Statement to the public opinion

The Colombian Association of Oil and Gas (ACP) receives with concern and surprise the announcement by the Minister of Mines and Energy, Irene Vélez, during the World Economic Forum in Davos (Switzerland), not to sign new contracts for oil and gas exploration in Colombia. In this regard, the association wishes to communicate that:

1. The exploration and production of oil and natural gas is essential to guarantee the country energy self-sufficiency and sovereignty, in the short, medium, and long term, while advancing the responsible transition that Colombia requires. The main challenge of our transition is not in the diversification of the electricity matrix but in the energy matrix, and that will only happen with the transition of the automotive fleet, as the country depends on petroleum-derived fuels and gas by 99.1%. Without a transition in the automotive fleet, there is no energy transition. It is necessary to prioritize this.
2. The hydrocarbon industry is fundamental for the economic stability of the country, national financing, and that of departments and municipalities. About 40.1% of exports depend on this sector, 20.1% of the Nation's fiscal revenues, and 76.1% of royalties. Diversifying the export basket must be an objective, but not at the cost of withering the industry. And the development of other sectors, such as tourism, has enormous potential, but it will take time. This transition will not happen in the short term. A triple transition is needed: energy, fiscal, and royalty, and productive.
3. After five months, the national government has not told the country how it realistically aspires to replace oil and gas, knowing that proven reserves last for approximately 10 years and that the signed exploration contracts do not guarantee energy self-sufficiency or sovereignty in the medium and long term. It has also not explained how it will replace the fiscal revenues that the industry contributes to the Nation (fundamental in the past tax reform) or the royalties. For this reason, in various scenarios, we have called for caution. For a transition to be fair, it must be responsible.
4. Colombia contributes 0.371% of the planet's Greenhouse Gas Emissions. Hence, the President of the Republic has acknowledged that it is an insignificant contribution. Of these, 59.1% is produced by the agricultural and livestock sector, deforestation, and the misuse of land. 31.1% is associated with the generation and consumption of different energy sources, with transportation being more significant at 12.1%. The activity of exploration and production of oil and gas contributes less than 11% of the total emissions of the country. Not signing new exploration contracts gradually destroys a fundamental industry, makes no difference in the global climate crisis, and will impoverish Colombia.
5. The president of Ecopetrol, Felipe Bayón, at the same World Economic Forum, stated that it is necessary to continue the exploration and production of oil and natural gas, and that this is not incompatible with advancing the country's and the company's energy transition. The position of the Minister of Mines and Energy clashes with that of the President of the country's most important company. The future of the majority state-owned company is concerning if it is not allowed new exploration contracts directly or alongside private companies, through the National Hydrocarbons Agency (ANH).
6. The national government stated last year that it would submit the decision to sign or not sign new exploration contracts 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 the replacement of fiscal revenues and royalties. This study does not exist. They have prepared superficial analyses that do not include the macroeconomic and fiscal component, the financing of regions, and productive transformation, especially in oil-producing areas.
7. The oil and gas industry reiterates its willingness to continue working with the national government in building a joint vision for the country and its energy, social, and environmental opportunities. And, in particular, in an export-oriented energy transition, fiscal and responsible regional and productive financing, that consults national interests.