BHP Billiton announced that it has acquired exploration and production rights offshore Colombia, South America. The company signed contracts with the national hydrocarbon agency of Colombia, Agencia Nacional de Hidrocarburos (ANH) on April 7, 2006, which allow for oil and gas exploration and production from two offshore blocks in Colombia’s Caribbean sector. BHP Billiton holds a 75% interest in each block and is the designated operator. Colombia’s state-owned oil company, Ecopetrol, holds the remaining 25% interest. The two contracts, Fuerte Norte and Fuerte Sur, each cover approximately 1.2 million acres and are located in water depths ranging from 50 to 2,700 metres. Financial terms of the transaction were not disclosed.
“We are pleased to expand our portfolio into the southwestern Caribbean sector,” said Steve Bell, President of Exploration & Business Development for BHP Billiton Petroleum. “Our interest in this acreage not only matches our company’s core competencies in deepwater exploration globally but also the knowledge and experience we’ve gained in the Caribbean region through operations in Trinidad and Tobago.”
This transaction follows on from a Technical Evaluation Agreement (TEA) previously agreed with the ANH in 2005, which allowed BHP Billiton to study and assess approximately 3.75 million acres offshore Colombia for exploration and development opportunities. BHP Billiton has had a long-standing relationship with the resources industry in Colombia, producing energy coal from the Cerrejon mine and nickel from Cerro Matoso S.A.
“Our conversion of our Technical Evaluation Agreement into an exploration license within 12-months reflects our unique ability to leverage our diversified portfolio of existing businesses to create opportunities across the group, as well as the success of ANH in promoting oil and gas investments in Colombia,” Mr. Bell said.