In 2025, the extraction of coal, petroleum, and gas has notably declined. Petroleum production averaged around 746,800 barrels daily between January and July, a 4.3% drop compared to the same period in 2024, hitting a 2021 low in April with just over 714,000 barrels per day. May saw a similar downtrend with production at approximately 749,800 barrels daily, an annual decrease of 4.8%. Gas extraction mirrored this pattern, falling by over 11% in production volumes by mid-year. Coal extraction, which accounts for about 20% of the mining and quarrying sector, experienced an even harsher 10.7% decline.
These production setbacks stem from a concatenation of external and domestic factors. On the international front, regional conflicts such as the Middle East crises and the Russia-Ukraine war have destabilized global energy markets. Additionally, the Organization of Petroleum Exporting Countries plus (OPEC+) decision to increase crude output in May by over 400,000 barrels per day pressured prices downward to a range between $60 and $70 per barrel—levels insufficient to sustain Colombia’s new exploration projects.
Domestically, persistent security issues have further compromised operations. Attacks on critical infrastructure, including the Oleoducto Bicentenario pipeline affecting major oil fields like Caño Limón in Arauca, alongside community blockades in the Meta department, disrupted production at vital sites such as Rubiales and Caño Sur Este. These disturbances have not only stalled output but have also contributed to a deteriorating investment climate.
Investment in exploration and drilling activities has declined sharply. The number of active drilling rigs dropped nearly 28% from November 2022 to mid-2025, with perforation equipment decreasing from 60 to 31 units. Spending on exploration is projected to fall 18% to an estimated $740 million this year, marking the lowest level in four years. This retreat in capital is attributed to regulatory uncertainty, the government’s halt on new hydrocarbon contracts, and ongoing social conflicts, all of which have undermined confidence among investors.
The mining sector faces its own structural challenges. The extraction of metallic minerals plummeted by 18.2% in the third quarter, linked closely to weak industrial and construction activity, which themselves contracted by 1.5% and 7%, respectively. The fall in metallic mineral output is tied to a stalled construction sector and diminishing commodity prices. Moreover, despite historically favorable global gold prices reaching record highs, Colombia struggles to benefit due to an estimated 80% of gold production occurring illegally, resulting in substantial fiscal losses approximated at $5 billion annually.
At the policy level, the government under President Gustavo Petro has signaled a strategic pivot by rejecting new oil and gas exploration contracts and emphasizing a transition to sustainable industries like agriculture. While this aims to reduce reliance on fossil fuels, it has intensified uncertainty in the extractive sectors, straining economic contributors that historically account for a significant share of exports and government revenue.
The combined effect of these trends has manifested in decreased fiscal income, with hydrocarbon royalties falling by 5.3% in early 2025 relative to the previous year, complicating the state’s ability to fund social programs and infrastructure. Additionally, weakened export revenues and exchange rate volatility challenge Colombia’s macroeconomic stability.
Looking ahead, industry experts forecast that the mining and quarrying sector could decline up to 7% by year-end, solidifying it as the weakest performer in the economy for 2025. Although gold and certain metals maintain positive international price trajectories that might encourage exploratory initiatives, these prospects are tempered by social challenges and tax burdens. Coal and hydrocarbons will likely remain under pressure due to subdued global prices and increased fiscal constraints. Without concerted policy efforts to restore confidence, secure investment, and improve security, Colombia’s extractive industries face an uncertain future amid a complex energy transition.
This article was curated and published as part of our South American energy market coverage.
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