9 of October of 2020
Terms of reference for Pilot Projects of Unconventional Fields

By means of Resolution 0821 dated September 24, 2020, the National Authority of Environmental Licenses (“ANLA”) issued the Terms of Reference for the drafting of environmental Impact Studies (“EIA”) of the Pilot Projects of Integral Investigation (“PPII” by its acronym in Spanish) for Unconventional Fields (hereinafter “YNC”), using the Hydraulic Fracturing and Multi-Stage Technique with Horizontal Drilling (“FH-PH”) (“TdR – 029”).

The results of the studies carried out within the framework of the PPII are expected to generate relevant information to evaluate the EH-PH technique in Colombia, and to determine if the conditions to proceed with the commercial exploration and exploitation in the areas with hydrocarbon potential in unconventional fields are met. It will also serve to take improvement measures, if any, in terms of institutional, technical, environmental, regulatory, and social matters

On February 28, 2020, the Ministry of Mines and Energy (“MME”) published Decree 328 “By means of are set the guidelines to carry out the exploration activities in Integral Research Pilot Projects (PPII) on unconventional hydrocarbon deposits with the use of a multi-stage horizontal drilling hydraulic fracturing technique .” Thereafter, in compliance with Decree 328 of 2020, on July 7, 2020, the MME issued Resolution 40185, which established the technical guidelines for the development of PPII projects (the "Resolution").

Bearing in mind the technical regulation existing on this matter, issued by the MME, the TdR – 029 issued by ANLA maintain a very similar structure and content to the terms of reference that exist today for hydrocarbons exploration and exploitation drilling projects, except for some particular matters that specifically apply to the PPII of YNC, using FH – PH.

The TdR – 029: (i) reiterate the conditions that were previously defined for the drafting and filing of the EIA, contained in the General Methodology for the Drafting and Filing of Environmental Studies, issued by the Ministry of Environment and Sustainable Development (“MADS”), by means of Resolution 1402 of 2018 and the “Model for Geographic Storage”, regulated by Resolution 2182 of2016; and (ii) include specific relevant matters that are described below. 

One of the specific relevant matters is related to the data collection and accurate cartographic representation. Regarding said matter, MADS reiterates the use of Datum Magnas Sirgas and clarifies that the information must be captured in national origin, as established in Resolution 471 of 2020, issued by the National Geographic Institute (“Instituto Geográfico Agustín Codazzi”) (“IGAC).

Another relevant matter of the TdR – 029 is contained in Chapter 5. This Chapter 5 specifically presents the guidelines for the “Participation of Authorities, Communities and Groups of Interest”. On that regard, MADS indicates that any methodology can be conducted, but it outlines the social guidelines established by the Ministry of Internal Affairs and MME, by means of Resolution 904 dated 2020. 

As established in Chapter 5 of the TdR -029 regarding the application of the participation guidelines, the following two (2) purposes must be guaranteed: (i) deliver to the authorities, communities and groups of interest the sufficient, clear and on due time information; and (ii) promote the discussion, argumentation and debate of the involved stakeholders, as well as to identify and register the environmental impacts that arise. 

In respect to the characterization of the Area of Influence, referred to the abiotic environment, the TdR - 029 goes further on requesting information on the geo-spheric, hydrologic, hydrogeologic and atmospheric components. The TdR – 029 include the characterization of “Natural Sources of Ionizing Radiation”. In relation to the biotic environment, the TdR- 029 adopt new elements to analyze the information on land ecosystems, conducting the analysis from the perspective of “sound landscapes” and “microorganisms”, incorporating additional requirements for flora. Regarding the socio-economic environment, the main change included in the TdR – 029 is that the participation guidelines are included in a separate chapter and not as one of the aspects in which the general analysis is distributed. 

Additionally, the TdR - 029 establish the treatment and final disposition of return fluids and production water by forced evaporation, as an atmospheric emissions permit. In reference to permits, the TdR - 029 establish the protection of aquifers and ecosystems related to the activities of FH-PH and reinjection during the development of the PPII.

Furthermore, the TdR – 029: (i) establish in the Environmental Management Plan, a list of specific management sheets; (ii) require the submission of Environmental Compliance Reports every two months, as per established in Decree 328 of 2020; (iii) include within the annexes suggested methodologic references to characterize the baseline of the abiotic and biotic environments, with emphasis on the hydrological analysis and monitoring of surface waters and fauna characterization.

Having said the above, it is important to mention that the issuance of the TdR -029 gives the technical and environmental support that is required for the development of the PPII of YNC, implementing FH-PH in Colombia. 

Said Pilot Projects must comply with these requirements to draft and submit their EIA and obtain the corresponding environmental licenses to initiate and develop their activities. As briefly described above, the TdR – 029 have not include technical requirements that are superior or additional to the ones established for current drilling exploration and exploitation projects in general, except for the ones previously described. 

Finally, bear in mind that on September 14, 2020, 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 Unconventional Oilfields - FHPH ("CEPI Bidding Process"), which is intended to award Special Agreements for Investigations Projects ("CEPI") that will aim to develop the PPIIs.

For further information on the CEPI Bidding Process, please refer to 

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