CNOOC cleared to bid for Colombian acreage

China's state-owned CNOOC is among at least four additional foreign oil companies that are newly pre-qualified to participate in Colombia's latest upstream licensing round that kicks off this month.

China is already a significant buyer of Colombian crude, with Asia-bound volumes swelling in recent years, partly in response to a decline in supply from neighboring Venezuela.

The newest authorized bidders for the second stage of Colombia's permanent round also include Norway's Interoil, Argentina's PetroSud and US independent Vetra, bringing the total list to 26. A European firm and another South American company are interested in pre-qualifying as well, a senior official with Colombia's hydrocarbons regulator ANH said today on the sidelines of the Colombian oil chamber's annual summit.

The bidding roster already features US independents Occidental, Hunt and Noble Energy; India's ONGC; Spain's Cepsa; Canadian independents Gran Tierra Energy, Parex and Frontera; and Colombia's state-controlled Ecopetrol, among others.

Offers are due on 26 November, followed by potential counter-offers on 5 December and final bids on 12 December.

Up for grabs are 59 blocks, including five in the frontier deepwater Caribbean where Noble Energy and partner Shell plan to drill the ultra-deepwater Cumbia well on the COL-3 block around mid-2020, pending a regulatory permit, according to ANH officials. The well is expected to cost more than $100mn.

Colombia is counting on offshore Caribbean acreage and future unconventional projects to boost crude and natural gas reserves.

The non-Opec country produced 879,497 b/d of crude in September, up by a meager 1.2pc year on year, while gas production jumped by 18.6pc to a year-to-date high of 1.141 Bcf/d (32mn m³/d), reflecting higher demand.

Nationwide, proven crude reserves increased by 9.9pc to 1.96bn bl in 2018 from 1.78bn bl at the end of 2017, extending the life of the reserves to 6.2 years from a previous 5.7.

In contrast, proven gas reserves slid by 2.9pc to 3.78 Tcf, equivalent to 9.8 years. At the end of 2017, gas reserves totaled 3.89 Tcf, or 11.7 years of supply.

ANH president Luis Morelli told reporters today that Colombia has the potential to boost reserves by 9bn bl of oil equivalent from future unconventional drilling.

Colombia has seen a rise in upstream interest by companies that are looking away from Mexico and Argentina because of changing investment conditions there, Morelli said.

By Patricia Garip