Spain’s Repsol and US major ExxonMobil have signed contracts with Colombia’s National Hydrocarbons Agency (ANH) for exploration and production blocks in the Caribbean Sea.
The multinational operators are the latest to be awarded blocks as part of the South American country’s push to increase oil and gas output. ANH this year has signed five offshore contracts that altogether could yield $1.6 billion in investments if the accompanying exploratory programs reach full development, the agency said.
The latest pacts have Repsol gaining a 50% interest as operator in the 4,000-sq-km GUA OFF-1 block, located 78 km off the department of La Guajira near Venezuela. Colombian state-owned Ecopetrol holds the other 50%.
Repsol also takes operatorship with a 50% stake of the 4,000-sq-km COL-4 block, located 100 km off the department of Bolívar. ExxonMobil owns the half of the block's interest.
The contracts include an exploratory program that, if carried out in its entirety, could result in more than $700 million in investments, ANH said.
“Our company has operated in Colombia for more than 100 years, and the signing of this contract reinforces our interest in identifying opportunities to expand our operations in the country, both onshore and offshore,” said Fernando Sarria, president of ExxonMobil Exploration Colombia, in an ANH statement. “We hope to work with our ally Repsol to continue evaluating the potential of the COL-4 block.”
The contracts show “the commitment of the government of President [Ivan Duque Marquez] to the revival of the oil sector,” Diego Mesa Puyo, Colombia's deputy energy minister, said in the same statement.
ANH in March announced that it had awarded Blocks COL-3 and GUA OFF-3 in the Caribbean Sea to Shell, after which Noble Energy farmed in to the blocks and became operator of both. Also last month, Ecopetrol signed a contract for Block COL-5 near Anadarko Petroleum's Purple Angel gas discovery.
In agreements involving onshore blocks, ANH said this week that Calgary-based Parex Resources had been transferred a 50% interest and operatorship of the Aguas Blancas, Boranda, and De Mares areas near the historic La Cira Infantas field in the Middle Magdalena Valley. Ecopetrol holds the remaining stakes.
ANH estimates the transfer will result in investments of more than $150 million over 12 months, including the drilling of at least 15 wells.
Colombia recently launched a new, permanent bidding process after revising terms for E&P contracts. Bidding was opened for 20 blocks, but companies can now also bid on their own time, outside of auctions, on other areas they deem prospective.
The country in January produced just below 900,000 B/D of oil, data from its Ministry of Mines and Energy indicate. Neighboring Venezuela, currently embroiled in political turmoil, has the largest proved oil reserves in the world, and Guyana’s offshore sector has taken off with ExxonMobil tallying a dozen oil and gas discoveries since 2015.