Ecopetrol, Colombia sign deal for offshore bloc in Caribbean

FILE PHOTO: The entrance of Ecopetrol's Castilla oil rig platform is seen in Castilla La Nueva, Colombia June 26, 2018. REUTERS/Luisa Gonzalez

BOGOTA (Reuters) - Colombia and its state-run oil company, Ecopetrol, said on Monday they have signed an offshore exploration and production deal for a nearly 400,000-hectare (988,000-acre) bloc in the Caribbean, the country’s first new oil and gas contract in more than four years.

The country recently modified its bidding system for offshore oil and gas exploration contracts and relaunched bidding for more than 20 possible production areas.

The government, which last held an auction in 2014, repeatedly postponed bidding that had been set to take place last year because of company requests to change contract specifications.

“Ecopetrol will invest more than $250 million in this offshore project,” Luis Miguel Morelli, the head of the National Hydrocarbons Agency, said in a statement, adding the deal was signed on March 1.

The company will mount at least two exploratory wells, the statement said, and is optimistic the bloc will yield gas reserves in the medium term.

The company said in its own statement it was planning to seek a partner for exploration and production in the bloc. Ecopetrol currently operates in five offshore blocs.

Ecopetrol last week reported a net profit for 2018 of 11.55 trillion pesos, about $3.7 billion, a five-year high and a 74.6 percent increase over the prior year.

Reporting by Julia Symmes Cobb; Editing by Steve Orlofsky