The Ministry of Energy and Mines (MEM) issued Ministerial Agreement No. MEM-MEM-2025-0025-AM on July 17, 2025, by which it approved the “Guidelines for the transparency and traceability of royalties, surpluses, profits, and compensations generated by the execution of projects in the hydrocarbons, electricity, and mining sectors” (the “Agreement”). This regulation was published in Official Gazette No. 93 dated July 31, 2025.
The purpose of the Agreement is to identify the traceability and impact of royalties and other transfers generated by energy and mining projects on local communities, within the framework of the life plans of indigenous peoples and nationalities, local, regional and national development plans, and sustainable development policies[1].
The most relevant aspects of the Agreement are summarized below:
- Obligated entities and reporting frequency:
Oil operators, mining titleholders, and electricity generation companies, whether public, private, or mixed-capital, are required to submit quarterly reports containing detailed information regarding royalties, surpluses, profits, and compensations arising from the execution of their projects or activities[2].
- Minimum content of the report:
In accordance with the reporting format to be issued by the Ministry of Energy and Mines, the quarterly reports must include, at a minimum[3]:
a. Phase of the project or activity;
b. Amount of investment executed; and,
c. Amount allocated to royalties, surpluses, profits, and compensations generated by the activity.
- Competent authority and use of information
The Undersecretariat of Territory and Environmental Monitoring, part of the Ministry of Energy and Mines, shall be responsible for receiving, analyzing, and consolidating the quarterly reports[4]. It shall also be authorized to request supplementary information from Decentralized Autonomous Governments[5]. The consolidated information will be submitted to the highest authority of the Ministry for the adoption of appropriate measures, recommendations, and for accountability purposes[6].
For more information, please do not hesitate to contact us.
This information is a summary of legal developments of interest, and therefore cannot be considered as provided advice. If you have any questions, please contact the AVL Abogados team.
[1] Article 1 of the Agreement.
[2] Article 4 of the Agreement.
[3] Article 5 of the Agreement.
[4] Article 6 of the Agreement.
[5] General Provision Three.
[6] Article 7 of the Agreement.
