Shell was a successful bidder, jointly with the Colombian national oil company Ecopetrol, for a deep water offshore block at the “Colombia Ronda 2014” held on July 23rd (Shell 65%, Ecopetrol 35%). This was seen as an opportunity for Shell to add attractive new deep water acreage – with the SIN OFF 7 block – to its portfolio in Colombia. It should also provide Shell with strong technical and operational synergies between the new block and existing ones it operates: Guajira-3 (GUA-3) and Colombia-3 (COL-3). Shell will be operator of SIN OFF 7.
Two days after the bid round, Mark Shuster, EVP UA Exploration, participated in a panel at the VI Colombia Oil & Gas Investment Conference in the coastal city of Cartagena. During this event, he praised Colombia for recent regulatory changes.
“Colombia must be acknowledged for the improvements it has made to enhance deepwater fiscal terms,” Mark said. “The adjustments to the windfall profits tax and the increase of the exploration phase from 6 to 9 years are necessary first steps toward attracting investment in Colombia’s deepwater.”
Mark added: “Like other international energy companies, Shell carefully considers exploration and development areas based on a global portfolio. Fiscal terms and overall economics critically underpin decisions and countries that leverage fiscal terms are often most successful in attracting investments.”
Shell is considered the first ultra-deep water player in Colombia, acquiring the lease for GUA-3 in 2010 and for COL-3 in 2012. Activities in these blocks have included 2-D and 3-D marine seismic acquisition and include an upcoming environmental baseline survey, airborne operations and piston coring. When Shell has collected and studied this data, it will decide on the path forward with respect to exploration activity.
As a deep water pioneer and global leader, Shell has more than 30 years of record-breaking expertise with a strong presence in both established and emerging deep water provinces around the world. The world’s deepest drilling and production platform, deepest subsea well, deepest spar, and deepest subsea pipeline connection, are just some of the records in deep water developments Shell has achieved.
Shell has been in Colombia since 1936 and currently produces and commercializes lubricants there. In addition to its deep water blocks, Shell is also evaluating three onshore blocks in the Middle Magdalena Valley, with majority and operating interests (VMM-3, VMM-27 and VMM-28). Shell also holds interest in CPE-4, located in the onshore Llanos basin in eastern Colombia, which is operated by Ecopetrol.