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Colombia Minister: Peace Deal Would Open Huge Areas to Oil Exploration

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LONDON - The Colombian Deputy Energy Minister said Friday that a hoped-for peace deal with Marxist rebels would open up huge swathes of land for oil exploration that have been long closed off due to security concerns, a move that could help this South American nation beef up its dwindling energy reserves.

"Today Colombia has had activity only in 25% of its sedimentary basins, so 75% remains to be explored and of course inability to get to those areas is mainly due to security issues," Colombian Deputy Energy Minister Orlando Cabrales Segovia told Dow Jones Newswires in an interview on the sidelines of an investment conference in London.

Areas such as the Caguan-Putumayo basin in the south of the country bordering Ecuador, where there has been a significant guerilla presence in recent years, is one such area where there is "significant potential" for oil exploration and production, he said.

Luis Alfredo Baena, the executive vice president for business development at Canada-listed Canacol Energy Ltd., said a settlement would allow the company to ramp up output at the Capella field in the Caguan-Putumayo basin, where it has a 10% stake, to 30,000-40,000 barrels a day within two years.

Security issues have prevented output at the field, which China's Sinochem International Corp. operates, from rising above 2,000 barrels a day, he said.

Dan Molinski contributed to this story.

Copyright (c) 2012 Dow Jones & Company, Inc.

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