COLOMBIA: Expanding Hydrocarbon Frontiers

A creation of the ANH in 2003 has ushered in a new era for Colombia’s oil and gas industry. The ANH has the role of Resource Administration and currently acts as the authority in charge of E&P licensing for hydrocarbons. It is now no longer required that new investors partner with the State’s oil company, Ecopetrol, which must itself now compete with other companies for acreage on a level playing field.

Along with this change, the ANH has introduced a contractual mechanism for E&P activities that is significantly different from the scheme previously offered by Colombia and created a new licensing procedure for application and assignment of blocks for E&P1.

Two new model contracts for exploration and production of hydrocarbons have been developed: The Exploration & Production (E&P) Contract and the Technical Evaluation Agreement (TEA). These new contracts, together with the licensing procedure, offer multiple means of entry into the oil & gas business in Colombia to companies of all sizes and interests. Companies can now either negotiate directly with ANH to sign E&P Contracts or TEAs in specially designated “Available Areas” or participate in periodically scheduled competitive licensing processes.

The E&P Contract is designed for companies that are prepared to enter into E&P activities in a specific area with a complete exploration program that includes exploratory drilling, through to developmet and production activities where successful. The TEA is limited to exploration activities only, where the aim is to evaluate the potential of a large area and identify specific areas for a subsequent E&P contract. The scope of this contract covers surface exploration activities to stratigraphic wells and provides a preferential right to enter into an E&P contract.

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