On Feb. 11, Colombia’s state oil company Ecopetrol signed a joint venture with Royal Dutch Shell granting the company 50-percent working interest in the Fuerte Sur, Purple Angel and Colombia-5 blocks located in the Southern Colombian Caribbean.
The blocks include the Kronos well, first drilled in 2015, as well as the Gorgon and Purple Angel wells in 2017.
Upon approval from Colombia’s Agency of National Hydrocarbons, Shell will become the operator, and the companies will move forward with operations. They plan to drill an appraisal well, including a production test, by late 2021.
Shell is not the only company taking note of Colombia’s offshore potential.
Noble Energy entered the country in 2018 and obtained its first acreage position with a 40-percent operational stake in the COL-3 and GUA OFF-3 blocks in March 2019. Shell is the company’s co-venturer with a 60-percent working interest. By June, Noble plans to open an operational center in Barranquilla, a port city on the Colombian Caribbean coast.
Ian Gordon, Colombia country manager for Noble, said the country has a lot to offer to companies seeking offshore opportunities.
“In a balanced, global portfolio, Colombia has positives that should be considered. Geologic potential, a business orientation and a history of honoring agreements all speak well for Colombia,” he said.
Gordon has worked in offshore exploration for 23 years, with 12 of those years as an exploration geophysicist. During his four years working offshore Colombia, he has seen promise in the basins.
“The deepwater of the Colombian Caribbean is an open frontier with great hydrocarbon potential in large prospects. We are looking for a sweet spot that has mature source, quality reservoir and good seal,” he said.
“My interpretation is that the mid-Tertiary, mixed oil and gas source system seen onshore in the Lower Magdalena Valley should extend offshore. Structural configurations for traps are evident. Other geoscientists, both inside and outside of Noble Energy, have different interpretations, while still recognizing great potential,” said Gordon.
Jorge Calvache, vice president of exploration at Ecopetrol, said offshore Colombian basins are underexplored and contain potential for both oil and gas accumulations of variable sizes.
“Exploration opportunities range from gas-charged slope reservoirs in structural traps related to the fold belt, to light oil trapped in basin-floor reservoirs, and carbonates deposits in basement highs that have potential for both oil and gas,” he said.
Calvache has more than 20 years’ experience evaluating offshore opportunities in Nigeria, Equatorial Guinea, Gulf of Mexico, Gabon, Australia, Venezuela, Mexico, Colombia, Oman, Iran, the Philippines and other countries.
He has spent 10 years evaluating opportunities in offshore Colombia, first as a seismic interpreter and later leading Ecopetrol’s offshore exploration efforts. He said Colombia has a lot to offer companies seeking opportunities.
“The Colombian Southern Caribbean is a tested emerging gas province, while data from the northern basins suggest both oil and gas potential,” he said. “This diversity of tested and untested plays with interesting potential, together with the political, legal and fiscal stability and the favorable contractual terms make offshore Colombia a very exciting place to be.”
A History of Exploration
Colombia’s offshore story started in 1973 with the discovery of the Chuchupa-Ballena fields in the northern region of La Guajira. The field, operated by Chevron, is the country’s only offshore project currently in operation.
There was no new offshore activity until 2012 when Colombia’s ANH issued six blocks in 2012 and five more blocks in 2014. Improved contractual and fiscal conditions encouraged operators Shell, Repsol, Anadarko, Statoil and ExxonMobil to enter the country.
Colombia drew international attention in 2014 when Petrobras and Ecopetrol found gas in the Orca structure of the Tayrona block in Northeast part of the country.
Soon afterward, Ecopetrol and partners set their sights on the Southern Colombian Caribbean. Anadarko Petroleum Corporation, in partnership with Ecopetrol, drilled Kronos-1 in the Fuerte Sur Block in 2015 and Purple Angel-1 and Gorgon-1 in the Purple Angle block in 2017.
