Colombia Is Open for Oil Again. The Real Opportunity Is for Who Can Extract and Process It into Diesel.
Colombia's oil and gas sector is entering a new chapter. After four years of exploration freezes, tax hikes, and policy uncertainty under President Gustavo Petro, the country's new government has reversed course. Ecopetrol is executing an adjusted 2026 investment plan targeting up to $7 billion, with roughly 70% directed toward upstream oil and gas and as many as 430 development wells. International capital is paying attention again.
The opportunity is real. But operators who come to Colombia only to extract crude and sell it at commodity price are solving the easier half of the problem.
Oil production dropped to a multi-year low of 724,910 barrels per day in April 2026, the weakest showing since June 2021, and a long way from the country's peak of over 1 million barrels per day recorded in 2013. Colombia's total crude oil reserves shrank by 54 million barrels while natural gas imports skyrocketed to 31% of domestic consumption by 2025, up from just 3% in 2023.
To put the downstream dimension of that decline in perspective, the diesel crack spread, which historically averaged $20 to $30 per barrel, has surged to over $100 per barrel in recent weeks. That means the margin a refiner earns from converting crude into diesel now exceeds the price of a barrel of crude itself, a market signal with no historical precedent. The country that was once self-sufficient in energy is now structurally dependent on imports for the fuel its economy needs to function.
Falling domestic gas output and a looming El Niño drought are pushing Colombia toward costlier LNG imports and deeper energy insecurity. The Colombian Oil and Gas Association has warned that diesel may need to cover 9% of national electricity generation in an extreme El Niño scenario to prevent blackouts, because 65% of Colombia's power comes from hydroelectric plants that stop working when the rivers run dry.
Here is the paradox that the upstream revival alone cannot solve, Colombia exports crude at commodity price and imports diesel at market price. The gap between those two transactions is where the country loses value every single day. Attracting upstream investment closes part of that gap. It does not close all of it.
The operator who extracts and processes captures what Colombia is losing
The upstream revival Colombia needs will take years to translate into production. New contracts, environmental licensing, community consultations, drilling, completion, first barrel. That timeline is measured in years, not months. In the meantime, the crude Colombia already produces continues to leave the country as raw feedstock while the diesel it needs arrives as an expensive import.
Think Energy Holdings was built for exactly this configuration. As an exploration and production group with a patented, proprietary crude processing technology, the company does not stop at extraction. It converts crude oil and condensate into ultra-low-sulfur diesel at the point of production, on-site, in 90 to 120 days, without a pipeline to a centralized facility.
The combination matters for Colombia specifically. A group that can acquire upstream assets and deploy on-site processing closes both sides of the gap simultaneously: it adds to production and it converts that production into the fuel the country needs, rather than exporting raw crude and importing refined products back at a premium.
Colombia's national natural gas production fell 17.1% in 2025, while oil output declined 3.4%. The new government is doing the right thing by reopening the sector to investment. The operators who come with both upstream capability and downstream processing will do more for Colombia's energy security than those who come for the crude alone.
If your organization is evaluating upstream opportunities in Colombia and wants to understand how on-site processing changes the economics of field development in the current environment, reach out at gothinkenergy.com.
