Colombia looking at possible change to oil exploration ban

(Reuters) – Colombia’s government may change its position on prohibiting new contracts for oil exploration, director of public credit Jose Roberto Acosta said on Thursday, citing the valuable income brought by the sector.

Granting new contracts for oil exploration would represent a major U-turn for the government of leftist President Gustavo Petro, who previously described oil and coal – the country’s top exports – as poisons, while also pledging to move Colombia away from hydrocarbons.

“There is a review of the local and international economic circumstances and depending on the new numbers and this very stressful reality in terms of international liquidity, the debt market, foreign exchange, it will be those numbers which determine the final decision … for the country of the reopening of new oil wells,” Acosta told reporters.

The results of the study will released “soon”, he added, so the government can make a decision.

The sustainability of Colombia’s economy is a priority, Acosta said.

Despite pledges to block further auction rounds, the government has repeatedly said it will respect 330 already signed hydrocarbons contracts and that it wants inactive ones included in that number to be revived.

Petro’s decision to prevent new oil exploration contracts – alongside other comments on capital controls and criticism of the central bank’s raising the interest rate – has caused Colombia’s peso to depreciate sharply, falling to a record low on Monday.

Petro’s government has agreed to modify a tax reform proposal to implement new duties on oil and coal more gradually.

A spokesperson for the ministry of mines and energy had no immediate comment, while a presidential spokesperson said an analysis of the policy was being conducted based on the country’s fiscal needs.

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