libertad y orden the colombian hydrocarbons sector armando zamora director general national...
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Libertad y Orden
The Colombian hydrocarbons sector
Armando Zamora Director General
National Hydrocarbons Agency
Colombia Oil & Gas Investment Conference
Cartagena, 20 May 2005
Libertad y Orden
Libertad y OrdenIt all started 100 years ago…
1905 – De Mares and Barco concessions
1918 – First discoveries: La Cira and Infantas (Tropical Oil Co.)
1951 – Reversion of De Mares Concession – Ecopetrol is
established
1953 – Petroleum code
1974 – Crude imports
Chuchupa – Ballena discovery (TPC)
Association contract
Agencia Nacional de Hidrocarburos
Libertad y Orden
0
10
20
30
40
50
60
The 80s witnessed the highest activity
1993 19971995 20011979 1981 19851983 1987 1989197719751973
1990 1992 19961994 1998 2000 20021980 19841982 1986 19881978197619741972
A-3 Wells
Source: ACP, DOE
1999
WTI Oil price (US$/bl)
1991
Cusiana
Opening of new areas worldwide
Association ContractInternational Prices
Sliding-scale
participation War taxes and
remittances
R Factor VariableRoyalties
Caño Limón
Crude imports
70%/30%Participation
Agencia Nacional de Hidrocarburos
Libertad y Orden
The new royalty scheme (2002) is competitive
% of production (per field)
10%
0 5 125 400
20%
0 5 125 600400
Royalties
Production level (000boe / day)
Discount in relation to light crudes
Gas - 20%
Heavy Crude - 25%
Offshore Gas (>1000 ft) - 40%
8%
25%
Agencia Nacional de Hidrocarburos
Libertad y OrdenActive areas are located in a few basins
Agencia Nacional de Hidrocarburos
Technical evaluation
E&P
ANH CONTRACTS
---DTLEA-
Exploration
Production
ECOPETROL CONTRACTS
DTALE-A
DETALE-A
CHUCHUPA - BALLENA
LA CIRA INFANTAS
CUSIANA CUPIAGUA
CAÑO LIMON
Libertad y Orden
The new contractual scheme is attractive
E&P Contract
• Taxes + Royalties
• Flexible Periods
• Automatic extension possible
• Materiality + autonomy
Award process
• First come, first served
• Prompt and transparent
• Pre-set negotiation periods
Agencia Nacional de Hidrocarburos
Libertad y Orden
40%
50%
60%
70%
80%
90%
100%
0 5 10 15 20 25 30 35 40 45 50Prospectivity Index
Sta
te T
ake –
Econ
om
ic F
ield
s P
EP
S
BrazilArgentina
Peru
Bolivia
United Kingdom
India
Australia
Venezuela
China
Indonesia
Angola
Kazakhstan
Pakistan
Turkmenistan
Colombia (2003)
Source: PEPS-USGS
Not verycompetitive
Verycompetitive
Gabon
Norway
Object
ive
Competitiveness map
Colombia (now)
Libertad y Orden
Contracts signed since June 2004 with:* Libertad y Orden
•Alpha Consultores Ltda•Argosy Energy International
•BHP Billiton •C&C Energy S.A.•Cel•Consorcio Petrotesting -
Colregistros•Drummond Ltd•Ecopetrol•Emerald
•Erazo Valencia y Cia•ExxonMobil•Geoproduction Oil&Gas Co. •Harken de Col.•Hocol S.A.•Hupecol LLC
•Kappa Resources Ltd.•Mecantile Colombia O&G
•Monsa•Occidental Andina LLC•Petrobras•Petrocolombia•Repsol Exploración Colombia S.A.
•Petrocol•R3 Exploración y Producción•Solana Petroleum Exploration Colombia
Ltd.