Anadarko exited the country in 2018, and security concerns in Colombia and in neighboring Venezuela caused activity to slow.
The industry began to reactivate in the second half of 2018 when the pro-business Duque administration took office and restructured agencies like the ANH.
In 2019, the ANH passed reforms to exploration and production contracts and issued new blocks, bringing Noble and other new players to Colombia.
In mid-2019 Ecopetrol started searching for a world-class strategic partner to operate the Fuerte Sur, Purple Angel and COL-5 blocks that Anadarko ceded upon leaving the country.
The search ended in the farm-out agreement signed with Shell, whom Calvache deems an ideal partner for Ecopetrol.
“Shell brings a huge offshore experience and expertise that will help Ecopetrol to mature the gas discoveries and strengthen the existing exploration portfolio. This agreement is very important because it reactivates the exploratory activity in the blocks, moving towards a possible development phase in the future depending on the results of the appraisal well, increasing and diversifying Colombia’s gas supply,” he said.
Creating a Friendly Business Environment
Flover Rodriguez, executive director of the Colombian Association of Petroleum Geologists and Geophysicists, said measures taken by Colombia’s national, regional and local governments are helping to attract foreign operators to the country.
“The (ANH) has been strengthening its capabilities to be ready to take on the development challenge of the Colombian offshore with the arrival of important players,” he said. “Additionally, our coastal cities, particularly Barranquilla, have been developing a free trade infrastructure to meet the needs of service companies and operators. The development of offshore projects provides a new business line for Barranquilla because the goods and services needed for offshore development will pass through its port. This will expand the spectrum of investment that Barranquilla already supports.”
Gordon said choosing Barranquilla as an operational center for Noble made perfect sense.
“Barranquilla and Santa Marta (a neighboring city 100 kilometers away) are near the blocks that Noble Energy operates, and both have potential shore bases with experience handling exploration operations,” he said.
Rodriguez said that Colombia offers an additional element key to ensuring successful offshore operations, a prepared workforce.
“I am convinced that my Colombian colleagues have the technical, scientific and academic capacity to meet with excellence the challenges that offshore exploration and development projects bring,” he said.
“Many of our geoscientists have had the opportunity to study in prestigious and important universities around the world, and local companies participating in offshore projects have been training their staff with the highest levels of knowledge and technical expertise in hydrocarbon exploration,” he added.
Rodriguez said he senses a sector-wide commitment to capacity building.
“The exploration and development sectors have assumed the challenge with great responsibility, preparing technically, scientifically, financially and operationally in order to take on the challenge of exploring, drilling and developing our hydrocarbon resources offshore,” he said.
Unleashing Colombia’s Potential
Calvache said that while the Colombian offshore shows promise, there is plenty of work needed to move into the development phase.
“The Colombian offshore Caribbean basins are still in a frontier-to-emergent exploration stage, where there are still uncertainties regarding the petroleum systems. Biogenic gas has been discovered and encouraging results have been obtained from gravity piston coring campaigns where thermogenic hydrocarbons have been identified in samples,” he said.
“Although large structures have been identified, several areas without adequate seismic coverage still remain. In the ultra-deepwater environments, for example, promising light oil plays have been identified, yet the seismic coverage is sparse, and no wells have been drilled. We need to confirm this potential in order to advance to development and production stages in the future,” Calvache added.
Calvache described some of Ecopetrol’s strategies for expanding exploration activity.
“Ecopetrol has advanced play-based regional studies integrating detailed subsurface seismic mapping, well, piston core, outcrop data, and basin modeling, which have enabled the identification of new plays and helped de-risk the existing petroleum systems models. These have been integrated to Ecopetrol’s exploration strategy and will lead to further exploration activity,” he said.
Ecopetrol company recently acquired 2,000 square-kilometers of high-quality 3-D seismic data in the Colombia-5 block in order to increase its exploration portfolio in the southern Caribbean.
