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Colombia woos foreign investors



By Upstream staff 

Colombia is set to kick off a licensing round offering smaller oil and gas blocks in a bid to attract foreign investors - in contrast to its neighbours Venezuela and Ecuador which are nationalising their upstream sector.

Colombia is promoting three bidding rounds. It has also shortlisted 20 integrated oil companies for larger heavy oil projects, a senior government official said.

"We are opening another bidding round in the next few weeks and it is called the Mini Round," Armando Zamora, director general of Colombia's oil and gas agency, Agencia Nacional de Hidrocarburos (ANH), told Reuters in an interview in London.

"We are offering about 100 blocks. They are mostly oil, heavy oil. So we offer 151 blocks this year.”, said Zamora.

ANH is running three rounds this year.

"One is private, invitation only for heavy oil projects. Twenty large companies have been shortlisted," he told the news agency.

Zamora said the shortlist included Shell, ExxonMobil, Chevron, Cepsa and Lukoil.

The private round would be awarded in June, he said.

Colombia is producing about 550,000 barrels per day of oil and exporting about 250,000 bpd, Zamora said.

Output fell from 820,000 bpd in 1998 to 520,000 bpd in 2005 partly because security issues delayed investments, he said.

Colombia aims to boost output to 1 million bpd in 2020 by attracting foreign investors and most of the new output would be exported, Zamora said.

Its policy to attract foreign companies contrasts with resource nationalisation in countries like Venezuela, where an energy sector nationalisation has driven out two of the world's largest energy companies ExxonMobil and ConocoPhillips .

Colombia would not follow Venezuela's model, Zamora said.

"Resource nationalism is not an issue in Colombia. We are open because we would like to attract foreign investors. We need capital, technologies, expertise and enterprise," he said.

"That's why we have transparent, straight-forward profit sharing policy." Colombia shares earnings from oil and gas projects on a 50:50 basis with foreign companies.

The oil industry attracted $3.5 billion of foreign investment last year and is Colombia's largest source of income tax and its biggest foreign currency earner.

The Mini Round follows the most recent oil and gas licensing round called Colombia Round 08, in which ANH offered 43 onshore blocks in four basins, one near the border with Venezuela.

Zamora is visiting London this week to promote the Colombia Round, in which ANH expects to award about 20 blocks after it closes in September.

"We received quite a lot of interest. It is a long list of companies, mostly independent."

They included Teikoku Oil, a part of Japan's largest oil and gas exploration company Inpex Holdings, Zamora said.

Zamora said Colombia's production was shifting from large projects to smaller deposits and ANH wanted to give opportunities to smaller independent companies.

Friday, 04 April, 2008, 17:39 GMT  | last updated: Saturday, 05 April, 2008, 10:18 GMT

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