On April 8, 2021, the National Hydrocarbons Agency ("ANH") submitted the qualification requirements for the fourth cycle of the Permanent Process for the Allocation of Areas, called Colombia Round 2021 ("Colombia Round")."

Among the qualification requirements presented by the ANH are the following: 

•    The capacities to be accredited by the operators are: (i) legal capacity; (ii) economic-financial capacity; (iii) technical and operational capacity; (iv) environmental capacity; and (v) corporate social responsibility capacity.

•    If the interested party is qualified under the plural participant modality, that is to say, that the proponent is composed of one or more investors and an operator (“Plural Participants”). Said investors must prove: (i) legal capacity; and (ii) economic and financial capacity.

•    Plural Participants must participate in the Colombian Round under Consortiums, Temporary Unions, or Partnership Promises.

•    The legal capacity includes the obligation to: (i) in the case of the operator, to have five years of existence with a corporate purpose related to exploration and production activities (“E&P”; and (ii) in the case of investors, to have one year of existence with corporate purpose related to E&P complementary activities.
•    Branches of foreign companies duly incorporated in the country must prove their qualification capacities through their parent or controlling company.

•    The requirements regarding the economic-financial capacity of the companies interested in participating in the Colombia Round will be measured by points where: (i) the indebtedness range will manage a score of 25%; (ii) the residual net worth of 50%; and (iii) the coverage range the remaining 25%.

•    Companies listed in the latest publication of (i) "The Energy Intelligence Top 100: Global NOC & IOC Rankings" of the Energy Intelligence Group Inc.” ("TOP 100"); or (ii) "Upstream" and/or the latest publication of "The Platts Top 250 Global Energy Company Rankings" of "S&P Global Platts" in the categories: "Oil & Gas Exploration and Production" or "Integrated Oil & Gas" ("TOP 250"), will be exempted from the evaluation of the economic-financial capacity. 

•    Likewise, the companies that prove to the ANH that in the last year they obtained a risk rating equivalent to the investment grade of their long-term debt, on an international scale, equal or higher than those established in the following table, will be exempted from the evaluation of the economic-financial capacity:

•    Regarding the technical and operational capacity, companies interested in participating in the Colombia Round in continental areas with prospects for trapped or conventional reservoirs will have to demonstrate reserves of 2,000,000 BEP and an average operated production of 1,000 BEP/d. Those interested in offshore areas with prospects for trapped or conventional reservoirs will have to show reserves of 50,000,000 BEP and an average operated production of 20,000 BEP/d.

•    Interested companies in the TOP 100 or TOP 250 will be exempted from the evaluation of their technical and operational capacity.

•    This exemption will also apply to (i) interested companies that report investments of US$500 million in conventional reservoirs and US$250 million in unconventional reservoirs; and (ii) interested companies that (a) own assets worth more than US$1,000 million; and (b) operate five E&P contracts in conventional reservoirs, or three E&P contracts in unconventional reservoirs.