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Colombia to cut oil taxes in bid to boost offshore exploration

Published 2015-11-09, 01:03 p/m
© Reuters. Colombia to cut oil taxes in bid to boost offshore exploration
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BOGOTA, Nov 9 (Reuters) - Colombia will lower tax rates for
oil companies drilling in some offshore blocks in the Caribbean,
the Mines and Energy Minister said on Monday, in an effort to
encourage exploration amid a global slump in the price of crude.
Contracts for various offshore blocks will get a 25 percent
discount on income taxes and will be exempt from value-added tax
(VAT) and customs charges, Mines Minister Tomas Gonzalez said in
a statement.
"We have seen the potential of the Colombian Caribbean for
the future of hydrocarbons," Gonzalez said. "That is why we are
making investment in offshore more attractive, taking measures
that will allow us to incentivize exploration and production."
The move will help keep output near one million barrels per
day in the medium term, he added.
Colombia's public finances have been battered by the fall in
prices for crude oil, its biggest export and source of foreign
exchange.
The Andean country produced an average 1.007 million barrels
of crude per day in September. urn:newsml:reuters.com:*:nL1N11E1AG
State-run Ecopetrol ECO.CN produces more than half of
Colombia's oil, while the Canada-based Pacific Exploration and
Production Corporation PRE.TO is the biggest private player.
The government hopes to increase investment in the sector to
some $15 billion a year from current levels of between $5
billion and $7 billion.

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