Colombia not ruling out new E&P licenses

Colombia has moved to ease political risk concerns in the local oil and gas sector by vowing to encourage new exploration investments.

In a statement, the mines and energy ministry said its strategy for a "fair and sustainable energy transition" included a focus on the upstream oil and gas sector. 

"[We will] continue with the exploration and production of liquid fuels and gas, promoting self-sufficiency of the energy matrix," the ministry said. 

But it added the plan would gradually eliminate subsidies on fuel consumption while promoting carbon neutral energy initiatives. 

The government has repeatedly stated that it does not plan to offer new drilling licenses, calling on companies to instead focus on exploration and production opportunities in existing contracts. 

Industry pessimism escalated in November when operators were hit with higher taxes on production as part of the country's sweeping tax reform.  

The government, however, appears to have left open the possibility of future bid rounds, saying officials would evaluate these aspects. "Next May, for example, the National Hydrocarbons Agency will publish its reserves report, a key source of information for public policy decisions," the statement said.

"This balance will give us a complete vision of the exploration contracts and their effects on oil production, exports and gas production."

In its latest monthly upstream report, Campetrol blamed a reduction in rig activity on price volatility, political uncertainty and civil unrest.