for hydrocarbons Contents 1 Colombia 2 Institutional Framework

for hydrocarbons

Contents 1. Colombia 2. Institutional Framework 3. Industry background 4. Open Round Colombia 2010 5. Conclusions 2

Contents 1. Colombia 2. Institutional Framework 3. Industry background 4. Open Round Colombia 2010 5. Conclusions 3

Colombia in South America: 4 ü Oldest democracy ü 2 nd population : 45 million ü 3 rd crude producer: 759, 000 b/d ü 3 rd economy : GDP: US$395 billion (2008) ü 3 rd recipient of FDI in oil & gas : : US$10. 6 billion (2008) US$ 3. 4 billion (2008) ü 4 th Land surface area: 1. 2 million Km 2

FDI flows in South America 50 000 45 058 40 000 Million USD 35 000 30 000 25 000 20 000 16 787 15 000 10 564 10 000 8 853 4 808 5 000 1 716 0 Brazil Source: 5 UNCTAD Chile 2006 2007 Colombia 2008 Argentina Peru Venezuela

FDI by economic activity (2008) 8% 32% 10% Oil Mining Manufacture Financial Trade and Hotels Transport and Communications Others 10% 16% Source: 6 Banco de la República 5% 18%

Investment in hydrocarbons Historic FDI in oil & gas *E = estimated Source: Banco de la República 7

Contents 1. Colombia 2. Institutional Framework 3. Industry background 4. Open Round Colombia 2010 5. Conclusions 8

Institutional framework - since 2003 Ministry of Mines and Energy Policy-making and control Administration and promotion of the hydrocarbons resources Explores, produces, refines, transports and markets 9

Strategic framework Mission The ANH is the agency responsible for promoting the optimal and sustainable exploitation of the country’s hydrocarbons resources; through an integrated administration approach, seeking a balance between the interests of the State, Colombian society and industry Vision The ANH shall be recognized globally as a model government institution by: • its knowledge of the Colombian geological potential and the optimization of its exploitation; • its efficient and transparent administration of the hydrocarbon resource and coordinated work with both industry and community; and • its professional staff, its high technological level and the agility of its process 10

Contents 1. Colombia 2. Institutional Framework 3. Industry background 4. Open Round Colombia 2010 5. Conclusions 11

Oil in South America Proved reserves (Billion barrels) Thousand b/d 3 000 Venezuela Production 2, 5 Colombia *E (2%) 99, 4 2 566 Ecuador 3, 8 1 899 2 000 Brazil 1 000 759 (*) 12, 6 630 514 0 Venezuela Brazil Colombia Argentina Ecuador (12%) 2, 6 Argentina Growing (*) Production as of February 2010 12 Sources: BP Statistical Review 2009; ANH Analysis Falling *E = reserves estimated

Gas in South America Proved reserves (Tera cubic Trinidad & Tobago feet) 17, 0 Billion cf/d Production Venezuela 170, 9 Colombia *E 5 4 3 (2%) 4, 3 4, 1 3, 8 Bolivia 3, 0 2 1, 3 Brazil Bolivia 1, 1 (*) 1 11, 7 0 Argentina Trinidad & Venezuela Tobago Colombia (7%) Growing (*) Production as of January 2010 13 Sources: BP Statistical Review 2009; ANH Analysis Falling Argentina 15, 5 *E = reserves estimated Brazil

Increase Oil & Gas proven reserves Oil Gas *E *E * E = estimated 14

Growing oil & gas production Average annual production Oil Average monthly production (last 12 months) Gas Oil Gas 1138 759 15 2009 2010

Exploration activity has increased considerably Million (Ha) 100 Open Round 80 TEA E&P Production 60 40 2003 2004 2005 2006 2007 2008 2009 2010 16

Licensing activity continues to increase and seismic data acquisition activity is high … (80) (230) 17 * TEA: Technical Evaluation Agreement

… the highest number of exploratory wells and high success rates … Plan: 107 56% 78% 18

Contents 1. Colombia 2. Institutional Framework 3. Industry background 4. Open Round Colombia 2010 5. Conclusions 19

Location of areas Area (Ha) Number of Blocks 6. 055. 158 141 8. 459. 046 31 33. 253. 683 56 Total 47. 767. 887 228 Number of Wells Seismic (Km) Type 1 E&P Miniround 269 33. 174 Type 2 E&P New prospective basins 147 24. 041 Type 3 Special TEAS* 50 11. 225 Total 465 67. 882 Historic activity *TEA: Technical Evaluation Agreement 20

Key Milestones 21 Preliminary terms of reference 15 th October, 2009 Final terms of reference 16 th February, 2010 Pre qualification documents 16 th February - 30 th April, 2010 Pre qualification list 21 st May, 2010 Bidding 22 nd June, 2010

Contents 1. Colombia 2. Institutional Framework 3. Industry background 4. Open Round Colombia 2010 5. Conclusions 22

Colombia offers good business opportunities • A prolific geology • A good business environment • An appropriate institutional framework • A competitive and fair contract • Competitive rounds • Stability remains in the sector 23

Book in your agendas Cartagena, 22 - 25 June , 2010 IV Colombia Oil and Gas Investment Conference 24

Thank you! www. anh. gov. co 25