libertad y orden the colombian hydrocarbons sector armando zamora director general national...

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


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%


Libertad y OrdenActive areas are located in a few basins


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


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


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


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

?


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


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


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


Libertad y Orden

Investment campaign 2005: seismic

CAYOS 2DCAYOS 2D

PACIFICOPACIFICOOFFSHORE - OFFSHORE - ONSHOREONSHORE

VMMVMM

SINUSINUSAN JACINTOSAN JACINTO

LLANOSLLANOS


Libertad y Orden


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


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


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

libertad y orden the colombian hydrocarbons sector armando zamora director general national...

Documents

libertad y orden slide

hidrocarburos slide

libertad y orden sources

libertad y orden active

ecopetrol agencia nacional

basins agencia nacional

participation agencia

planned agencia nacional