Gran Tierra eyes Ecuador amid rising Colombia risk

Gran Tierra could turn its focus to Ecuador if newly elected Colombian President Gustavo Petro fulfills a campaign promise to accelerate the country's decarbonization plans.  

Petro, who was sworn into office on August 7, has vowed to end new oil exploration and raise taxes on producers as part of broader plans to prioritize investments in renewable energy. 

"We're watching Ecuador very closely and what President Petro will be doing in Colombia," CEO Gary Guidry told analysts in a quarterly earnings call. 

"We have a very big exploration portfolio in Colombia, but we're also very keen on Ecuador. If things do slow down in terms of regulations and the execution of [Petro's] programs, we could reallocate [capital] to Ecuador. We have prospective blocks and commitments there ... and we'll play it by ear."

Among the main concerns is a proposed 10% levy on oil exports, a move that producers say would remove incentives for new investment and make their operations uncompetitive.

Petro has also pledged to halt new exploration projects and ban fracking, or hydraulic fracturing.

"We're still working through the tax reform and the implications," chief financial officer Ryan Nelson said.

"It [the reform] is just a proposal and needs to go through two debates, in the lower and upper chambers [of congress], before it's signed into law. We're in wait-and-see mode."

Colombia is home to 100% of Gran Tierra's current production, which mainly comes from blocks in the Middle Magdalena Valley and Putumayo basins. 

The company also owns 100% operating stakes in the Charapa, Chanangue and Iguana exploration blocks – which represent combined acreage of 140,000 acres (57,000ha) – in Ecuador's Oriente basin.