Colombia's Response to Oil Rout: More Auctions and Fewer Rulesby
Hydrocarbons agency targets greater investment through reforms
Bidders to receive environmental, community, security data
Colombia plans to increase the frequency of oil license auctions to at least two a year and offer bidders more data and fewer rules as crude-producing nations scramble to attract investment amid slumping prices.
Under draft proposals that the National Hydrocarbons Agency, or ANH, will present to its board on Thursday, interested drillers will receive security, environmental and infrastructure data for available blocks, as well as the more standard geological and geophysical information, ANH President Mauricio De La Mora said in an interview.
Colombia has historically held bidding rounds every two years, the last in 2014. The policy shift comes amid the slump in prices, exploration budget cuts and concerns that the Andean nation’s daily output could slip below 1 million barrels. Rounds will offer a maximum of 25 blocks and no longer have minimum investment levels to attract more small and mid-sized companies.
“We need to be more competitive,” he said in Bogota on Tuesday. “The country is not in a position to receive investment every two years.”
Following a public consultation, the first auction under the new rules is scheduled for March.
The agency also plans to hold a continuous “open round” for additional blocks, enabling companies to negotiate directly with the authority year-round outside of the auctions.
Colombia has introduced a raft of support measures this year in a bid to aid drillers operating there including state-controlled Ecopetrol SA, Pacific Exploration and Production Corp. and Canacol Energy Ltd. The agency has received 180 requests for assistance under the measures, accepting 100, rejecting 65, with the rest pending a decision, De La Mora said.
“These measures, jointly with the dynamic rounds, will give us the opportunity to have greater investment in a more regular way,” he said.