Multinational oil company Shell (NYSE: RDS-B) expects the exploration program for its new heavy crude blocks in Colombia to last at least two years, Shell E&P Americas VP of new business development Olivier Lazare told BNamericas.
Colombian hydrocarbons regulator ANH in July awarded a consortium formed by Shell and Colombian state oil company Ecopetrol the CPE-2 and CPE-4 heavy crude blocks. Contracts were signed in September.
"Shell and our partner Ecopetrol signed two new contracts, on Tuesday, September 23, with ANH," Lazare said. "We are very pleased that we were the winners for, what was in our estimation, the two most promising blocks in the bid round."
Shell now holds a 50% stake in the two heavy crude blocks in addition to the Caño Sur block which it acquired in late 2006. The company's total landholdings in Colombia now reach 24,000km2.
The exploration program to be carried out over the new heavy crude blocks, meanwhile, will include new 2D and 3D seismic surveys.
"In the long term, Shell plans to continue to grow in Colombia as we are confident that we can work with our partner Ecopetrol on our current acreage and with ANH on terms and conditions for upcoming bid rounds and possible production contacts," Lazare said.
"Through this partnership with Colombia, we ultimately hope to make a material find that will allow us to make a substantial investment in the country," he added.
Ecopetrol and Shell offered to invest US$63.6mn and contribute 1% of production on top of royalties for the CPE-2 block. The consortium won the CPE-4 well with an offer of US$79.4mn and 1% of production, ANH said in July.
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