On September 14, 2020 and after the publication of Agreement No. 6 of 2020 (the "Agreement"), the National Hydrocarbons Agency ordered the opening of the Bidding Process for the development of Research Projects on the use of the Multi-Stage Hydraulic Fracturing technique with Horizontal Drilling in Non-Conventional Oilfields - FHPH ("CEPI Bidding Process").
The CEPI Bidding Process is intended to award Special Agreements for Investigations Projects ("CEPI") that will aim to develop the Pilot Projects of Integral Investigation ("PPII"). Interested parties must comply with the award parameters set forth in the Terms of Reference of this process.
The results of the studies carried out within the framework of the PPII are expected to generate relevant information to evaluate the Fracking technique in Colombia, and to determine if the conditions to proceed with the commercial exploration and exploitation in the areas with hydrocarbon potential in non-conventional fields are met. It will also serve to take improvement measures, if any, in terms of institutional, technical, environmental, regulatory and social matters
Bear in mind the following information regarding the CEPI Bidding Process:
1. In which areas of the country is the CEPI Bidding Process framed?
As the CEPI is the contractual vehicle for the development of the PPII, must be framed in the Resolution No. 40185 of 2020, which established that PPII will be carried out in the basins of the Middle Magdalena Valley and César Ranchería.
The areas destined for the award of CEPI must be classified in the Land Map as available areas or assigned areas. That is, the areas in which the Research Projects in development of PPII may be carried out correspond to the portion of land identified and delimited by the interested party and authorized for such purpose by the ANH.
2. How many CEPI can be awarded?
The CEPI Bidding Process is limited to the award of a maximum of four (4) CEPI, in which area drilling, completion and hydraulic fracturing activities may be carried out by drilling up to two (2) wells in the area of each contract, cleaning and sizing of the deposit for research purposes.
3. How does the CEPI Bidding Process work?
The CEPI Bidding Process will be developed in phases, as follows: (i) Disclosure and Information; (ii) Qualification of the interested parties and deposit of proposals; (iii) Evaluation and qualification of proposals; (iv) Selection of the research projects most favorable to the interests of Colombia; and (v) Award and celebration of the corresponding CEPI.
4. How to participate in the CEPI Bidding Process?
The national and foreign legal entities that prove to meet the capacity requirements set forth in the Terms of Reference may participate in the CEPI Selection Process and submit individual or joint proposals, under the figure of consortium, for which they must request and obtain qualification from the ANH.
Then, qualified interested parties must submit a bid through a written communication addressed to the ANH, including the corresponding information for each of the proposed projects, considering that the ANH will authorize the execution of up to two (2) Research Projects for each interested party, with a maximum of two (2) wells for each project.
5. Is there any preemptive right for the award of a CEPI?
Yes, if the operator of an E&P contract for conventional fields is located in the Middle Magdalena Valley or Cesar Rancheria sedimentary basins and if it obtains qualification to participate in the CEPI Bidding Process, it has the prerogative of preferential award of CEPI with respect to the other participants interested in developing Research Projects. Consequently, if a valid bid is submitted in relation to that area, this operator’s bid will be preferred over any other proposal submitted by qualified third parties.
6. What is the current phase of the CEPI Bidding Process?
This process is currently in the phase of observations and suggestions to the terms of reference. Observations and suggestions should be sent to the ANH between 15/09/2020 and 18/09/2020, by e-mail to email@example.com.
Furthermore, please note that the publication of the Land Map with the areas of the Research Projects offered, to be submitted to the Coordination and Concurrence Procedure Nation - Territory will be given on 04/11/2020.
Likewise, the stage of presentation of documents for qualification will take place from 05/10/2020 to 09/10/2020
Please click on this link to review the details of the CEPI Bidding Process: [View more]