Thursday, January 28, 2016

Developments in Colombia's oil indsutry

Earlier this week, Colombian state-owned oil company Ecopetrol announced that it had established a new company called Ecopetrol Costa Afuera Colombia S.A.S. to carry out its offshore oil exploration and production activities. This legal reorganization allows Ecopetrol to take advantage of recent tax break opportunities added to Colombian law.

El Espectador noted that this announcement comes in the wake of the discovery of an “important” gas field in the Caribbean. Although no one knows yet exactly how large the gas field is, this announcement demonstrates that Ecopetrol is extremely bullish about its prospects.

In other oil-related news, the Colombian National Hydrocarbons Agency (ANH) announced that oil blocks in Colombia would no longer be auctioned off periodically in large “rounds.” The ANH explained that oil companies had been frustrated by having to wait for scheduled rounds in order to acquire oil fields in the country. El Espectador explained that another change is the introduction of Direct Assignments with Counteroffer. In this system, the ANH can receive a proposal from an oil company for a specific area, and then open up that area publicly for counteroffers. The report also noted that Ecopetrol solicited extensive feedback on the new rule changes.


Lastly, the Colombian chamber of commerce for the oil industry, Campetrol, spoke with El Heraldo about how Colombia is one of the most expensive countries in the world for extracting oil. According to Campetrol, Norwegian consulting company Rystad Energy dig a studied of more than 65,000 oil fields, and listed Colombia’s oil as the seventh-most expensive in the world.

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