Warning: "continue" targeting switch is equivalent to "break". Did you mean to use "continue 2"? in /home/procolombia.co/slash_sites/news/public_html/sites/all/modules/contrib/service_links/plugins/service_links_sprites.module on line 85
The oil and gas sector continues to reopen | Press Room | PROCOLOMBIA
The oil and gas sector continues to reopen

Categoría de noticia: 
COVID-19
21 May 2020
The Colombian government has taken several measures to manage the crisis in the oil and gas sector caused by the fall in international WTI and Brent prices, reaching up to 80% and 70% respectively, since December 2019, as well as the decrease in the global demand for crude oil due to the COVID-19 pandemic

The drop in international prices has caused a reduction in Colombia’s crude oil production of around 2.39%, from 878 kpbd to 857 kpbd in April 2020. Additionally, the current health emergency has affected the main variables, such as investment, exploration, production, and expected price, as shown below: 

 

Production (kpbd)

exploration

Price (USD/BBL)

Planned 2020 target

900

42 wells

60-65

Adjusted 2020 target

750-850

20-30 wells

25-45

Source: Wood Mackenzie, 2020.

Among the government measures there are tax reliefs, which include the extension of the income tax deadline and the automatic VAT refund. Additionally, through Agreement 002 of the National Hydrocarbons Agency (ANH, in Spanish), the following measures are adopted:

¬    Deadline extension for the payment of fees by block operators.
¬    Postpone the call for tenders schedule of the Permanent Process for Area Allocation (PPAA, in Spanish) and postpone the deadlines for exploration debts.
¬    Operators are free to redirect the investments in projects at a standstill or other upstream activities.
¬    Rapid follow-up of the VAT discounts, and flexibilization of the rules for letters of credit for block commitments.

As well as these measures, it is a priority for the government, as head of the ANH, to increase reserves through the exploration and drilling of blocks in the Llanos basin in the Casanare department, and to keep the PPAA license process active.

This year, in the third cycle of the PPAA, bids will be made on at least 50 blocks, distributed in 17 of the 24 (onshore and offshore) basins, which together add more than 56 million hectares.  In 2019, the ANH signed 31 exploration and production contracts, which represent investment commitments of more than US $2.714 billion. 

Areas located in the departments of Vichada and Putumayo, as well as offshore areas, are attractive for this new round. There are 29 companies registered for this process, including Ecopetrol, Parex Resources (Colombia) Ltd, Gran Tierra Energy Colombia, Geopark Colombia S.A.S., Amerisur Exploración Colombia Limited, Noble Energy Limited, Petróleos Sud Americanos, and Cnooc Petroleum Colombia Limited.

For more information on the PPAA and schedule, please consult: https://www.anh.gov.co/Asignacion-de-areas/Paginas/PPAADefinitivo.aspx

The Pacific regasification plant stands out as an investment opportunity in natural gas, which will be granted by the Mining and Energy Planning Unit (UPME, in Spanish) to a private company in the second half of 2020, and it will begin operations in 2024. The cost of the plant and the gas pipeline amounts to US $600 million. Companies such as Grupo de Energía de Bogotá (GEB) and TGI have expressed an interest. The cost of the plant will be paid through gas and electricity fees.

Descargas