After approval in the first debate, the Senate of Colombia approved in second debate the bill 114 of 2022 (hereinafter the “Bill”) that seeks the prohibition of fracking in Colombia and the exploitation of certain types of unconventional hydrocarbon deposits. Here is a summary of the main modifications approved in the second debate.

• No general ban of exploitation of hydrocarbons unconventional reservoirs. The Bill proposes the prohibition of the exploration and exploitation of certain types of unconventional deposits and the use of the multistage hydraulic fracturing in horizontal sections technique (“Fracking”). 
• The prohibition of the production of unconventional hydrocarbons reservoirs is associated with tar sand, methane hydrates and shale oil and gas reservoirs.
• The Bill excludes coalbed methane from the prohibition to carry out Fracking, as well as  calcareous rocks, tight sands, and cherts. 
• The Bill proposes that the special research project contracts (hereinafter “CEPI” in Spanish) will become ineffective and therefore terminated according to the proceeding provided by the Bill.
• For existing E&P contracts that exploit unconventional deposits and for CEPI contracts, the Bill proposes that the National Hydrocarbons Agency (hereinafter “ANH”) offers to the contract holders the following alternatives for its termination and liquidation:

1. The execution of a new contract to allow the exploration and production of conventional deposits in the same contracted area.
2. Relocation of investments performed by a contractor;
3. The allocation of available areas that were not previously granted according to the land map published by the ANH; or
4. Termination by mutual agreement of the contract without adverse consequences for the parties, such as payment by the contractors of the pending investments to be executed of the exploratory commitments.

Failure of the contractor to elect its option within two years as of the enactment of the law, the Bill proposes that the unconventional deposits E&P contracts are terminated without payment by the contractor of the pending investments to be executed. ANH will then liquidate such agreements.

The Bill must be reviewed and approved by the House of Representatives of the Congress of Colombia. Once it is approved, it will be submitted to presidential approval to become a law.

For the revision of the text approved in the second debate, please review the following link