The Colombian Oil and Gas Association (ACP) assured that it received with concern and surprise the announcement by the Minister of Mines and Energy, Irene Vélez, within the framework of the World Economic Forum in Davos (Switzerland), of not sign new oil and gas exploration contracts In colombia.
In 2022, the National Government affirmed that it would submit the decision to sign new exploration contracts or not to a study of the country’s hydrocarbon potential, an analysis of the signed exploration and production contracts, and the time that Colombia will need from the industry for its export diversification, and substitution of tax revenues and royalties.
(Also read: Without oil and gas exploration, income and investment are hit hard)
«This study does not exist. They have prepared some analyzes that do not include the macroeconomic and fiscal component, the financing of the regions and productive transformation, especially in the oil zones”, affirmed the ACP.
The union stated that the exploration and production of oil and natural gas is essential to guarantee the country self-sufficiency and energy sovereigntyin the short, medium and long term, while the «responsible transition» that Colombia requires is being carried out.
Diversifying the export basket should be an objective, but not at the cost of leaving the industry
«The main challenge of our transition is not in the diversification of the electrical matrix but in the energy matrix and that will only occur with the transition of the automotive fleet, since The country depends on fuels derived from oil and gas for 99 percent. Without transition in the automotive fleet there is no energy transition. It is necessary to give it priority,» added the union.
Likewise, he stressed that The hydrocarbon industry is essential for the economic stability of the countrynational financing and that of the departments and municipalities, since close to 40 percent of the exports depend on this sector, 20 percent of the fiscal income of the Nation and 76 percent of the royalties.
(Also read: Colombia will not sign more oil and gas exploration contracts)
«Diversifying the export basket should be an objective, but not at the cost of leaving the industry. And, the development of other sectors, such as tourism has enormous potential, but it will take time. That transition will not happen anytime soon. A triple transition is needed: energy, fiscal and royalties, and productive», considers the ACP.
The oil union also questioned that, despite the fact that five months have passed since the government of President Gustavo Petro arrived, has not yet been clear on «how it hopes to realistically replace oil and gasknowing that the proven reserves reach for approximately ten years and that the exploration contracts signed do not ensure self-sufficiency or energy sovereignty in the medium and long term».
Nor has it explained how it will replace the tax revenues that the industry contributes to the Nation (fundamental in the past tax reform) or royalties. For this reason, the union reiterates its call for caution. «For a transition to be just, it must be responsible»said.
