Forty companies interested in Ecopetrol tender

Colombia's state oil company Ecopetrol has received expressions of interest from about 40 small and medium-sized companies for a tender to boost production on 13 small and medium-sized oil fields, Ecopetrol advisor Jimmy Guerrero told BNamericas. Four or five foreign firms, including Chinese and US companies, are interested, Guerrero said. Ecopetrol was scheduled to receive bids on October 31, but delayed the date until November 14 because companies requested more time after Ecopetrol asked them to provide a financial guarantee. Contracts will be awarded the same day through an electronic bidding process, the first time Ecopetrol has used such a system, Guerrero said. Ecopetrol is asking for normal 20% royalties, plus a minimum 5% of incremental production. The winning bidder on each block will be the company that offers the highest percentage over 5%, Guerrero said. Although Colombia aims to increase oil production to avoid having to import hydrocarbons in the future, this tender is more focused on boosting investment and "democratizing" the oil industry by attracting smaller players, Guerrero said. "We are talking about small volumes of production that will not impact the country's total production, but in the future they will become part of our new strategy of flexible business development," Guerrero said, adding that if the tender is successful, Ecopetrol could call for bids on other fields later on. Ten-year contracts will take effect January 1, with a one-year evaluation period after which the company can decide to pull out if the block is not considered commercially viable. There is no minimum investment requirement. Companies can also withdraw before the 10-year period ends if the field's reserves are exhausted, Guerrero added. The fields on offer are Barranca-Lebrija, Pavas, La Rompida, Nancy-Burdine-Maxine Carbonera, Rio de Oro, Puerto Barco, Camoa, Chenche, El Dificil, and Hato Nuevo.