Colombia’s National Hydrocarbons Agency (AHN) has given a provisional go-ahead to ExxonMobil’s plan for the development of a pilot project for hydraulic fracturing in the country’s Middle Magdalena Valley basin. The green light means ExxonMobil will become the second company to conduct a fracturing pilot project in the country, after majority state-owned Ecopetrol.
ExxonMobil submitted its pilot plans last month. The contract for the project is expected to be signed on 8 April, according to Reuters citing an AHN official. The project is expected to attract $53 million in investment.
The 34,000-km2 Middle Magdalena Valley basin is in north-central Colombia between the central and eastern ranges of the Andes Mountains. ExxonMobil holds a 70% stake in the VMM37 block. Canada’s Sintana Energy holds the remaining 30%.
There is a moratorium on commercial exploitation of unconventional energy deposits in Colombia, which includes the hydraulic fracturing of shale reserves and coalbed methane. However, the courts have said that pilot projects can proceed with the intent of gathering scientific information. That information will be used to consider the future potential for commercial development of unconventional resources.
Environmental activists have challenged the impact of hydraulic fracturing and the damage it could cause to Colombia’s ecosystems. Energy companies have pushed for unconventional oil and gas development in the country believing it was vital for the country’s economy and energy independence.