The extension of the 2-85 oil exploitation contract, which is currently operating the Pereco company, remains impossible while the members of the Energy and Mines of the Congress, during a summons with the representatives of the Ministries of Energy and Mines (MEM) and Natural Environment and Natural Resources (MARN), knew new positions or potential amendments.
This is the initiative of Law number 6021 that proposes the reforms to the Hydrocarbons Law (Decree 109-83) and that also includes the possibility of extending oil exploitation contracts with a new figure through the approval of the President of the Republic in the Council of Ministers, among these the one awarded to the Perenco firm that concludes in August.
This contract will end in five months, so it can no longer be extended, according to current legislation, but during the administration of President Alejandro Giammattei, it was sought to modify the Hydrocarbons Law, which is Decree 109-83, in order to create a figure that would allow this company and other companies that currently make the exploitation of national oil, with the approval of the executive body.
Official position
During the beginning of the citation, the head of the MEM, Víctor Hugo Ventura, showed the proposal of a new version of the initiative with the participation of the MARN and the Ministry of Finance, so he reiterated that one of the most important parts is the recovery of the Laguna del Tigre National Park in Petén, and the continuation within an orderly closing frame for the recovery of the Ecological Park.
He recalled in the session that this is the part, which is not reflected in the 6021 initiative.
In this regard, the Minister of Environment, Ana Patricia Orantes, clarified that in the Hydrocarbons Law (6021 initiative) there is no technical closing figure of oil operations “because it is opening an institutional way, therefore, there is no environmental study for the technical closure so that all that part is being built (Normando).”
He reiterated that “that is why it is important to work together with Congress, because it will have to make modifications to the legislation to ensure the closure of operations and the recovery of the Laguna del Tigre National Park (the exploited area).”
Follow-up
Deputy Julio Héctor Estrada of the Cabal bench, a parliamentary group that presides over referring commission, declared that for this week there will be a draft from the MEM and the MARN, but explained that the content of these proposals may be presented as amendments of Curul in the discussion during the plenary to ensure the contract with Perenco with the bill already advanced.
Part of the exposure of official proposals, according to the legislator, can be included in the 6021 initiative and cited as an example the technical closure ordered with the environmental component.
“It is obvious, that everything cannot enter, but it must be guaranteed that there is certainty of those income in economic operations (oil) the social impact and that in August we do not remain without asphalt for the roads and have to import it, and make that logistics that can increase prices,” he said.
MEM: programmed closure
The Minister of Energy and Mines, Victor Hugo Ventura, in an interview conducted on March 12, explained that the contract term of oil exploitation reached its period of 40 years, and a scheduled closing work will be carried out, as well as a mechanism for Perenco to execute scheduled maneuvers, for which the period must still be analyzed.
He explained that this will allow a recovery of the intervened (exploited) areas in the part of Laguna del Trigre, “a perfect seal and not an abandonment.”
In the part of oil exploitation there is still a part of the mineral that can be extracted, “but an adequate period of environmental closure and recovery activities is required,” and that can be between three to five years and the National Council of Protected Areas (CONAP) would regain the area, the official added.
The possibilities would be a new contract, but for the exploitation of closure, with the principle of the environmental recovery of the areas intervened by Perenco and a seal of all wells, works that should be financed with the extraction of oil.
The discussions are still in technical tables, but it will be President Bernardo Arévalo who must sign it.
What is it?
- The 2-85 contract was signed in 1985 between the Government of Guatemala and the Basic Resource company that is now operated by Perenco Guatemala in the Laguna del Tigre National Park for a period of twenty-five years concluded at the end of August 2010, but was extended 15 more years.
- The contract will end in August 2025 but by law it cannot be extended. During the government administration of President Alejandro Giammattei, it was proposed to modify the Hydrocarbons Law, Decree 109-83, to create a figure that would allow this and other companies to continue operating the areas.
- The reform proposes the creation of the figure called “Economic Limit”, with which an oil field can continue to operate, with authorization, while the income is greater than the costs.
- The initiative would allow the President of the Republic, in the Council of Ministers, to approve continuous extensions for up to 25 years each or until the economic limit of the deposit is reached, which is the new proposed figure.
- In December 2022 the 6021 initiative completed the second reading, but the third and final approval is still missing.