Anh Colombia

ANH revamps the rules and the exploration and production contract terms for Colombia’s 2021 licensing round


The competitive process will run until November 2021 & consists of a direct offer of 28 areas by the National Hydrocarbons Agency (ANH) và some 600 blocks mở cửa for nominations by interested operators.While gas production has remained stable, the country’s economy has been affected by a 25% decline in crude oil production since the outbreak of the COVID-19 pandemic and the oil market crisis in early 2020, followed by civil protests và blockades in Spring of 2021.

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Oil output đầu ra fell from a high of nearly 900,000 barrels per day (bopd) in early 2020, down to a low of 650,000 bopd in June of 2021.The Colombian Ministry of Mines & Energy & ANH are collaborating in an effort lớn reactivate a strategic sector for the economy và the public finances. The rules for companies to pre-qualify as well as the contract terms have been reviewed to improve the 2021 process lớn attract new investments in exploration & production.In order lớn facilitate the pre-qualification process, operators that qualified for the 2020 process will maintain their status. New participants will be able khổng lồ pre-qualify based on the financial results and operating performance achieved at the kết thúc of 2019. This measure takes into tài khoản the fact that the financial and operational results of 2020 may not be a true representation of historical financial và operational capacity of the companies engaged in the oil và gas upstream sector. The contract terms have also been reassessed, with the newly designed contract allowing for the separation of the exploration và production stages, according investors more flexibility in the execution of the exploration work program, while ensuring full compliance with contractual timelines và regulatory requirements once they proceed with the development of discoveries.

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In addition, the new contract enhances the adherence to lớn its private law foundations that put the state on an equal footing as the operators for dispute resolution purposes. While no changes are introduced in relation to fiscal terms, Colombia already has the lowest government take in the region according to data from IHS Markit. The ability of the components of the fiscal system khổng lồ adjust to lớn changes in production volumes and international commodity prices reduces the degree of risk investors take in the oil và gas sector in Colombia. According to IHS Markit Vantage database, at a country wide portfolio màn chơi the government take for upstream projects in Colombia is the lowest in Latin America. Out of 2,000 oil và gas projects in the region, the government take for the 269 projects located in Colombia was 46%, placing it ahead of other major oil and gas producers in Latin America from an investor perspective.

 


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For operators present in Colombia và those looking for good opportunities in Latin America, the changes in effect for Colombia Round 2021 make it a more attractive prospect than ever before.