In the framework of the III Oil and Gas Summit in Colombia, the National Hydrocarbons Agency ("ANH") presented the details of the fourth round of the Permanent Bidding Process ("PPAA") and its action plan towards 2040 (the "2040 Plan").
During the summit mentioned above, it was explained that Plan 2040 will be led by the Ministry of Mines and Energy in coordination with the Ministries of Interior, Transport, Labor and Environment, and that will be based on four pillars: (i) investment in geological knowledge; (ii) technological transformation; (iii) strategic alliances and release; and (iv) redistribution of areas on the land map.
The 2040 Plan is aimed at identifying resources by nearly 6 billion barrels with an investment target of US$1.2 billion over 20 years to ensure medium- and long-term domestic demand. It is worth noting that the 2040 Plan contemplates, among others, a restructuring of ANH and the possibility of creating a Superintendence of Hydrocarbons, seeking not only to strengthen the role of ANH as the country's hydrocarbons administrator but also the work and coordination with the Colombian Geological Service, and the Ministry of Science and Technology for the of promoting the country's hydrocarbons potential function.
Likewise, the 2040 Plan establishes the following three sources of operation to increase the oil and gas reserves:
1. Accelerate the development of new cycles of the PPAA.
2. To increase the work of improved recovery in mature fields with the potential to extract crude.
3. Develop unconventional deposits through 'fracking,' which is currently in the phase for the development of Integral Research Pilot Projects.
Moreover, concerning the fourth cycle of the PPAA, the ANH announced that 10 Technical Exploration Agreements (TEAs) and 20 Exploration and Production Agreements (E&P) would be offered in the following eight (8) basins: (i) Urabá; (ii) Colombia; (iii) Chocó; (iv) Sinú San Jacinto; (v) Lower Magdalena Valley; (vi) Middle Magdalena Valley; (vii) Upper Magdalena Valley; and (viii) eastern Llanos.
Offshore operations will be focused in the Urabá and Colombia basins. In contrast, onshore operations will be focused in the Sinú San Jacinto, Chocó, Lower Magdalena Valley, Middle Magdalena Valley, Upper Magdalena Valley, and Eastern Llanos basins.
It is worth mentioning that the ANH aims to have the round carried out in approximately six months; however, the date has yet to be defined.