Colombia to award four onshore oil blocks to Canadian firms

Colombia’s National Hydrocarbons Agency (ANH) is set to sign contracts for four onshore oil blocks with two Canadian firms.

According to a Reuters report, the agency had decided to award the four blocks to Canacol Energy-subsidiary CNE Oil & Gas and the local unit of Parex Resources as no competing bids were submitted.

This comes after 16 companies were initially qualified to place bids.

ANH will sign agreements with CNE Oil & Gas for blocks VIM 44 and VMM 47 and with Parex Resources for blocks LLA 134 and VIM 43, the news agency added citing the agency’s press office and a statement.

The contracts, which have a combined value of around $40m, will be signed on or after 30 November.

The oil and gas industry is now struggling to recover from the impact of Covid-19 pandemic that weakened demand and prices.

As of 19 November, Colombia has reported more than 1.2 million confirmed coronavirus cases and around 34,563 deaths due to the disease.

Last month, Colombia announced that it anticipates a significant drop in oil production over the next decade.

During a presentation to congressional economic committees about royalties, Colombian finance vice minister Juan Alberto Londono said that the production will fall from the current levels of 787,000 barrels per day (bpd) to 654,000 bpd in 2030.

However, the impact of reduced production will be lesser due to better prices, the presentation added.

The South American nation currently seeks to increase its oil reserves by focusing on exploration and improving recovery at existing fields.