El Salvador Will Investigate the Existence of Oil and Natural Gas in Its Territory

By Karla Ramos  |  Dec 19th, 2023
Economic Commission of the Legislative AssemblyEconomic Commission of the Legislative Assembly. Image by @DGEHMSV

The Economic Commission of the Legislative Assembly agreed yesterday to reform the Hydrocarbons Law and convert it into a “Law on the exploration and exploitation of hydrocarbon deposits.”

This law will empower the Executive Hydroelectric Commission of the Lempa River (CEL) to contract geological and geophysical studies of the subsoil for petroleum exploratory purposes.

With the reforms, the Executive Hydroelectric Commission of the Lempa River (CEL) will be able to hire a company under the multi-client figure to carry out studies and obtain certainty about oil and natural gas resources in the country. Daniel Alvarez, General Director of Energy, Hydrocarbons, and Mines in El Salvador.

The government of El Salvador does not claim that it has oil or natural gas, but it does need tools to investigate whether these resources may exist in the country.

Alvarez noted that “one of the aims of amending the law is to ascertain the specific types of resources at our disposal, such as oil or natural gas. Through these reforms, we can enlist the expertise of international professionals to conduct the necessary studies.”

According to Salvadoran authorities, the company that carries out the studies will be able to market the raw data but not the resources.

The CEL president highlighted that the studies carried out in the past are not conclusive; therefore, new and more complete studies are needed to determine if El Salvador has the potential to become a hydrocarbon producer.

The government proposal was approved unanimously by the economic commission’s deputies. The next step for the bill is to be approved by the plenary session of the Legislative Assembly.

In conclusion, the firm conducting the study will have the right to sell the information but not the natural resources. CEL will be entitled to a percentage of any profits derived from the study.

El Salvador is actively exploring energy alternatives to diversify its sources and enhance sustainability. The country is investing in innovative solutions to meet its growing energy needs efficiently and environmentally responsibly.