September 26, 2019 / 6:16 PM / 24 days ago

Colombia hopes to sign 20 contracts in coming oil round: official

BOGOTA (Reuters) - Colombia hopes to sign 20 contracts for oil exploration and production rights in its coming auction, the head of the national hydrocarbons agency said on Thursday, as it looks to possible offshore success over the next 18 months.

Luis Miguel Morelli Navia, head of Colombia's National Hydrocarbons Agency (ANH), speaks to Reuters in Bogota, Colombia September 26, 2019. REUTERS/Luis Jaime Acosta

The country is offering 59 blocks in the auction, its second this year. Five of the blocks are offshore, and 24 have potential for gas production.

“We hope to sign 20. Normally the success rate for assignments worldwide is 30%,” ANH head Luis Miguel Morelli said in an interview. The round could bring investment of $800 million.

Twenty-six companies are likely to pre-qualify for bidding, Morelli said, including four new companies from the United States, Canada and Norway.

The results of work on four new offshore wells set to be perforated in the next 18 months will be “fundamental” to future exploration and efforts to increase the country’s gas reserves, Morelli said.

Of the four blocks, one is operated by Shell and Noble Energy, one by state-run Ecopetrol and two by a partnership between Ecopetrol, Repsol and Exxon Mobile.

“That’s the big bet. If these projects are successful immediately it generates appetites for the Caribbean coast,” he said. “It gives us a great opportunity to recover reserves or incorporate new reserves, in gas more than anything.”

The information that Shell and Noble have gathered for development of their $120 million block “shows a very large prospectivity more than anything in gas but also that it’s possible there are liquids,” Morelli added.

Offshore could be key to attracting new companies to the Andean country, Morelli said.

“We would like for more businesses that are strong in offshore work to come to Colombia; that will depend a lot on the seismic results,” he said.

Workover efforts at existing onshore oil fields could add 20,000 barrels per day to Colombia’s production by the end of next year, he said. Output hovers around 860,000 bpd.

The country hopes to attract investors in China, India, Australia, the United Kingdom and others next year, positioning itself as the best country in Latin America for oil investment amid political troubles in neighboring countries.

“We must take advantage of this moment, because if Venezuela changes politically, if there is a transformation in Venezuela, the opportunities for Colombia will be notably reduced,” Morelli said.

Reporting by Julia Symmes Cobb and Luis Jaime Acosta

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