Colombia's government on March 11 said it signed two exploration and production contracts with Royal Dutch Shell Plc in offshore areas of the Caribbean Sea that will require the company to make initial investments of $100 million.
Colombia recently modified contractual terms for offshore exploration and launched a Permanent Area Allocation Process so companies can apply to explore in areas of interest, offering 20 blocks as part of a strategy to boost the oil sector.
"The signing of these contracts revalidates the confidence of oil investors in exploration of our offshore resources in the Caribbean," National Hydrocarbons Agency (ANH) President Luis Miguel Morelli said in a statement.
The investment could surpass $650 million if exploration continues, he said.
Shell will explore blocks COL 3 and GUA OFF 3, which cover about 880,000 hectares.
Its investment adds to almost $400 million recently announced by Brazil's Petrobras in Colombia's Tayrona block and state oil company Ecopetrol in block COL-5.
Colombia has proven reserves of 1.78 billion barrels of oil, equivalent to 5.7 years of consumption, according to the Ministry of Mines and Energy.
The government wants to boost its hydrocarbon reserves to guarantee its self-sufficiency.
Cairn Oil & Gas will drill about 300 development/injection wells and construct 205 well pads to increase production from the Barmer fields.
Drillers cut nine oil rigs in the week to March 22, bringing the total count down to 824, the lowest since April 2018, Baker Hughes, a GE company (NYSE: BHGE), said in its weekly report.
The independent U.S. energy producer aims to take a final investment decision on the $20 billion project in the coming months, having signed up long-term buyers for its LNG.