(Reuters) – Colombia plans to award up to 15 oil blocks next month and will begin routinely offering onshore and offshore areas for exploration and production in May, the head of the country’s energy regulator told Reuters.
The move, Colombia’s first offering of new areas in four years, comes as most of its neighbors also pursue new energy investments. This year, amid higher crude prices and an increase in exploration capital, bidding rounds are also set in Argentina, Brazil, Ecuador, Mexico and Uruguay.
The upcoming Colombian awards will be in the Sinu-San Jacinto basin, in the country’s northwest, Orlando Velandia, president of the National Hydrocarbons Agency, said in an interview on the sidelines of the CERAWeek energy conference.
Colombia needs to boost foreign investment to revive its stagnant crude and gas production. The Andean country plans to only slightly increase output to 900,000 barrels of oil equivalent per day this year, Velandia said.
Colombia’s last oilfield auction in 2014 secured investment from firms including ConocoPhillips and Parex Resources for seven unconventional projects that are about to finish the exploration stage to later start early production of shale oil and gas.
“We want to award the maximum possible amount of blocks in this process … This pause has been useful for reflecting and gaining experience in a low price environment,” Velandia said.
Canada-based Parex Resources and Gran Tierra, Chinese CNOOC’s unit Nexen Petroleum, Colombia’s Hocol, Repsol’s Talisman Energy, and U.S. Noble Energy qualified for the Sinu-San Jacinto auction. They will submit offers in the coming days, with results expected in early April, Velandia said.
After completing the auction, Colombia expects to begin permanently offering blocks in a process similar to one Brazil is planning this year. Colombia’s offer will include about two dozen onshore and offshore areas that can receive bids at any time.
The new mechanism was approved last year and it will be tested in May.
“Colombia’s priority is to develop its offshore (resources),” Velandia said.
Nine permits granted to firms to study areas in the Caribbean Sea also plan to be converted into exploration and production contracts, doubling the offshore projects in that area, where big discoveries by firms including U.S. Anadarko Petroleum have been recently made.
State-run company Ecopetrol plans to invest up to $4 billion in 2018, largely in exploration and production. Private firms in the country are expected to invest a further $4.5 billion to $4.9 billion.