Something new in oil contracts was announced last week in Bogotá. