Colombia lets contract for unconventional resources development

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Dec. 9 -- Colombia’s National Planning Department let a contract to Petroleum Development Consultants (PDC), London, to develop the model contract and technical regulations for the development of the country’s unconventional resources.

“The focus of the work is to prepare a contractual framework and fiscal arrangements that will encourage the exploration and development of these types of resources in the country,” said PDC.

Under terms of the agreement, PDC will prepare an assessment of the resource in Colombia, develop appropriate development scenarios for typical resource size, prepare capital investment and operating cost estimates for typical developments, and carry out economic evaluations and determine optimum fiscal terms balancing the requirements of government and investors.

In June, Rodolfo Guzman of Houston-based consultancy Arthur D. Little said investors interested in Colombia's hydrocarbons reserves were beginning to pay increased attention to unconventional resources as regulated gas prices in the country begin to rise.

Guzman told BNAmericas news agency that officials have long known about Colombia's vast reserves of coalbed methane, but that new studies are also being undertaken to evaluate shale gas reserves across the country.

"There's not a lot of information around," Guzman said. "Typically, until recently, domestic gas prices were not attractive enough to incentivize any type of unconventional development.”

But he added that “over the last 3-4 years, gas prices have been increasing, and that's starting to create interest in unconventional resources."

Guzman told the agency that Colombia’s hydrocarbons regulator ANH was planning to promote the development of unconventional resources in the country, although the current fiscal regime may need to be adapted.

"E&P contracts were designed for conventional hydrocarbons, so there are some changes that need to be done. You need a little bit more flexibility. And ANH is currently working on that," Guzman said. "I think over the next couple of years we're going to see a lot more activity in both coalbed methane and shale gas."

Guzman said that coal miner Drummond announced several years ago that it had discovered methane reserves totaling 2.3 tcf.

He said the discovery, which could be close to being declared commercial, may ease Colombia's tight gas supply situation and allow the country to take a new look at exports.

"About 15-30 tcf of methane gas exists in Colombia, but you have to determine how much of that is really going to be recoverable. It will probably be about half of that," Guzman opined, adding that significant production could still be years off.

"Except for the Drummond project, which is really advanced, it will take at least five years before you have any new commercial methane or shale gas production," Guzman said.

"Strategically, the majors may be interested, especially the ones that are already here. But it may attract more interest from niche players," said Guzman, whose firm was hired by ANH.

In March, ANH Director Armando Zamora said Colombia plans to offer rights to explore for shale gas within two years, meeting rising demand for such exploration areas.

"There has been a lot of demand for such prospects, people have been complaining," Zamora told reporters on the sidelines of the Latin Upstream 2010 conference in Rio de Janeiro. "We just need time to organize ourselves and get this done right."

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Watching Government: Did Maryland go too far?

12/08/2014 Maryland finally proposed a strategy to regulate unconventional natural gas exploration and production on Nov. 25. The question quickly moved from ...

National Forest in Va., W.Va., leaves fracing to state governments

11/18/2014 The George Washington National Forest in Virginia and West Virginia will allow some oil and gas activity using hydraulic fracturing and horizontal ...

US refiners could process more light tight crudes, study finds

10/06/2014 US refiners will have the capacity by 2020 to process 3.1-4.3 million b/d more of light, tight crude oil (LTC) than in fourth-quarter 2013, accordi...

IHS: Unconventional supply chain industries support growing number of jobs, revenues

09/23/2014 A diverse group of industries supporting unconventional oil and gas producers has reaped a large portion of the economic rewards from development o...

AAPG ICE: ExxonMobil outlines international approach to unconventional development

09/22/2014 Global energy demand is expected to increase 35% to 2040, translating to 120 billion boe/year, or nearly 350 million boe/d, stated Rocky Becker, vi...

AAPG ICE: Seismic reprocessing enhances potential for Russia's legacy basins

09/22/2014 Russia's Precaucus and Uralian Foreland basins are the oldest and most developed oil and gas producing regions in the country. As the "birthpl...

Devon Canada files with AER for Walleye oil sands project

09/05/2014

Devon Canada Corp. has submitted applications with Canada’s Alberta Energy Regulator for its Walleye steam-assisted gravity drainage project.

Supply complacency

09/01/2014 Complacency comes easily in the US when the price of crude oil sags while hostilities jar the Middle East, while Russia tests Western resolve over ...

IPAA survey: Regulation becoming more burdensome for oil, gas independents

08/04/2014 Regulations over the past 5 years have made operations more complex for independent oil and gas producers, according to a recent survey, Profile of...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected