(Adds auction results, government comment, byline)
By Peter Murphy
CARTAGENA, Colombia, July 23 Colombia drew bids
for fewer than one third of the blocks it offered at its 2014
oil round on Wednesday, the government said, with most interest
in more familiar and explored regions, which may make it tougher
to boost stagnant reserves.
Royal Dutch Shell Plc, Exxon Mobil Corp,
Anadarko Petroleum Corp and Spain's Repsol SA
were among the biggest of 19 companies that bid for 26 of 95
blocks offered by Latin America's fourth-biggest oil producer.
The blocks are expected to bring around $1.4 billion in
investment, the Energy Ministry and National Hydrocarbons Agency
said, hailing as "positive" results that fell a bit short of the
30 percent of blocks on which they expected bids.
Officials had estimated that 40 percent of the blocks would
be auctioned off, and some participants expressed surprise that
there was not more interest in offshore blocks or high risk
high-reward areas for which little research exists.
"This is a round of frontier areas. Companies are cautious
in frontier areas. These are very unexplored areas," Orlando
Cabrales, vice minister for energy, told reporters.
The bidding round is important to Colombia, with about 1
million barrels of daily output, as an opportunity to draw
investment and boost reserves that have stagnated at around
seven years' worth of production or 2.45 billion barrels as of
the end of 2013.
Cabrales said the oil round took place at a time when the
oil industry is focusing more on assets offering short-term
returns. Consistent with that, smaller, more familiar areas
drew the strongest bidder interest on Wednesday.
Among the highlights of the bidding was Statoil's entry into
Colombia with a one-third stake in the Col 4 offshore area along
with Repsol and Exxon Mobil as partners. Anadarko was a lone
bidder for the Col 1 offshore area.
Anadarko will explore an area equivalent to 32,000 square
kilometers, roughly the total area explored in Colombia in a
typical year, said Javier Betancourt, president of the National
Hydrocarbons Agency (ANH).
State owned Ecopetrol was the highest bidder for five
blocks, one in partnership with Shell.
The definitive list of winning bids and awarding of rights
will take place on August 11, the ANH said, once offers have
been certified in conformity with the government's criteria. A
preliminary list of eligible bids will be issued on July 31.
Toronto-listed Parex Resources was the highest
bidder for the only one of 18 non-conventional, or shale, areas
that was auctioned off. Colombia expects interest in its shale
to rise once pioneering companies begin to show results.
"In non-conventional we were expecting more. With
non-conventional it's not a question of whether the resources
exist but whether investment can be justified," said Betancourt.
Bids were submitted as a percentage of production that
companies offered to give to the government together with the
sum the bidder was prepared to invest in further exploration.
(Editing by Matthew Lewis)