Colombia formally launched its oil block auction for 2012, the latest effort by the country to attract foreign investment into its booming oil industry.
Orlando Cabrales, the head of the government’s National Oil Agency, on Tuesday officially kicked off the round in which 109 oil blocks are being offered. The sale of the packages with the technical information for the blocks starts Wednesday and the government will carry out a road show between March and April to attract investors.
Cabrales said that due to environmental concerns the government reduced the amount of blocks being offered from the initial 113 that were planned. The auction is expected to be completed by the end of this year.
The auction will include offshore blocks in Colombia’s Caribbean coast as well as in the Pacific, which remain largely unexplored according to Cabrales.
The oil auction for 2012 follows a similar process in 2010 in which 76 areas were allocated by the National Oil Agency. Some of the companies that successfully participated in the 2010 auction included Royal Dutch Shell PLC (RDSA), France’s Etablissements Maurel & Prom SA (MAU.FR) and Canada-listed Gran Tierra Energy Inc. (GTE, GTE.T).
Colombia currently ranks as the fourth largest oil producer in Latin America. Foreign investment is pouring into the country as the government has gained control of remote areas that were once controlled by leftist insurgents.
Colombia produced an average 941,000 barrels of oil per day in January, up 12% from the same month in 2011. Colombian officials recently said they remain confident oil output will reach the psychologically important one-million-barrels-a-day mark within the first few months of 2012.