Colombia plans to auction 178 blocks
Colombia seeks to auction 178 oil exploration and production blocks with the goal of boosting oil output to 1 million b/d in 2015, according to a senior government official.
OGJ Oil Diplomacy Editor
LOS ANGELES, Oct 19 -- Colombia seeks to auction 178 oil exploration and production blocks with the goal of boosting oil output to 1 million b/d in 2015, according to a senior government official.
Armando Zamora, director general of Colombia’s Agencia Nacional de Hidrocarburos (ANH), said three areas will be on offer in the 2010 Open Round. He said Colombian authorities expect the total investment commitment to be less than last year’s $1 billion.
Zamora told local media that Colombia’s goal is "much more modest" in the 2010 Open Round because the world is just starting to emerge from the global financial crisis. He said Bogota hopes 20-30 blocks can be awarded with investment commitments of $50-100 million.
Analyst IHS Global Insight underlined the importance of Colombia’s modest expectations.
“Colombia did not hold any licensing rounds in 2009, reflecting concerns that the credit crunch and oil price volatility could dissuade some potential bidders,” IHS Global Insight said. “The 2010 round will, therefore, be the first major test of investor interest in the sector following the global economic crisis.”
Zamora said areas available in the upcoming round include “74 blocks that are part of the Mini Round, which are mature areas. These are less risky because there's more information so companies can go straight to it but with smaller prospects.”
He said another 31 blocks correspond to new prospects, which have new information and interesting potential. The remaining 73 blocks, he said, are "technical evaluation (areas), which...have less information and more risk but greater potential. Investment in these is greater.”
IHS Global Insight suggested that even if the high-risk blocks see few takers, “the acreage in mature basins should be of interest to the many small independents that have shown an increased interest in Colombia in recent years due to the relatively stable legal framework and short project cycles for small finds.”
Meanwhile, according to Zamora, Colombia’s oil production rose to 680,000 b/d in September,and expectations are that output will rise to 700,000 b/d before yearend. He estimated crude oil production would grow by some 80,000 b/d/year to reach 800,000 b/d in the next year or two.
Zamora, without adding much detail, predicted even greater output.
"In 2015 (the projection is for) 1 million b/d,” Zamora said, adding that his country will have to improve and expand its oil infrastructure in order to achieve its target.
“There are three companies in particular that are achieving interesting results in this sense: Pacific Rubiales and Petrominerales in the Eastern Plains region and Gran Tierra (Energy) in (the southern province of) Putumayo," Zamora said.
Zamora’s remarks coincided with the release of an operational update by Pacific Rubiales, announcing another oil discovery at the Quifa-10 well in the Llanos basin (OGJ Online, Oct. 15, 2009).
The well extends the discovery of prospect "H" to the north and prospect "E" to the south, resulting in a total hydrocarbon column of more than 100 ft for both prospects, with an average net pay of 24 ft, according to Pacific Rubiales.
“News of a new discovery at the Quifa Block will be welcomed by the government, which has been actively promoting investment in the oil sector in a bid to boost reserves and extend the country's oil self-sufficiency status for a few more years,” IHS Global Insight observed.
The Quifa Block is a joint venture between Pacific Rubiales’ wholly owned subsidiary Meta Petroleum (60%) and Colombia’s state-owned Ecopetrol (40%).
Contact Watkins at email@example.com.