Seven companies bid for eleven contracts in Colombia oil auction

BOGOTA (Reuters) - Seven companies have put in bids for 11 oil exploration contracts in Colombia, the government said on Tuesday, as the Andean country seeks to revitalize its oil sector.

FILE PHOTO: The installations of Ecopetrol's Castilla oil rig platform in Castilla La Nueva, Colombia. Picture taken June 26, 2018. REUTERS/Luisa Gonzalez/File Photo

Frontera Energy, Geopark, Ecopetrol, Hocol, Parex Resources, Gran Tierra Energy and ONGC Videsh have put in a total of 19 offers, the national hydrocarbons agency said. Ten of the blocks are onshore and one is offshore.

At least 22 companies were qualified to bid on 20 blocks on offer in the auction. Results of the bidding are expected in mid-July.

“For the first time in the history of Colombia an offer of blocks has obtained 55% success,” said agency head Luis Miguel Morelli.

Qualified companies which did not bid will have access to competitors’ offers and can present alternative ones, Morelli said.

Other qualified bidders include CNE Oil and Gas, Occidental Petroleum, Hunt Overseas Oil Company, Amerisur Exploracion, Mansarovar Energy and Noble Energy.

State-run Ecopetrol and its subsidiary Hocol put in the best bids on five of the 11 blocks, Ecopetrol said in a statement later on Tuesday.

Ecopetrol bid for the offshore GuaOff-10 block, it said, while Hocol placed a bid on the COR-9 block. Hocol also bid on the LLA 86, 87 and 104 blocks in partnership with Geopark.

“The best offers presented today in Bogota put Grupo Ecopetrol in first place for eligibility in this phase of the process,” the statement said.

Colombia expects to receive some $1.5 billion in oil investment over the coming months from this round of bidding as well as a recently launched permanent bidding process, Morelli has said.

The government hopes the new process and modified contractual terms for offshore exploration will boost its long-stagnant oil sector. Offshore and onshore exploration ground to a halt when global prices slumped.

Companies including Royal Dutch Shell, Noble, Exxon, Repsol and Parex have already signed on to operate new blocks this year.

The country’s crude reserves were up 9.9% last year to 1.96 billion barrels, or equivalent to 6.2 years of output. The government wants to increase reserves to at least 10 years equivalent.

Average oil production is 865,000 barrels per day, half of which is exported.

Ecopetrol said last month its crude exports to the United States rose nearly 25% in the first quarter because of lower supply from neighboring Venezuela and higher production.

Reporting by Luis Jaime Acosta and Julia Symmes Cobb; Editing by Rosalba O’Brien and Phil Berlowitz