Lasmo has decided to concentrate its resources elsewhere, like neighboring Venezuela, which opened up to foreign oil investment in 1996 and has attracted billions of dollars so far. What's more, Venezuela doesn't have any guerrillas blowing up pipelines, as happened 65 times last year in Colombia. British Petroleum moved its regional headquarters from Bogota to Caracas last year. Shell has shelved plans for onshore oil exploration in Colombia, although it signed a deal for offshore gas exploration earlier this month. Triton, which made a name for itself with the discovery of a huge gusher in Colombia in 1991, has hired bankers for a possible sale of its Colombian interests.
Still, Colombia hopes the proposed new projects will replenish proven reserves by four billion barrels by 2008 and increase exploratory drilling up to 60 wells yearly by 2001, says Mr. Cabrales. Colombia's reserves currently are less than three billion barrels, he says.
But some oil company executives in Colombia believe the Andean nation needs up to 100 new exploratory wells each year to avoid net imports. The nation has dawdled too long and lost its competitive advantage over other developing nations, they say.
Colombia has been hamstrung with guerrilla violence over the past two years, but its inability to create more-attractive contract terms over the past decade may have done more to drive companies out.
"The security issue is a factor ... but contract terms are not realistic," says one consultant for a number of oil companies in Colombia.
One of the key problems was a 1989 modification that changed exploration contracts to a sliding scale. Instead of evenly splitting revenues from new oil production for the life of the contract, the government's take would increase to 60% and later 70% as certain total production levels were achieved. This doesn't include huge outlays for exploration, which could increase the government's effective take to more than 90%.
"This was very negative for exploration," says one oil executive, "so seismic exploration and exploratory wells dropped."
Oil companies tried for years to modify these contracts with little success. In 1994, the government eliminated the sliding scale for new contracts but not for old ones, which remained in force. The old contracts accounted for most of Colombia's most-promising fields. Last month, the state oil company Ecopetrol announced changes in old contracts that would allow credit for a greater portion of exploration costs in calculating the government's take.
Now, oil companies have a shot at reducing the government's take, including exploration costs, from more than 90% of oil revenues in some cases to less than 85%.