The Colombian government is analyzing whether President Gustavo Petro’s campaign promise to put a stop to all new oil exploration contracts is economically sustainable, Economy Minister José Antonio Ocampo said yesterday.
“We will make an evaluation to see if more contracts are needed, but no decision has been made. We want to see how to diversify our exports to replace oil sales,” Mr. Ocampo argued.
The cabinet minister said they will make 12-year projections on Colombia’s balance of payments before making the call. The country’s fragile fiscal situation is also being taken into account, officials said.
Mr. Petro won the presidential election campaigning on a green platform, saying the country needs to be at the vanguard of the fight against climate change, and arguing that Colombia should look for different sources of exports, such as foreign tourism.
But the proposal has sparked questions from opposition leaders, industry players, and Colombians in general, according to opinion polls.
Colombia’s oil and gas sector argues production could drop by 47 percent in five years if exploration is halted, and the Colombian Peso has lost 30 percent of its value since Mr. Petro took office, in a context of global strength for the US Dollar.
Oil, meanwhile, has continued to trade at a premium in global markets, with the benchmark WTI barrel now worth USD 88 dollars in the US, after reaching USD 130 per barrel following Russia’s invasion of Ukraine.
Colombia has the advantage of having massive renewable energy options, with 68 percent of its electricity needs coming from hydroelectricity. But oil exploration is still vital to balance out the country’s imports.