Colombian government seeks to reactivate 30 oil contracts

The oil, coal and gas exploitation contracts continue normally. Similarly, current exploration contracts continue as normal. There is no prohibition.”

Gustavo Petro, President of Colombia

After Colombian President Gustavo Petro had as a campaign proposal to reduce the role of hydrocarbons in the country and received strong criticism from the opposition, his position changed.

Oil and gas are the first income of the state and the first exports of the country. The figures from 2011 to 2021 show that the country has exported more than 530.083 million dollars, including mining and energy such as oil, gas or coal, which represent 67% of that total, says Dane.

President Petro also highlighted that “oil, coal and gas exploitation contracts continue normally. Current exploration contracts continue as normal. There is no prohibition.”

In fact, LR recently calculated what would have happened to Colombia’s external sales if hydrocarbon revenues were not recorded. The country would have had to subtract 357.544 million dollars and the total figure would contract to 172.539 million dollars.

The National Government installed a technical committee made up of MinMinas, the National Hydrocarbons Agency (ANH) and the Colombian Association of Oil and Gas (ACP) to study the status of hydrocarbon exploration and exploitation contracts.

“Colombia is close to 750,000 barrels of oil equivalent per day, half of which is being shipped and the US is the main benchmark for buying crude. Removing it would imply rebuilding that export cake ”, explains Oscar Manco, CEO of Trust Investing.

Within the study, 35 suspended contracts were identified that are in the preliminary phase and will be discussed with the territorial entities and communities to be executed. Of these, 32 contracts have hydrocarbon potential that could become proven reserves.

According to Camilo Rincón, director of Hydrocarbons at the Ministry of Mines, 56% of those 35 contracts that are suspended have social and environmental problems. The Government trusts that it can unlock these contracts with agreements between the communities and the hydrocarbon operators.

The Minister of Mines explained that the analysis of the state of the contracts was based on four main axes. The first is that the figures used by the ministry and the ANH were unified. From there, the current contracts that have bottlenecks and that are in the process of being suspended were identified.

The third point of the Government’s strategy is to establish a route to try to unlock these contracts and the fourth is to manage the contracts in the preliminary phase and which will be accompanied by the Ministry of Mines to facilitate their execution.

The ANH projects that if these contracts go ahead and are effectively explored, Colombia’s reserves will increase within the next three to four years.