Page 7 - LatAmOil Week 49 2019

LatAmOil COLOMBIA LatAmOil
 The ANH said that only one counter-offer had been received. Parex made a bid for the Llanos 124 block, which had attracted the attention of other companies in previous bidding, it explained.
The ANH had previously reported that the auction drew bids for 15 blocks out of a total of 59 on offer, significantly below the level of inter- est it had originally expected. A total of 10 com- panies made 17 bids – less than half the number of firms that had pre-qualified for bidding.
The 15 blocks are expected to bring in at least US$500mn in investment, according to the ANH. However, the total sum involved could rise, depending on the value of the new counter-offer.
The December 5 auctions made up the sec- ond licensing round to be held in the Latin American nation this year, following one in June in which six companies were awarded a total of 11 contracts. Frontera Energy and Ecopetrol were also among the winners in that auction, which the ANH also said would result in around $500mn in investment.
The Colombian government is trying to
ECUADOR
Ecuador awards oil supply contract to Shell
boost its slow-moving oil sector by offering potential investors modified contractual terms and less bureaucracy. It is doing so in a bid to compensate for a slump in exploration in recent years owing to the oil price crash.
So far this year, foreign majors ExxonMobil, Repsol and Royal Dutch Shell have all signed deals to operate new blocks in Colombia.™
Colombia included 59 sites in its most recent licensing round (Image: ANH)
ECUADOR’S national oil company (NOC) Petroecuador has awarded a unit of the Anglo- Dutch oil super-major Royal Dutch Shell a contract to lift some 20.2mn barrels of Ori- ente-grade crude.
The state-run firm said that the contract would remain valid between 2020 and 2023. It also said it expected the deal to generate around US$950mn.
Shell Western Supply and Trading offered to pay a premium of $0.71 per barrel above the West Texas Intermediate (WTI) crude reference price, beating its two competitors Trafigura and Mitsubishi.
Under the contract, Ecuador will deliver Shell a total of four shipments of 360,000 barrels each of Oriente-grade crude in 2020 and 2021. Following that, it will deliver 24 shipments of the same amount per year in 2022 and 2023.
Petroecuador said that Shell had proposed the highest premium in the auction, which was the first of its kind to take place in Ecuador for more than a decade. The Latin American coun- try invited more than fifty companies to take part in the auction.
The price of the oil is expected to be calcu- lated by a formula based on the price of Ecua- dor’s oil sales on the spot market plus a premium.
The South American country is the smallest member of the Organization of the Petroleum Exporting Countries (OPEC). It has the conti- nent’s third-largest oil reserves after Venezuela and Brazil, and currently produces around 500,000 barrels per day (bpd) of oil. State-run
Petroamazonas produces approximately one third of the total.
Petroecuador exports an average of 180,000 bpd of crude, of which around 120,000 barrels are Oriente oil, the highest quality crude pro- duced in the country.
Ecuador’s government depends heavily on oil revenues, as crude is the country’s biggest export. But in recent years low oil prices have left the government with lower revenue and more debts owed to Chinese creditors. Since 2014, the country has had very little oil left over for new sales agreements, because most of its exports were tied up in oil-backed loan agreements with Asian companies such as state-owned China National Petroleum Corp. (CNPC). ™
Shell will lift 20.3mn barrels of crude oil from Ecuador (Photo: Petroecuador)
Week 49 12•December•2019 w w w . N E W S B A S E . c o m P7