BOGOTA, June 21 (Reuters) – Colombia’s government is preparing to help energy companies revive at least 21 suspended oil and gas contracts with a $38 million initiative aimed at solving security and community relations problems, the National Hydrocarbons Agency (ANH) told Reuters.
The leftist government of President Gustavo Petro has made weaning Colombia away from its reliance on hydrocarbons a key policy, urging companies to develop already-awarded blocks, despite industry demands for new licensing rounds.
Pipelines and other infrastructure are regularly the target of attacks by illegal armed groups, and earlier this year two people were killed and almost 100 taken hostage by rural communities demanding that Emerald Energy, a subsidiary of China’s state-owned company Sinochem, fix roads.
Communities often complain oil development comes with environmental damage and few infrastructure improvements.
The ANH said it has so far identified concessions owned by companies including Geopark (GPRK.N), Gran Tierra Energy (GTE.TO), SierraCol Energy, majority state-owned Ecopetrol (ECO.CN) and Emerald as potential beneficiaries of its Territorial Hydrocarbons Strategy.
The ANH has earmarked 160 billion pesos (over $38 million) – equivalent to 40 billion pesos for each year of Petro’s administration – for the strategy.
“We’ve been working on implementing an agreement focused on providing alternatives, to make exploratory activities facing delays in their execution viable,” the ANH said in written responses to Reuters.
The regulator will help companies coordinate with entities like the interior ministry, which often mediates between companies and communities, “guaranteeing the development of social dialogue spaces and effective community participation.”
Companies are required to carry out community consultations before projects advance, but successive governments have failed to streamline the process.
Though the number of contracts included in the scheme may change, some awarded blocks are unsuitable for inclusion, the ANH said, either because companies have asked to return them or because they are for nonconventional exploration like fracking, which the government opposes.
The contracts included in the revival effort have been suspended on average for between eight and 10 years, the ANH said.
Five were awarded to Amerisur Resources, a formerly London-listed company which was bought by Geopark in a deal finalized in 2020.
Geopark declined to comment about the effort to galvanize suspended contracts.
Previously, the company said the development of one of the contracts – PUT 9 in Putumayo province – was suspended due to an unspecified force majeure before the Amerisur takeover.
Three concessions belong to Ecopetrol, which said it always intended to develop the blocks and has been reviewing issues impeding their development with the government.
“In all three there is high complexity mainly due to social conditions or security,” Ecopetrol said in a statement.
Two contracts in Arauca province have been affected by security issues, Ecopetrol said, while the Odisea block in Casanare province has faced opposition from local communities.
SierraCol has discussed the Llanos 39 and Llanos 52 contracts with the government, it said, adding, “restarting activities in these blocks depends on conditions that gave rise to the force majeure (declaration) ceasing to exist.”
The force majeure was connected to security issues, SierraCol added, without elaborating.
Other companies included in the list of 21 contracts either did not respond to requests for comment or could not be contacted.
Reporting by Oliver Griffin in Bogota
Editing by Matthew Lewis
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