"Hocol made an offer for the field last year but it did not satisfy the expectations in terms of offering a higher production tariff than Ecopetrol," local paper Portafolio quoted ANH director Armando Zamora as saying. Ecopetrol's new E&P contract will provide an additional 12% in royalties to the country than it currently receives from Hocol, which will translate into 5bn pesos (US$2.21mn) a year, according to the paper.
However, Hocol will continue producing in the Tello field in association with Ecopetrol, while maintaining E&P activities elsewhere in Huila department, the statement said. Ecopetrol will face the challenge of maintaining production levels while increasing investment in the field, the statement reported.
The state company has operated in Huila department since 1994 in the Dina and Neiva 540 fields. Ecopetrol planned to invest 159bn pesos in Huila department in 2005, a 92% increase with respect to 2004, according to a previous BNamericas report.
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