Colombia will invite international investors to bid for the first time on exploration licences for areas of the country believed to contain non-conventional or shale crude, Reuters are reporting.
Latin America’s fourth largest oil producer aims to raise around $2.6 billion by selling more than 22 million hectares for exploration and production at the July 23 auction, the National Hydrocarbons Agency (ANH), which is overseeing the auction, has said.
Crude output rose 6.6 percent to just over 1 million barrels per day in 2013, most of which was extracted by state-owned Ecopetrol.
Canadian-listed Pacific Rubiales is the largest of a number of private sector players, among which are Chevron, Shell and Exxon Mobil.
Attracting more investment is critical as Colombia’s reserves had dipped to 2.38 billion barrels by the end of 2012, roughly equivalent to six years’ output at current production levels, according to ANH data. Neighboring Venezuela’s reserves are now estimated to be larger than those of Saudi Arabia.
Security in Colombia has improved vastly after a military offensive lasting more than a decade and heavily backed by the United States, but the FARC and ELN guerrillas perpetrated regular bomb attacks on oil pipelines last year, disrupting transport.
Two potentially large finds late last year gave weight to Colombia’s belief that there are large recoverable reserves in the central province of Meta, an area that will receive a share of Ecopetrol’s $75 billion investment through 2020. The company aims to raise its production 30 percent by then.
Ecopetrol announced in December that an area it owns jointly with Canada’s Talismann Energy could contain around 1.3 billion barrels of crude, about a 10th of which was likely to be recoverable.
In the same month, Ecopetrol declared viable a separate area, Cano Sur Este, which it said has proven reserves of 22.4 million barrels. The 2014 round will also put up for auction areas of methane gas is associated with coal, usually burned for power generation.
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