Oil

Colombia will respect current oil contracts, ministry says

BOGOTA, Oct 20 (Reuters) – Colombia’s government will respect already-signed oil contracts, the energy ministry said on Thursday, amid industry jitters over tax reform and plans by the new leftist government to move the country more aggressively toward renewables.

President Gustavo Petro, who took office in August, has pledged to raise an additional $5 billion in tax revenue next year, partially through higher taxes on oil exports. He has also backed a ban on fracking and said he will not support the inking of new oil development contracts.

But current contracts will be respected, the energy ministry said in a statement.

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“The 330 contracts for exploration and exploitation of hydrocarbons in Colombia will be respected,” the statement said, adding that oil production has been rising since the new government took office, reaching as much as 779,000 barrels per day.

Of 207 exploration contracts, 117 are active, the ministry said.

“We want to reactivate the remainder to have those resources and take advantage of them correctly,” said energy minister Irene Velez in the statement. “We have important gas resources in the Colombian Caribbean which potentially could become reserves and significantly increase the country’s horizon of self-sufficiency.”

The transition towards renewables will not put at risk energy sovereignty, the statement added.

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Reporting by Julia Symmes Cobb; editing by Richard Pullin

Our Standards: The Thomson Reuters Trust Principles.

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