Unrest in Colombia hampers upstream activity
New York-listed oil and gas explorer GeoPark said May 17 that protests over proposed tax reforms in Colombia have significantly curtailed its operations there.
Strikes across Colombia greeted an April tax reform proposal. Working to alleviate chronic debt, Colombian president Ivan Duque proposed a higher tax for middle- and high-income earners, sparking a major public backlash.
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“Despite the proposal being dismissed in early May, demonstrations continued and intensified and included road blockades across the country, affecting logistics and supply chains in general,” GeoPark explained.
GeoPark in 2018 formed a joint business development group with India’s ONGC Videsh with headquarters in the Colombian capital, Bogota. GeoPark said the ongoing demonstrations disrupted upstream and midstream operations in the country. It started a controlled production shut down at several of its fields as well.
“The company is taking all necessary steps to mitigate the impact of these events and is participating in ongoing conversations with the Colombian government, its joint-venture partners and suppliers, and expects the matter to be resolved in order to restart operations and production,” it said.
The unrest comes as Colombia embarks on an energy transition path. Plans announced last year detail how the use of fossil fuels will be gradually replaced by cleaner energy sources. Natural gas generates 8% of Colombian energy, while coal and oil products account for a half. In 2050, natural gas is expected to generate 30% of the country's power under the plan.