As the press clip says (LA PERLA VENEZUEAL), Venezuela it´s going to be one of the biggest gas producers in latin america, which nonetheless allows us to see the challenges that this fact will have for Venezuela, and of course for Colombia as well.
Venezuela, as almost everybody knows, has been hit badly by the downfall of oil prices, and of course, its lack of public skills, to keep spending beneath the economy incomes.
One of the main sources of that huge spending, is precisely the use of gasoline for its internal consumption; in Venezuela it is cheaper to buy a gallon of gasoline than a gallon of water, which I think says it all. In order to adequately use the gas that is going to be produce from La Perla, Venezuela should implement every public policy possible, in order to substitute gasoline for natural gas, in every market possible. In order to do that, it will have to increase the gasoline prices, to give some room to the natural gas consumption, which I do not think is going to happen.
The alternative, is to export the gas, by means of an LNG plant, that they don´t have, and that it will take time to build, considering the economic situation in the country.
For Colombia, the announcement is even more important; Colombia signed a deal with Venezuela, in which Colombia compromise itself to sell a significant amount of gas, from “Ballenas” field, which Colombia fulfilled from 2007 till recently; Venezuela in return, compromise itself to sell gas, at more or less the same price, theoretically from “La Perla”.
Colombia may have to struggle itself to satisfy its own demand from 2017 through 2018 from its own fields, so La Perla really could not come in a better time; however, this leaves Colombia, with a dependency from Venezuela, that is really not desirable, precisely because of the political situation in Venezuela.
President Maduro will not hestitate to try to gain some political leverage, using the gas supply to Colombia, particularly regarding its internal problems with the opposition parties, and the economic situation in general.
If Venezuela sells its gas beneath the price market in Colombia, it will discourage other producers to introduce new sources to attend the internal demand, increasing and deepening the dependency.
We will soon see what will happen with this, and how the political and the geopolitical matters evolve, particularly regarding the coming elections in Venezuela, and the economic situation of the country, that from here (Colombia) does not look good.