The company also is keeping an eye on the Tayrona block in the Northern Caribbean, where Petrobras has a 44-percent operator stake.
Calvache cited Petrobras’ subsurface and feasibility studies being conducted to mature the 2014 Orca discovery and understand the path to development and production stage.
The companies plan to drill an additional well, Uchuva, in the Tayrona block in 2020 or 2021.
“With drilling of the Uchuva well we hope to test a new thermogenic offshore play,” Calvache said.
Noble Energy plans to drill the Cumbia prospect on block COL-3 in the third quarter of 2020 in a water depth of approximately 8,500 feet. Cumbia is one of several prospects on this block. Noble Energy estimates total resource potential from the prospects on both the COL-3 and GUA OFF-3 blocks to total in excess of 2 billion barrels of oil equivalent.
Gordon is cautiously optimistic.
“I expect lots of mixed oil and gas accumulations. What we don’t know without drilling results is whether they will be commercial, and that may depend on deliverability of the reservoirs,” he said.
Seeking Commercial Discoveries
Rodriguez said that commerciality is a key topic of discussion as companies move into the development phase.
“Recent discoveries in deep waters are mainly from dry gas, which is showing great potential for gas prone plays,” he said.
“Current scenarios project that Colombia will face a natural gas deficit (in) 2024-25. That means that we have a native market for at least part of the potential production from discoveries, but we need to develop these projects quickly in order to address the deficit in the next five years,” he continued.
Rodriguez noted that additional markets are being evaluated in Central America and the Caribbean region.
Calvache said that Ecopetrol is working to cover the demand with gas from offshore fields.
“If the potential of the offshore discoveries is confirmed, in the mid-term, fuel demand could be covered with local resources. Also, if the light-oil potential is confirmed, the offshore basins would become even more relevant for the economic development of Colombia,” he said.
Learning and Collaborating in Barranquilla
Operators working in Colombia and academics studying its basins will evaluate the country’s offshore potential at GTW Colombia: “Exploration and Development in Southern Caribbean Basins,” a geosciences technology workshop organized by AAPG and ACGGP at the Hotel Dann Carlton in Barranquilla.
Originally scheduled for March 24-25, 2020, the event has been postponed due to global health concerns and travel restrictions related to the COVID-19 outbreak.
The first-ever AAPG workshop held in the city will feature two days of presentations and roundtable discussions focused on prospectivity, recent discoveries, new plays, enhanced imaging, AVO/DHI, seismic acquisition, risk reduction and drilling optimization.
In addition to the technical program, the event features participation from ANH and local government officials who will discuss government and industry strategies to develop Colombia’s offshore sector.
Rodriguez expects the event to be beneficial both to those currently working in Colombia and those who are interested in learning more about the area.
“The GTW is an excellent scenario for operators, service companies and regulatory entities to share their expectations and needs regarding the development of projects in the Colombian offshore,” he said.
“I am sure that the exchange of exploratory ideas, cutting-edge technologies used and the expertise of great players in the offshore will be the elements that distinguish this event from others,” Rodriquez added.
Gordon joined the GTW Colombia organizing committee as a service both to his company and his host country.
“Encouraging exploration in the Colombian Caribbean benefits both Colombia and Noble,” he said, adding that he looks forward to interacting with colleagues and learning more about the basins.
“Everything that we can learn that leads to improved economics for exploration is helpful,” he said. “In a frontier region like the Colombia Caribbean, that can include better understanding of the geophysical responses, distributions of petroleum systems or drilling conditions, as examples.”
Gordon thinks that Barranquilla is the ideal location for the workshop.
“Barranquilla is a lively city, benefitting from civic cooperation and visibly improving public infrastructure. Workshop visitors will be impressed,” he said.
AAPG and ACGGP, in consultation with partners and stakeholders, will continue to monitor the status of the outbreak and announce the workshop dates as they are confirmed.
For more information about GTW Colombia, visit aapg.to/gtwcolombia2020