Colombia stepping up oil, coal production amid Russia sanctions

Image courtesy of Drummond Company Inc.

Colombia is set to increase coal and petroleum production as it steps up to fill the void created by sanctions against Russia, Energy Minister Diego Mesa said on Monday.

The Andean county has restarted coal exports to Ireland, Mesa said on the sidelines of Canada’s PDAC conference in Toronto.

The European country stopped buying Colombian coal in 2016 on human rights concerns.

“Six years ago Ireland had replaced Colombian coal with Russian coal … but at the beginning of the war they came knocking at our doors again,” Mesa said.

The demand for coal is so high that mining companies like Drummond, one of Colombia’s largest producers, have managed to secure contracts for the next 18 months, Mesa said.

Poland has signed for one million tonnes of coal from Drummond and is expected to place a contract for an additional two million tonnes, he said.

Colombia has also increased its coal exports to the Netherlands, Spain and Canada since Russia’s invasion of Ukraine, he added.

Mesa said he expects Colombian oil production to reach at least 800,000 barrels per day by end of this year and up to 900,000 barrels per day by 2023.

“Any excess production will be put to international use,” he said.

Colombians will vote in a second round of presidential elections on Sunday to replace President Ivan Duque, who cannot run again.

Gustavo Petro, a former M-19 guerrilla and current senator, is tied in polling with Rodolfo Hernandez, an ex-mayor running on anti-corruption promises.

Petro has said he will respect already-signed contracts for oil and mining but will not sign new ones, rattling many in the energy industry.

Oil and mining combined provide more than 50% of Colombia’s monthly exports, according to government figures.

Hernandez is seen as pro-business but, like Petro, has said he will not back commercial use of fracking.

Mesa said Colombia’s record of rule of law will continue and signed contracts will be respected regardless of who wins.

(By Divya Rajagopal; Editing by Richard Pullin)


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