What is the ANH?
In 2003, the restructuring of the Colombian oil and gas sector was consolidated through the creation of the National Hydrocarbons Agency. This was in response to the critical situation that Colombia was experiencing as a result of the decrease in oil reserves, which would eventually lead to the country becoming an importer of crude oil. See Decree 1760 of 2003.
This restructuring included the decision to make Ecopetrol more competitive by separating its dual role as regulatory entity and oil company. For this reason, the decision was made that it would only engage in exploring, producing, transporting, refining and marketing hydrocarbons; in other words, it would work exclusively in the oil business, in all phases of the chain, competing on equal terms with other companies from the industry.
As a result, the National Hydrocarbons Agency took on Ecopetrol's work as administrator and regulator of the nation's hydrocarbon resources, and began transforming Colombia into a country that was once again prospective and attractive to domestic and foreign investors. Nevertheless, Ecopetrol kept all the areas it had under direct operation and the Partnership contracts signed through December 31, 2003.
Another fundamental change was the adoption of the new contract for royalties, taxes and fees, which replaced the partnership contract. This model includes three (3) different and separate stages: exploration, evaluation and operation, whose duration is aligned with international standards and generates a 50% to 60% share for the State.
The economic terms of the new contract type make Colombia one of the most attractive countries in the world, both in terms of government share and investor profits. Moreover, the areas are assigned through modern, transparent and efficient procedures, employing suitable administration and monitoring mechanisms, which ensures processes that meet high international standards.
Similarly, the model is suitable for large companies and projects, as well as for small and medium-sized companies, opening a wide range of opportunities for all investors. On the other hand, the technical evaluation agreement (TEA) was also introduced, through which a large area can be assigned for surface work, with the aim of obtaining better information on the presence of hydrocarbons in a specific area, and this can last up to 18 months. The TEA contractor has first refusal on entering into an exploration and production contract in that area.
Throughout 2003, all the Agency's efforts were focused on designing strategies that would return the sector to competitiveness, once again putting the country on the world oil map, increasing the prospectivity rate and attracting private investors.
As a result of this important work, a large number of contracts have been signed since the new contractual system was adopted in June 2004. Additionally, the implementation of the new contract type has brought large companies such as BHP Billiton and ExxonMobil to the country, which hadn't carried out exploration work in Colombia for over 10 years.
Exploratory activity has increased after the dramatic fall that had been experienced until the year 2000. Since the creation of the ANH, there has been an increase in the area under exploration, the number of E&P contracts signed, the equivalent 2D kilometers of seismic data acquired, and the number of wells drilled. Similarly, significant resources have been invested in the acquisition of geological information that makes it possible to identify opportunities in mature fields and frontier areas.
Currently, Colombia offers an attractive system, economic and political stability (among the best in Latin America), a fully operational agency, high confidence among investors and great geological potential. Taking into account the proven, probable and possible reserves, as well as the prospective resources identified in areas under evaluation, exploration and production, the total comes to 10,400 MBOE (million barrels of oil equivalent). With regard to potential, this is between approximately 9,000 and 140,000 MBOE (million barrels of oil equivalent).
1. Government and stakeholders: energy self-sufficiency and resource generation / hydrocarbon activity that’s environmentally friendly and respectful of communities’ rights.2. Financial: appropriate management and commercialization of the ANH’s royalties and fees.3. Processes: knowledge of hydrocarbon potential / promotion of investment / monitoring of oil & gas contracts4. Learning and growth: continuous improvement, a team that gets ongoing training, and an effective working environment.
Duties:As a consequence of the change in legal nature, as per Decree 714 of 2012 issued by the Ministry of Mines and Energy, the duties of the National Hydrocarbons Agency (ANH) are as follows:
1. Identify and evaluate the country’s hydrocarbon potential. 2. Design, evaluate and promote investment in exploration and operation activities relating to hydrocarbon resources, in accordance with international best practices. 3. Design, promote, negotiate, enter into and manage contracts and agreements for the exploration and operation of hydrocarbons owned by the Nation, with the exception of the partnership contracts that Ecopetrol entered into through December 31, 2003, and follow up on the fulfillment of all obligations provided therein. 4. Allocate the areas for exploration and/or operation, subject to the forms and types of contracting that the National Hydrocarbons Agency (ANH) adopts for this purpose. 5. Support the Ministry of Mines and Energy in developing government policy on hydrocarbons, preparing industry plans and fulfilling the respective objectives. 6. Structure studies and research in the areas of geology and geophysics, to generate new knowledge on Colombia’s sedimentary basins with a view to planning and optimizing the use of hydrocarbon resources and generating exploration and investment interest. 7. With regard to exploration and operation contracts, agree on the terms and conditions subject to which contractors will undertake programs for the benefit of communities located in the areas of influence of the relevant contracts.8. Support the Ministry of Mines and Energy and other competent authorities in matters related to communities, the environment and safety in the areas of influence of hydrocarbon projects. 9. Set hydrocarbon prices for purposes of the settlement of royalties. 10. Manage the State’s share, in kind or in cash, for its hydrocarbon volumes in exploration and operation contracts and agreements, and other contracts that the Agency has or will enter into, including royalties, during the course of which it may dispose of such share by entering into contracts or transactions of any nature. 11. Collect, settle and transfer the royalties and monetary compensation payable to the Nation for hydrocarbon operation. 12. Withhold the sums that correspond to the participating entities on account of shares in production and royalties, bound for the Funds set out in the Constitution and the Law, and perform the deposits and reimbursements under the terms established therein.
ANH institutional video