Colombia To Seek Oil Off San Andres Island With Jamaican Company

BOGOTA, April 25, 2008(Dow Jones Newswires)

The Colombian oil-licensing agency, known as ANH for its Spanish acronym, will team up with Jamaica's state-owned oil company to search for oil off San Andres island in the Caribbean, ANH Director Armando Zamora said Friday.

Zamora said both companies will carry out studies in the area between San Andres - which belongs to Colombia and is located off Nicaragua - and Jamaica.

Both countries will collect data and will then try to attract a private investor to develop oil-exploration activities in the area, he said.

Colombia has emerged as an increasingly attractive option in the region for investors as neighboring producers like Venezuela, Ecuador and Bolivia have rewritten contracts to impose tighter terms on foreign oil companies. In contrast, Colombia enjoys a reputation for strong contractual stability and favorable terms, including royalties as low as 8%.

This year, Colombia plans to auction a total of 151 blocks. In the current round for 48 blocks, it has received interest from Chevron Corp. (CVX), Royal Dutch Shell PLC (RDSA), ExxonMobil Corp. (XOM) and Russia's Lukoil Holdings (LUKOY), as well as companies from Japan, Korea and Argentina, according to Zamora.

Separately, Zamora also said companies in Colombia will probably produce an average of between 550,000 and 560,000 barrels a day in 2008, more than the 540,000 barrels a day forecast by the Mines and Energy Ministry.

BOGOTA, April 25, 2008(Dow Jones Newswires)