In 2003, the restructuring of Colombia’s hydrocarbons sector was consolidated with the creation of the National Hydrocarbons Agency (ANH) in response to the critical situation caused by declining oil reserves, which threatened to turn the country into a crude oil importer . See Decree 1760 of 2003.
This restructuring aimed to enhance Ecopetrol’s competitiveness by eliminating its dual role as both a regulatory entity and an oil company. As a result, Ecopetrol was restructured to focus exclusively on exploration, production, transportation, refining, and commercialization of hydrocarbons, ensuring that it would operate solely as an oil company across all phases of the value chain, competing on equal terms with other sector players.
As part of these reforms, the ANH assumed Ecopetrol’s role as administrator and regulator of the nation’s hydrocarbon resources, marking a pivotal transformation that once again positioned Colombia as an attractive destination for both domestic and foreign investment. However, Ecopetrol retained all areas under direct operation as well as the association contracts signed before December 31st, 2003.
Another fundamental change was the introduction of a new contract model governing royalties, taxes, and fees, replacing the previous association contract framework. This new model establishes three distinct phases—exploration, evaluation, and production—aligned with international industry standards, ensuring government participation ranging between 50% and 60%.
The economic terms of this contractual model have made Colombia one of the most attractive investment destinations worldwide, balancing government participation with strong profitability for investors. The allocation of exploration and production areas follows modern, transparent, and efficient procedures, ensuring compliance with high international standards through rigorous administration and oversight mechanisms.
Furthermore, this model accommodates projects of all scales, from large multinational corporations to small and medium-sized enterprises (SMEs), opening up diverse investment opportunities. The Technical Evaluation Agreement (TEA) was also introduced, allowing for the allocation of large areas for surface studies to assess hydrocarbon potential. These contracts, which can last up to 18 months, provide the contractor with the first right to sign an exploration and production agreement for the evaluated area.
Throughout 2003, the ANH’s strategic focus was on restoring the sector’s competitiveness, reintegrating Colombia into the global oil industry, increasing the prospectivity index, and attracting private investment.
As a direct result of these efforts, a significant number of contracts have been signed since the adoption of the new contractual framework in June 2004. Moreover, this model has attracted major international companies such as BHP Billiton and ExxonMobil, which had previously halted exploration in Colombia for over a decade.
Exploration activity has significantly increased following the sharp decline observed until 2000. Since the creation of the ANH, there has been substantial growth in the explored area, the number of exploration and production (E&P) contracts signed, the 2D seismic kilometers acquired, and the number of wells drilled. Additionally, major investments have been allocated to acquiring geological data, identifying opportunities in mature fields and frontier areas.
Currently, Colombia offers an attractive regulatory framework, economic and political stability (among the best in Latin America), a fully operational Agency, high investor confidence, and great geological potential. As of December 31, 2023, considering the existing contracts, the proven, probable, and possible (3P) reserves amount to 3,863 MMBOE (million barrels of oil equivalent). Likewise, contingent resources (3C) stand at 4,099 MMBOE, and prospective resources (P50) are estimated at 6,817 MMBOE. Regarding undiscovered potential, it is estimated to be approximately between 9,000 and 140,000 MBPE (million barrels of oil equivalent).