Colombia to offer acreage on rolling basis

OREANDA-NEWS. Colombia plans to introduce new upstream licensing rules following a disappointing upstream round in 2014 and industry calls for more competitive terms.

"We plan a continuous and dynamic process for assigning acreage," national hydrocarbons agency (ANH) president Mauricio de la Mora said.

Under the new licensing process, companies would enter into direct negotiation with the ANH on a rolling basis, "with a legal framework that we're currently structuring."

His remarks suggest Bogota would discard its current approach of holding annual, high-profile rounds.

In last year's round, Colombia awarded 26 blocks out of 95 on offer.

The ANH says it is also looking at revising fiscal terms. "We're working with the finance and energy ministries with the intention of establishing tax incentives," de la Mora said.

The ANH expects to introduce the new measures within the next two months.

A modification of Colombia's licensing process is the latest in a string of measures aimed at retaining upstream investment.

In March, ANH introduced measures allowing companies to extend contract periods and transfer investment commitments between blocks. Some tax incentives have also been approved for offshore exploration.

Colombia's oil chamber ACP has repeatedly warned that declining exploration could erode oil production to below 700,000 b/d by 2021, from a current 1mn b/d.

Bogota is banking on frontier offshore and unconventional areas to spark a rebound.