Exxon scrambles to save investments before Colombia bans fracking

The company is looking at how to get some money back despite Gustavo Petro’s government looking to ban it from fracking in Colombia

Exxon Mobil is in talks with Colombia’s government in hopes of recovering its investment in a fracking pilot project as the U.S. oil major prepares to stop producing fossil fuels in the country where the government is pushing through a fracking ban, two sources close to the discussions told Reuters.

Exxon has held eight exploration and production contracts in Colombia, including the fracking pilot. All either have been or are being ended, suspended or liquidated, Colombia’s National Hydrocarbon Agency (ANH) told Reuters.

The company had planned to develop the Platero pilot project for hydraulic fracturing, or fracking, eyeing an investment of $53 million, under a contract awarded two years ago.

Colombia’s congress has been preparing to pass a fracking ban backed by leftist President Gustavo Petro, who took office nearly nine months ago.

What is the global stocktake of climate action and why does it matter?

The proposed bill would ban development of non-conventional energy projects including fracking. It has already passed the Senate and is expected to get final congressional approval in the coming months.

The law would leave companies with few options to recoup investments, according to the text of the proposal, including options such as the chance to transfer their investments elsewhere or be awarded rights over other conventional blocks.

Exxon is “reviewing the mechanisms to reach a solution regarding the investments for exploring unconventional” energy resources it has in the country, an Exxon source in Colombia told Reuters.

“We will continue to have constructive dialogue with the Colombian government on a comprehensive assessment of our unconventional investments,” Exxon spokesperson Michelle Gray told Reuters.

Mitsubishi bets on carbon removal while keeping coal plants

The term “compensation” does not exist in technical or legal terminology used by the ANH in its processes, the agency said, but Exxon is advancing an “accreditation” process regarding the Platero pilot project.

“The procedure is currently being studied,” the ANH said. It did not respond to follow-up questions about what an accreditation process could include.

After winning separ

Read More