Offshore staff
EDINBURGH, UK — Colombia’s new President Gustavo Petro has pledged to position his country as a leader of the energy transition.
According to Wood Mackenzie, his plans for fiscal reform involve higher taxes for extractive industries, and hydrocarbons provide the primary source of Colombia’s revenue. At the same time, the country has to address the long-standing challenge of rising debt.
The new fiscal regime should net the government an estimated $15 billion over the next decade on average over the next 10 years. In turn, Wood Mackenzie calculates, average corporate net cash flow will fall by 26%.
This could prompt E&P to direct new investment to neighboring Guyana, Suriname, and Trinidad and Tobago. In the meantime, Colombia will be faced with reduced revenues from the oil and gas sector at a time when its hydrocarbon production is already in decline, and funds are needed to sustain the country’s shift to the energy transition.
All oil and gas companies will be impacted by the new fiscal policy with mature fields most affected, in particular the smaller fields with low production and marginal economics
However, owners will likely not alter their strategies for these fields in the short term, but they will probably reassess longer-term investments.
08.02.2023
