Colombia Upstream Fiscal and Regulatory Report - Flexibility on Contract Requirements Signals Ambition to Attract Investment


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Colombia Upstream Fiscal and Regulatory Report - Flexibility on Contract Requirements Signals Ambition to Attract Investment

Summary

Colombia Upstream Fiscal and Regulatory Report - Flexibility on Contract Requirements Signals Ambition to Attract Investment, presents the essential information relating to the terms which govern investment into Colombias upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the states take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Colombias upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Colombia
- Assessment of the current fiscal regimes state take and attractiveness to investors
- Charts illustrating the regime structure, and legal and institutional frameworks
- Detail on legal framework and governing bodies administering the industry
- Levels of upfront payments and taxation applicable to oil and gas production
- Information on application of fiscal and regulatory terms to specific licenses
- Outlook on future of fiscal and regulatory terms in Colombia

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Colombias upstream oil and gas sector
- Evaluate factors determining profit levels in the industry
- Identify potential regulatory issues facing investors in the countrys upstream sector
- Utilize considered insight on future trends to inform decision-making
1 Table of Contents
1 Table of Contents 1
1.1 List of Tables 2
1.2 List of Figures 2
2 Regime Overview 3
3 State Take Assessment 5
4 Key Fiscal Terms 6
4.1 Subsoil Use Fees 6
4.2 Technology Transfer Contribution 6
4.3 Royalties 7
4.4 High Price Participation 7
4.5 Production Participation 9
4.6 Additional Production Participation 10
4.7 Community Benefit Program Contribution 11
4.8 Direct Taxation 11
4.8.1 Corporate Income Tax 11
4.8.2 FTZ Reduction 11
4.8.3 CREE 12
4.8.4 CREE Surtax 12
4.8.5 Deductions and Depreciation 12
4.9 State Participation (under Association Contracts) 12
5 Regulation and Licensing 15
5.1 Legal Framework 15
5.1.1 Governing Law 15
5.1.2 Contract Type 15
5.1.3 Title to Hydrocarbons 15
5.2 Institutional Framework 16
5.2.1 Licensing Authority 16
5.2.2 Regulatory Agency 16
5.2.3 National Oil Company 16
5.3 Licensing Process 17
5.3.1 Licensing Rounds 17
5.3.2 Prequalification 17
5.3.3 Bidding 19
5.4 License Terms 20
5.4.1 Duration 20
5.4.2 Work Obligations 20
5.4.3 Relinquishment 22
6 Outlook 23
7 Contact Information 24

1.1 List of Tables
Table 1: Summary 3
Table 2: Colombia, Conventional Deposits, Subsoil Use Fees (US$/ha), Exploration Phase, 2016 6
Table 3: Colombia, Unconventional Deposits, Subsoil Use Fees (US$/ha), Exploration Phase, 2016 6
Table 4: Colombia, Standard Sliding Scale Royalty Rates (Light Crude) 7
Table 5: Colombia, Discounts to Light Crude Royalty Rate 7
Table 6: Threshold Benchmark Prices, Liquids, High-Price Participation, 2016 8
Table 7: Colombia, Threshold Benchmark Prices, Gas, High-Price Participation, 2016 8
Table 8: Colombia, High Price Participation Percentages Allocated to ANH, 2016 8
Table 9: Colombia, Production Participation Rates (%), 2014 Round 10
Table 10: Colombia, Corporate Income Tax Rate, Foreign Entities, 2015-2018 11
Table 11: Corporate Income Tax Rate, All Entities, 1995-2012 11
Table 12: Colombia, CREE Surtax, 2015-2018 12
Table 13: Colombia, Participation Split - 2nd Generation (1990-1994) 13
Table 14: Colombia, Participation Split - 3rd Generation (1994-1999) 13
Table 15: Colombia, Participation Split - 4th Generation (2000-2003) 14
Table 16: Colombia, Bid Round Qualification Criteria, 2014 Round 18
Table 17: Colombia, Indebtedness Range Calculation, Financial Economic Capacity Score, 2014 Round 19
Table 18: Colombia, Debt Service Coverage Range Calculation, Financial Economic Capacity Score, 2014 Round 19
Table 19: Colombia, Evaluation Criteria, 2014 Round 20
Table 20: Colombia, Minimum Exploration Work Program Requirements, Bid Round 2014 21
Table 21: Colombia Exploration Phase Financial Guarantee Reduction, Exploration Phases Three Years or Greater, 2015 22
Table 22: Colombia Exploration Phase Financial Guarantee Reduction, Exploration phases Less Than Three Years, 2015 22

1.2 List of Figures
Figure 1: Regime Flow Chart 4
Figure 2: Colombia, Indicative NPV10/boe, IRR and State Take Comparison - Internal, 2016 5
Figure 3: Colombia, Indicative NPV10/boe, IRR and State Take Comparison - Resource Peer Group, 2016 5
Figure 4: Colombia, Legal Framework 15
Figure 5: Colombia, Institutional Framework 16