Ecopetrol Takes Control of Hocol's Tello Field in Colombia

Colombia's national hydrocarbons regulator ANH has awarded an exploration and production contract for the Tello field in Huila department to state oil company Ecopetrol after Colombian oil company Hocol's contract expired, ANH said in a statement. Production on the field, which is currently in decline, is about 10,000 barrels a day and has been operated by Hocol for 30 years.

"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.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.