Colombia Invites Chinese Companies to Bid for Oil and Gas Projects

Strategic Insights -

Colombia's Minister of Mines and Energy Hernan Martinez has invited Chinese companies to bid for oil and gas exploration projects to help boost the country's oil production by half in six years. The country aims to raise its daily production to over one million barrels by 2015, with current output expected to reach close to 700,000 barrels a day this year. Colombia has been working to attract foreign investment, having allowed foreign firms to have 100 per cent stakes in oil projects and slashing royalties to as low as 20 per cent.

Key Takeaways:

  • Colombia aims to boost its oil production by half in six years, with a target of over one million barrels per day by 2015.
  • The country currently produces close to 700,000 barrels of oil per day, up from 618,000 last year.
  • Colombia has invited Chinese companies to bid for oil and gas exploration projects, with 170 exploration areas set to be opened for bidding.
  • The energy-rich nation has 110 million to 115 million hectares of onshore and offshore areas with sedimentary formations that may have trapped oil and gas.
  • 40 million to 45 million hectares of these areas are undergoing exploration.
  • China Petrochemical Corp and Sinochem have already invested in Colombian oil projects, with the latter buying British-based Emerald Energy for US$876 million.
  • Successful bidders will be charged US$20,000 for small blocks and US$100,000 for medium-sized blocks, with firms able to collect geological data at no cost in blocks where little data has been gathered.

Statistics:

  • Colombia aims to produce over one million barrels of oil per day by 2015.
  • Current output is expected to reach close to 700,000 barrels a day this year.
  • 170 exploration areas will be opened for bidding.
  • Colombia has approximately 110 million to 115 million hectares of land with sedimentary formations that may have trapped oil and gas.
  • 40 million to 45 million hectares of these areas are undergoing exploration.
  • China Petrochemical Corp acquired Colombian oil firm Omimex for US$800 million in 2006.
  • Sinochem bought British-based Emerald Energy for US$876 million in August.
  • Successful bidders will be charged US$20,000 for small blocks and US$100,000 for medium-sized blocks.
  • Firms can collect geological data at no cost in blocks where little data has been gathered.

Sources:

  • South China Morning Post
  • BP Statistical Energy Review
  • National Department of Planning director-general Esteban Piedrahita
  • Colombia's Minister of Mines and Energy Hernan Martinez
  • China Petrochemical Corp
  • Sinochem
  • BP