LONDON (ShareCast) - Latin American energy group Andes Energia has been awarded an additional block in the Colombia Round 2012 bidding process through its subsidiary Andes Energia Argentina S.A, in a consortium with Integra Oil & Gas (IOG).
This brings the total number of blocks awarded to eight.
Nicolas Mallo Huergo, Chairman of Andes, commented: "We are very pleased with the award of an additional block and the formal completion of the agreements and we look forward to developing the full potential of these blocks. Our entrance in Colombia is one step in our asset diversification strategy, as we seek to acquire assets in highly competitive and profitable markets.
"With Colombia being one of the largest crude oil producers in South America, the development potential of these blocks will help us achieve our goal of becoming one of the top Latin-American players," he added.
Colombia is the third largest crude oil producer in South America. The new block, Llanos 3, is located in the Llanos basin in Colombia. It is surrounded by fields that are currently in production and the Andes Energia board reported that it believes the block has a high potential for conventional and unconventional resources.
The board further announced that the contracts for all eight exploration blocks have now been executed and completed.
Andes and IOG have entered into an agreement under which IOG will fund the exploration programs covering four of the eight blocks awarded.
IOG is a French private registered company with operating activities in Venezuela and holds a 26.39% interest in Lagopetrol S.A. IOG is a company connected with a major shareholder of Andes.
Andes has also entered into a consortium agreement with IOG and Trayectoria Oil & Gas, to pursue the possible acquisition of producing blocks being offered in a bidding process by Ecopetrol (NYSE: EC - news) , Colombia's national oil company.
Andes Energia holds a 30% interest in this consortium.