On June 14, 2018, the ANH published a new model Hydrocarbons Exploration and Production Contract to be used in offshore areas (the "Contract") after its approval by the ANH and by the Ministry of Mines and Energy.
The birth of the new model Contract is based on the new regulatory framework established in ANH’s Agreement 02 of 2017, and seeks to make the country more competitive, as well as to stimulate, retain, encourage and attract large companies to Colombia’s offshore upstream oil sector. In our view, the new model Contract incorporated welcome changes to the prior model, some of which resulted from the Colombian Government’s effort to socialize its terms with the oil & gas industry.
The new model Contract will apply to those operators who carry out activities under technical evaluation agreements (“TEAs”) and have the right to convert said contracts into hydrocarbon exploration and production (“E&P”) contracts. Likewise, the new model Contract will apply to companies that are selected in future competitive processes organized by the ANH to award offshore areas.
Below we will describe some of the main changes incorporated in the new model Contract. In doing our analysis we compared it with the latest version of the hydrocarbons exploration and production contract used by the ANH for offshore areas it awarded in the context of the "Ronda Colombia 2014" competitive process.