For several years, it was announced in the international financial market that the LIBOR rate would cease to be used as an international reference for operations conducted in U.S. dollars starting from June 30, 2023. In January 2023, the Central Bank of Colombia stopped publishing the statistical series of the LIBOR rate as part of the elimination process, which concluded for all LIBOR rate modalities on June 30th, 2023.

Considering the aforementioned, the National Hydrocarbons Agency (hereinafter the “ANH”) published for comments a draft agreement by which it announces that the delay interest rate for obligations nominated in U.S. Dollars in the hydrocarbons exploration and production contracts executed by the ANH (hereinafter referred to as "E&P Contracts") will be calculated using the reference rate SOFR instead of the LIBOR. The SOFR is an interest rate published by the New York Federal Reserve that is calculated considering actual market transactions for securities issued by the United States Treasury.

According to the draft agreement, the default interest rate to be stipulated in the E&P Contracts will be 3 months SOFR plus a spread equivalent to 4%.

Finally, the ANH has determined that the modification of the default interest rate in the E&P Contracts shall be formalized through the execution of an addendum to the E&P Contracts.

You can find the text of the draft agreement at the following link: Draft agreement LIBOR for SOFR