Colombia’s state oil company, Ecopetrol SA, said in a statement Monday it is assuming Royal Dutch Shell PLC’s 50% stake in the Cano Sur oil block, bringing Ecopetrol’s stake in the block to 100%.
Work in the oil block is still in the exploratory phase, but Ecopetrol said in the statement that “results obtained from evidence recorded in the stratigraphic wells Draco-1 and Mago-1 have confirmed the presence of hydrocarbons.”
The terms of the agreement between Shell and Ecopetrol weren’t announced.
“This block could be very valuable having in mind that it is very close to very prolific heavy oil fields like Rubiales and Quifa,” said Juan David Pineros, oil and energy analyst at Colombian brokerage InterBolsa.
The Cano Sur block is located in the Llanos Orientales basin in the central state of Meta.
Ecopetrol is Colombia’s largest integrated oil and gas company, accounting for 60% of the country’s total production. It is one of the top 40 oil companies in the world and the fourth largest oil company in Latin America.