BOGOTA Feb 19 Colombia will for the first time auction areas potentially containing non-conventional or shale crude in its 2014 oil round in July that it is launching on Wednesday as it seeks to sustain a wave of foreign investment into the sector.
Latin America's No. 4 oil producer aims to raise around $2.6 billion by selling more than 22 million hectares for exploration and production at the July 23 auction, the National Hydrocarbons Agency (ANH), which is overseeing the auction, has said.
Crude output rose 6.6 percent to just over 1 million barrels per day in 2013, most of which was extracted by state-owned Ecopetrol. Canadian-listed Pacific Rubiales is the largest of a number of private sector players, among which are Chevron, Shell and Exxon Mobil.
Attracting more investment is critical as Colombia's reserves had dipped to 2.38 billion barrels by the end of 2012, roughly equivalent to six years' output at current production levels, according to ANH data. Neighboring Venezuela's reserves are now estimated to be larger than those of Saudi Arabia.
The ANH will hold an international road show taking in London, Houston and Jakarta to tout improved security and promising geological potential, which recently have helped lure record foreign investment in a country once shunned at the height of a still-ongoing war with its Marxist guerrillas.
Security in Colombia has improved vastly after a military offensive lasting more than a decade and heavily backed by the United States, but the FARC and ELN guerrillas perpetrated regular bomb attacks on oil pipelines last year, disrupting transport.
Two potentially large finds late last year gave weight to Colombia's belief that there are large recoverable reserves in the central province of Meta, an area that will receive a share of Ecopetrol's $75 billion investment through 2020. The company aims to raise its production 30 percent by then.
Ecopetrol announced in December that an area it owns jointly with Canada's Talismann Energy could contain around 1.3 billion barrels of crude, about a 10th of which was likely to be recoverable.
In the same month, Ecopetrol declared viable a separate area, Cano Sur Este, which it said has proven reserves of 22.4 million barrels. The 2014 round will also put up for auction areas of methane gas is associated with coal, usually burned for power generation.