VMM-3 Frequently Asked Questions
Where is VMM-3 located?
The VMM-3 block is in the Middle Magdalena Valley, and extends over an area of more than 33,000 hectacres. The area includes parts of the Cesar and Santander departments, as shown in the map below.
Where is the Picoplata #1 well located?
The Picoplata #1 well is in the Pita Limón community in the municipality of San Martin (Cesar Department).
When did ConocoPhillips Colombia become the operator of VMM-3?
We signed an Additional Contract and were named as operator of the VMM-3 block by the National Hydrocarbon Agency (ANH) on Dec. 2, 2015. We hold an 80-percent interest in the block and Canacol Energy is the remaining interest owner.
What are the terms of the contract?
There are nine years of exploratory activities planned for the VMM-3 block. The exploratory period is divided into three distinct phases of three years each. The first phase began on Dec. 3, 2015.
How much is the investment for the first phase of the contract?
Our investment commitment for the first phase is approximately US$8 million.
What does the first phase of exploration entail?
The first phase of the Additional Contract is to carry out the production testing of the Picoplata #1 well. The Picoplata #1 well tests have been certified as conventional tests by the ANH, and are authorized under the existing environmental license covering conventional activities (ANLA Resolution 0857; originally granted to Shell and transferred to ConocoPhillips Colombia via ANLA Resolution 0227 on March 7, 2016.). The test will determine the characterization, quality of the reservoir and hydrocarbons in this area of the VMM-3 block. If the Picoplata #1 production tests are favorable, ConocoPhillips could advance to the second phase, which requires the granting of a new environmental license for unconventional activities.
Does ConocoPhillips Colombia have an environmental license for the exploration of unconventional reservoirs?
No, we do not yet have an environmental license for the exploration of unconventional reservoirs. We submitted our application to obtain an environmental license for the exploration of unconventional reservoirs in the VMM-3 block on Nov. 7, 2017, and are awaiting ANLA’s decision.
I’ve read in the news that you are exploring for unconventional resources without the correct environmental license. Is that true? No, that is not true. As is the case with all oil and gas projects in Colombia, an environmental license is required to carry out exploration activities. Our current environmental license is for conventional activities, so we are only conducting activities the ANH has certified as conventional. We do not yet have an environmental license for the exploration of unconventional reservoirs. For that reason, ConocoPhillips Colombia is not carrying out any activities certified as unconventional until we obtain an environmental license to explore unconventional reservoirs from ANLA.
What does ConocoPhillips Colombia have to do to get an environmental license for unconventional activities? To obtain an environmental license for unconventional exploration, we had to prepare and submit a new environmental impact assessment (EIA) to ANLA for approval (per ANLA’s Unconventional Environmental Regulations). We completed the new EIA, which included performing environmental baseline studies and conducting socialization meetings with communities. These meetings allowed for community members to ask questions and express any issues they may have about our potential plans. The feedback we gained from the socialization meetings was taken into consideration as we developed the EIA, and was included in the environment license application for the exploration of unconventional reservoirs we submitted to ANLA on Nov. 7, 2017.
Based on the production tests results of the Picoplata #1 well and if ANLA grants us the unconventional environmental license, we will be in a position to decide whether or not we will progress plans for further exploration.
When does ConocoPhillips Colombia expect to begin production from VMM-3?
As we are in the first part of the exploration process and have not yet determined the characterization and quality of the reservoir, we do not have an estimate for the start of the production process.