Adds Shell statement.
Shell will acquire a 50pc operating stake in three deepwater blocks off Colombia's Caribbean coast under an agreement with Colombian state-controlled Ecopetrol.
Shell will operate the contiguous Fuerte Sur, COL-5 and Purple Angel blocks. Ecopetrol will retain a 50pc stake.
The deal announced today awakens a natural gas play that had been languishing despite three previous discoveries, Kronos in 2015 and Purple Angel and Gorgon in 2017, which were thwarted because of development cost concerns.
Shell and Ecopetrol plan to drill a well to delineate the gas resource at the end of 2021, followed by a production test.
"If these activities are positive, these discoveries could be developed and potentially be a substantial increase in gas supply in the medium term," Shell said, echoing Ecopetrol's earlier statement.
Shell Colombia president Ana Maria Duque described the agreement as a "significant step in Shell's aspirations in Colombia and in South America" that builds on its collaboration with Ecopetrol.
The value of the transaction, which is subject to regulatory approvals, was not disclosed.
For Colombia, the deal is a significant step toward replenishing its gas reserves, which have been supplemented in recent years with LNG imports through a terminal near Cartagena.
The Shell farm-in could also prod Brazil's state-controlled Petrobras to take over the operator role and develop its Tayrona offshore license where gas was discovered at the Orca-1 well in December 2014.
Nationwide, Colombia's proven gas reserves are pegged at 3.78 Tcf (107bn m³), equivalent to 9.8 years of supply at current consumption levels. At the end of 2017, gas reserves totaled 3.89 Tcf, or 11.7 years of supply.
