Colombia's National Hydrocarbons Agency, or ANH, and Royal Dutch Shell PLC on March 11 signed two exploration and production contracts for the COL 3 and GUA OFF 3 blocks located in the Colombian Caribbean Sea.

ANH President Luis Miguel Morelli said Shell will invest $100 million in the first exploration phase of the two blocks, but the investment could increase to $650 million if the Anglo-Dutch oil major decides to continue with the program following the two phases.

In the contract for the 400,000 hectare COL 3 Block, Shell would have to develop a minimum exploratory program in which the first phase would not only include reprocessing 3D seismic data over an area close to 1,000 square kilometers but to also drill at least one exploratory well.

For the 480,000 hectare GUA OFF 3 block, a three-phase minimum exploratory program is being considered. Its first phase would include gathering 2,461 kilometers of 3D seismic data, taking 43 piston core samples and reprocessing 3D seismic data over an area spanning close to 2,000 square kilometers.

"We will increase our knowledge of the Offshore resources availability, expand the deepwater exploration frontier, and offer us the option to continue to strengthen relationships with communities," Shell in Colombia President Ana María Duque said.

Duque said Shell will bring in a co-owner, subject to "corresponding government approvals."