MercoPress. South Atlantic News Agency

YPF joins the “oil rush” in Colombia, South America’s third producer

Mexico’s Carlos Slim and Brazil’s Eike Batista are also involved in Colombia

YPF SA, Argentina's largest oil company, agreed to explore for oil with Canada’s Alange Energy Corp. in Colombia that is attracting investors as it become South America’s third largest producer of oil behind Venezuela and Brazil.

Buenos Aires-based YPF will take a stake in an exploration venture at the Catguas oil block in eastern Colombia, spend as much as 23 million USD at the Carbonera natural-gas block and may jointly explore and develop other blocks, Toronto-based Alange said in a statement today.

The overall YPF investment could involve another 100 million US dollars over the next three to five years. YPF will get a 35% interest in Catguas in which Alange has a 50% stake originally and also a 10.5% interest in the southern area of Catguas in which Alange holds a 15% interest.

YPF will thus join billionaires Eike Batista of Brazil and Carlos Slim of Mexico in seeking to tap energy reserves in Colombia. YPF, Argentina's biggest crude producer and fuel retailer, also plans to start drilling off the coast of Guyana this year to tap new reserves amid many aging fields at home.

Alange and YPF also may develop blocks in eastern and central Colombia that the Canadian company won in a government auction last year, Alange said.

Colombia is expected to produce 1.7 million barrels of crude and natural gas a day in 2020.

Slim's Grupo Carso this year bought a stake in Geoprocesados SA's Tabasco Oil Co., which is exploring in eastern Colombia. Batista's OGX Petroleo & Gas Participacoes SA may start producing oil in Colombia as soon as next year, OGX Chief Executive Officer Paulo Mendonca said in 2010.