A particular highlight of this year’s excellent London First Energy event were a set of ambitious TSX-listed companies looking to have a major impact on the face of Colombian oil exploration.

For those that haven’t been following it closely, Colombia has seen dramatically improved security in recent years after more than 40 years of armed conflict, thanks mainly to the efforts of former President Alvaro Uribe. This has improved the investment climate (the sovereign S&P rating is BB+) and, in addition, there has been a strong push to stimulate foreign investment in the country's energy sector. A new petroleum fiscal regime was implemented in 2004, enshrining the Agencia Nacional de Hidrocarbon (“ANH”) as the regulatory authority and introducing significantly reduced royalties. As a result, the former SOE Ecopetrol became publicly-held in 2004 and required to compete directly with foreign and domestic companies in exploration bid rounds.

Following these changes, the oil sector received $2.95 billion in foreign investment in 2009 — up from just $1.7 million in 2003. This year, foreign investment is anticipated to increase another 19% to $3.5 billion. Over the next six years, the government expects almost $40 billion to be invested in Colombia's energy sector, so there’s a lot of interesting development and activity afoot. [1]

Petrominerales

First up for the Tuesday morning session was Petrominerales, a sizable C$2.5 billion market cap Latin America-based exploration and production company, in which Petrobank Energy and Resources (TSX:PBG) has a majority stake. Canadian-listed (TSE:PMG), the company has 2.1 million exploration acres in Colombia (100% interest) and 9.4 million acres (5.2 million net) in Peru. The business has seen four consecutive years of over 100% production growth, now amounting to production of over 44,000 bopd in Q2 2010.

In Colombia, Petrominerales is producing oil with 17 exploration blocks in the Llanos and Putumayo Basins. Situated in East-Central Colombia, the Llanos Basin is one of the country’s most prospective areas and Petrominerales' current exploration focus is on the Deep and Central Llanos. At the heart of its operations is the Corcel Block, where it has drilled 13 wells, 12 of which were successful. The Guatiquia Block (contiguous with the southwest portion of the Corcel Block) is the site of the successful Candelilla-1 and Candelilla-2 wells. Candelilla-1 was drilled and put on production late in 2009. Candelilla-2 and 3 were drilled in early…

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