•Stratus Oil & Gas•Tecnopetrol•PEI•Winchester Oil&Gas •Petrominerales Colombia Ltd. Sucursal
Colombia* New entrants in bold
Libertad y Orden
0
5
10
15
20
25
30
35
1999 2000 2001 2002 2003 2004 2005(p)*
Number of E&P Contracts
Ecopetrol ANH-signed
39 approved(27 signed)
ANH-for signature
ANH
Goal
* Planned
31 32
28
14
4
21
21
7
11
25
30
Agencia Nacional de Hidrocarburos
Libertad y OrdenExploration activity is increasing
0
5
10
15
20
25
30
35
40
45
2000 2001 2002 2003 2004 2005 (P)*0
2000
4000
6000
8000
10000
12000
14000 2D-equivalent Kms of seismic
Number of A-3 wells
* PlannedAgencia Nacional de Hidrocarburos
Libertad y OrdenAn unexplored country…
Total sedimentary area: 1 million km2
20%: off-shore basins80%: on-shore basins
Non-sedimentaryareas
87%available
Only 13% of total sedimentaryarea has been licensed:
5% by ANH
8% by Ecopetrol
Agencia Nacional de Hidrocarburos
Libertad y Orden
2
4
6
8
10
12
106bls
Self-sufficiency optimistic IHSANH
Source: IHS, ANH analysis
New discoveries scenarios (to 2020)
Geological potential (to 2020)
Potential
?
Agencia Nacional de Hidrocarburos
Libertad y Orden
Sources: UPME, Ecopetrol, IHS
000barrels/day
Current fields
Self-sufficiency
ANH
IHS optimistic
Production profiles contingent to potential scenarios
Geologic potentialscenarios:
400
800
1.200
1.600
2.000
2005 2015
Demand projectionsDomestic refining needs
2010 2020
Agencia Nacional de Hidrocarburos
Libertad y Orden
Contracts A3 Wells Discoveries (20mmbl)
Required activity according to scenarios of reserves to be discovered up to 2020
20 30
75
Self-sufficiency ANH Optimistic IHS
40
5-6
60
10
150
60
Agencia Nacional de Hidrocarburos
Libertad y Orden
Promotion NegotiationContract
Management
Identification of
opportunities
Investorsupport
Promotion
An aggressive campaign of new information acquisition is at the core of the ANH’s strategy
1. New information
2. Identification of
opportunities
3. Promote them to investors
ANH´s investments in acquisition of new geological information:
- ~ US$70million in 2005
- ~ US$800million to 2020
Agencia Nacional de Hidrocarburos
Libertad y Orden
Investment campaign 2005: seismic
CAYOS 2DCAYOS 2D
PACIFICOPACIFICOOFFSHORE - OFFSHORE - ONSHOREONSHORE
VMMVMM
SINUSINUSAN JACINTOSAN JACINTO
LLANOSLLANOS
Agencia Nacional de Hidrocarburos
Libertad y Orden
Agencia Nacional de Hidrocarburos
SINU- SAN SINU- SAN JACINTOJACINTO
SEQUENCE SEQUENCE STRATIGRAPHYSTRATIGRAPHY
VMMVMMHEAVY OILHEAVY OIL
EASTERN EASTERN CORDILLERACORDILLERA
SOAPAGA SOAPAGA CARTOGRAPHYCARTOGRAPHY
LLANOSLLANOSHEAVY OILHEAVY OIL
LLANOS LLANOS FOOTHILLSFOOTHILLS
CARTOGRAPHYCARTOGRAPHY
Investment campaign: general studies
Agencia Nacional de Hidrocarburos
Libertad y OrdenThe State will be ‘priming the pump’
Plan 2020: to discover > 4Bn boe
• ANH and Ecopetrol to invest ~$15Bn in exploration and development (to 2020)
• ANH alone to invest around ~$800m in frontier areas (to 2020)
• Activity objective: ~ 30 new E&P contracts / year
ANH flag projects: • Heavy oil • Tayrona• Pacific basin• Sinu-San Jacinto• Tello field
Libertad y Orden
Agencia Nacional de Hidrocarburos
Thank you!
www.anh.gov.co
Libertad y OrdenANH heavy oil project –Llanos Basin
Bidding Round Preparation: Early 2006Planned Bidding Round: Mid 2006
Objective: To prepare a bidding round in heavy oil prone areas in the Llanos basin
Background:• Heavy Oil is an abundant non-
conventional oil resource• Shallow reservoir: ~ 3,000 ft• The existence of a Heavy Oil
“Belt” is inferred through the presence of three currently producing fields along a very large triangle in the area: Castilla, Rubiales and El Miedo
• Estimated OIP ~ 400mbl
Preliminary studies to be carried out by the ANH – 2005
• Calibration & Reprocessing of ~ 10,000 kms of seismic information
• Identification of potential plays