Two oil companies operating in Colombia will expand their exploration contracts to non-traditional oil deposits, the government said on Thursday, as the South American country looked to increase its reserves.
New regulations allow companies that signed traditional exploration contracts before 2012 to include exploitation of non-traditional sources of oil, like fracking.
U.S.-based ConocoPhillips (ticker: COP) and CNE Oil and Gas, a subsidiary of Canada’s Canacol Energy, have both signed non-traditional exploration agreements with the national hydrocarbons agency following the change, the agency said in a statement.
Exploration will take place in the VMM-3 block, in the northeastern provinces of Cesar and Santander, and will require at least $85 million in investment.
“This is very good news for the industry and for the country to receive this request to add a contract for development of non-traditional reserves,” agency president Mauricio de la Mora said. “It’s a bet on the increase of reserves, so necessary for the country.”
Colombia’s national income has been battered by a slump in prices for crude, its largest export and source of foreign exchange.
The country has 2.3 billion barrels of reserves, roughly equal to 6.4 years of consumption.