enable the country to begin exporting gas to Colombia "soon." According to Del Pino, Perla is already producing 600,000 Mcf/d.
"Enough gas exists to meet domestic demand and to be able to export," Del Pino said. The optimism of Del Pino, however, is not shared by analysts, who question the official production figures.
"The Perla offshore field is not producing what was promised. Production of 450,000 Mcf/d was talked about at the end of 2015 and it has been barely able to reach production of 250,000 Mcf/d," said analyst Nelson Hernandez.
"Exporting natural gas to Colombia is not possible until PDVSA covers the domestic market deficit, which is 3 Bcf/d. If PDVSA meets all the investment plans for natural gas that it has announced, there would be a precarious (production) balance in 2020," Hernandez added.
Perla is located inside the Cardon IV block, situated 50 km west of the Paraguana Peninsula. It is part of the huge offshore project area in the Gulf of Venezuela known as Rafael Urdaneta.
Venezuela sees Perla as saving the country from a gas deficit that has been particularly severe since May 2014 when Colombia's Ecopetrol cut down exports that had averaged 200,000 Mcf/d since the 2007 opening of the Antonio Ricauter pipeline connecting Colombia's Guajira Peninsula with Maracaibo. Venezuela imported 37,000 Mcf/d of gas from Colombia in 2015.
Officials at PDVSA have said a portion of Perla's initial production will be exported to Colombia to comply with a prior agreement with Ecopetrol.
Colombia, however, is not counting on receiving any Venezuelan gas. In a hedge against its declining reserves, power generation companies in northern Colombia are building a $800 million LNG regasification facility due to begin operations later this year.
According to official figures, gas production in Venezuela increased 4.3% in 2015 to 7.76 Bcf/d from 7.422 Bcf/d in 2014.
PDVSA consumes 63% of its available gas, mainly to increase pressure in oil wells by re-injecting gas into reserves.
"In 2015, re-injection gas volume in oil fields was down 9.9% from the previous year because of the greater demand for gas to fuel (thermo-electric) power plants," according to an internal report produced by PDVSA's strategic planning vice president and seen by Platts.
"In 2015, PDVSA injected into gas fields an average of 2.460 Bcf/d, compared with 2.604 Bcf/d in 2014, a reduction of 144,000 Mcf/d, that was then redirected to the domestic market, (a decline that) negatively impacted the production of light crude," said Einstein Millan, a Venezuelan oil and gas industry analyst.
Said Millan: "The net increase in gas production, without counting the gas that was not injected, in any case would total only 190,000 Mcf/d, which in essence is what the Perla offshore field could have added in 2015 to national output, nothing more."
