Colombia announces big changes to oil contracts
BOGOTA, March 19 (Reuters) - Colombian Mines and Energy Minister Orlando Cabrales on Thursday announced sweeping
changes to oil contracts granted to private sector companies in a bid to ensure the country remained self-sufficient in
hydrocarbons well into the next century.
The main beneficiaries of the changes are set to be those firms who hold so-called sliding scale contracts, including British
Petroleum Co Plc (quote from Yahoo! UK & Ireland: BP.L).
Under the terms of the new deal, those companies which have not yet fully explored blocks assigned to them under the sliding
scale contract can hand back areas and automatically be reassigned 25 percent of that area under more lucrative R-factor
contract terms.
The remaining 75 percent of the returned area will then be put up for public auction, Cabrales said at an evening press
conference.
Until now, contracts have been awarded to private sector associates as a result of one-to-one negotiations with Ecopetrol.
Cabrales said, however, that the first open auctions -- whereby companies offer a certain split of production for Ecopetrol --
would be held in June.
The plan was outlined last October as a way of stimulating exploration and production in hitherto unexplored or marginal areas.
Cabrales also announced that Ecopetrol had this week awarded four offshore blocks, which together cover the entire Atlantic
coast out to a depth of 9,900 feet (3,000 m).
He declined to name the companies involved but Texaco (TX - news), Shell (RD.AS) (quote from Yahoo! UK & Ireland: SHL.L)
and Occidental Petroleum Corp (OXY - news) have been actively considering offshore opportunities.
The Mines and Energy Minister also used the press conference at the presidential palace in downtown Bogota to announce
that Ecopetrol had granted BP commerciality on its Pauto field, part of the Piedemonte block, in eastern Colombia.
He said, however, that Ecopetrol had asked for additional details about BP's application for commerciality on the neighboring
Florena field and said the request would be reconsidered ''within the next three months''... |
