Interview: Javier Betancourt
The ANH hopes to raise $2.6bn with the 2014 oil round. How confident are you that this will happen?
JAVIER BETANCOURT: Investment in the sector is obviously welcome, but that is just a means to achieve the ANH’s goal, which is to increase reserves. The round has already proved extremely efficient in drawing investment and interest in exploration. The 2014 round offers possibilities for everyone, including blocks with prospects not only in conventional oil but also in shale and offshore, and in both deep and ultra-deep water.
Likewise, we will auction undeveloped discoveries to companies of limited capacity that wish to explore deposits which, at the time of discovery, could not be exploited or were considered unprofitable. The round also includes opportunities to develop projects in coalbed methane (CBM), which according to recent studies has great potential in Colombia. In fact, our reports show that Colombia could have up to 40 tera-cubic feet of CBM. If that is true, Colombia would have the largest deposits of that kind in Latin America.
A key element in this round is the higher quality of the information we are giving. In response to comments about a lack of information in previous rounds, we are offering more complete information, as well as recommendations to investors and data with interpretation. Information is crucial to the industry and allows us to include basins not previously considered and to recalculate the depths of the foundations, something that can change a project’s structure. Besides this, the ANH will talk with interested companies on an individual basis to understand their needs and help them directly. We will have a virtual data room that will allow investors anywhere in the world to follow specific information about the round and the blocks offered in it.
To what extent do you expect offshore to replace declining onshore production?
BETANCOURT: We cannot realistically expect a change in the source of production from onshore to offshore in the short or medium term. In fact, onshore production continues to increase year-on-year. Our priority is to maintain exploration at a level that will increase onshore reserves. Recognising that the global trend is toward offshore discoveries, however, we do plan to encourage offshore investment in the medium term.
At 23,509 sq km, the size of offshore blocks allotted to investors in 2012 far exceeded the 4484 km on shore. The 2014 round will contain some interesting blocks for offshore and shale oil and gas development. There is no doubt about that.
When will regulations cover shale oil and gas?
BETANCOURT: The country has already released a template for contractual agreements in shale oil and gas, and though those rules are perpetually being improved, I believe we are well covered. We still need to work on technical and environmental regulations. To help with this, we have brought in the best experts in the field to build a solid and reliable standard for investors.
What are you doing to increase the state’s presence to ensure the sector develops efficiently?
BETANCOURT: The ANH has done an exceptional job selling our country’s potential in hydrocarbons exploration, although it’s true our support of operating companies can still be improved. It is part of our mission to make investors’ lives easier so they can achieve their objectives. This includes direct assistance in their relations with local communities and close collaboration for obtaining environmental licences. The ANH must serve as a guide to investors, since the success of the companies we bring into the country is essential to the successful development of the hydrocarbons sector and consequently of the country. We are working closely with other government authorities, including the National Environmental Licences Agency and the Ministry of Interior. While offering our help is essential, we need companies to demonstrate a real commitment to their projects, especially regarding their social and environmental impacts, which we understand is not at all easy.
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