Please find below the latest news on the Colombian government’s modifications to the contracting model for hydrocarbons exploration.
Colombia has changed the contracting model for offshore hydrocarbons exploration and production. Additionally, it has reactivated a system for companies to apply for exploration in areas of their interest, allowing for contracts and blocks to be granted soon, the government reported on Tuesday.
In Colombia, exploration and production contracts have not been signed on new areas for more than four years, so the government seeks to promote oil exploration as part of its strategy to increase its reduced reserves, currently only enough to supply for less than six years of consumption.
The adjustments for off-shore exploration are fundamentally about naming an arbitration tribunal to resolve disputes, as well as implementing an additional participation percentage of at least 5 percent for Colombia at the time of contract extension, in addition to requiring for companies to increase their social investment in production areas.
The president of the National Hydrocarbons Agency (ANH), Luis Miguel Morelli, said that the changes are expected to result in the signing of nine off-shore exploration contracts with companies such as Anadarko, Shell, Repsol, ExxonMobil and Ecopetrol.
Additionally, the ANH decided to reopen the Permanent Area Assignment Process (PPAA) that enables companies to apply to explore in areas of their interest. It also defined 20 strategic blocks with great potential for companies interested in exploring them.
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