Natural gas is playing an increasingly important role in the global transition to clean energy. Governments and industries are phasing out the use of oil and coal as energy sources, replacing them with natural gas in a transition to a cleaner renewable energies. This is essential in order to achieve national targets in the reduction of greenhouse gases (GHGs) and particulate matter, especially within large population centers. The Colombian government is committed to reducing GHG emissions by 51% by 20301. To meet the government's target, natural gas consumption in Colombia is expected to grow by 3-6% annually from 2020 to 20501.
Canacol is the largest independent onshore conventional natural gas exploration and production company in Colombia, supplying approximately 20%2 of the country’s gas needs. Our goal is to continue to grow our gas production business in a manner to maximize return to our shareholders, while at the same time becoming a leader in our commitment to the environment, the communities we work in, and corporate governance.
In 2012 we made a strategic shift towards onshore gas exploration in Colombia, realizing that an emerging shortage of natural gas would create a situation where demand would eventually outstrip supply. We identified the Lower Magdalena Basin as a gas rich, underexplored basin connected via pipelines to large and growing gas consumption centers located on the Caribbean coast. We acquired a number of gas exploration blocks via acquisitions and exploration bid rounds, and in 2014 consolidated our position as the largest exploration land holder in the basin. Via our successful exploration drilling programs, and our ability to efficiently commercialize new gas reserves, we have substantially grown our reserves & production over the years with industry leading success rates and low F&D costs. With a future drilling inventory consisting of 188 identified prospects and leads targeting approximately 5.7 Tcf of new prospective natural gas resources3, we are positioned to continue to grow production and reserves well into the future.
We take our environmental, social, and governance (ESG) responsibilities very seriously. We are committed to continue strengthening our ESG strategy and reporting, ensuring industry leading results for our stakeholders. We are committed to reduce our carbon footprint, contributing to global efforts and commitments to counteract climate change. We are also conscious of the importance of clean and abundant water and will continue to adopt and promote initiatives to ensure the protection and preservation of water sources in our areas of operation. We believe our people are the key to long-term success, which is why we have focused on attracting and retaining industry leading talent, and why we hold ourselves to the highest standards of sustainability.
1) Source: Ministry of Mines and Energy (2021). Energy transition: a legacy for the present and future of Colombia.
2) Source: Canacol and Ministry of Mines and Energy
3) Source: Independent resources report prepared by Gaffney, Cline & Associates, effective December 31, 2020