On February 22, Colombia confirmed that state-owned energy corporation Ecopetrol SA is currently not legally qualified to launch natural gas supply shipments from neighboring Venezuela.
Minister of Mining and Energy Edwin Palma said that this strategic transaction requires a special license from the US Office of Foreign Assets Control (OFAC), which the company currently cannot own.
Besides the license barrier, another huge obstacle is the serious degradation of the gas pipeline connecting the two countries. This infrastructure system requires a comprehensive overhaul before it can be put into commercial operation.
In a press conference, Minister Palma admitted that time is running out for national energy security, and applying for a new license from the US government will be an extremely complex and lengthy process.
This stagnation has dealt a heavy blow to the efforts of President Gustavo Petro's administration in the context of Colombia's domestic gas reserves declining at an alarming rate.
To maintain the production machinery for industrial complexes and meet the essential living needs of the people, this South American nation is currently forced to purchase large quantities of expensive liquefied natural gas (LNG) in the international market. Notably, this deadlock occurred just weeks after the first direct meeting between Mr. Petro and US President Donald Trump at the White House in early February.
Despite shuttle diplomacy efforts and high-level visits to Caracas, the prospect of rapidly restoring regional energy flows remains extremely bleak due to administrative obstacles. Colombian officials admit that the new licensing process is too cumbersome and completely unable to meet the urgent needs of the power grid system.
The country's energy industry is struggling to prepare for a scenario where operating costs continue to escalate, at least until a stable alternative import source is found or the exploitation capacity at domestic oil fields is successfully restored.
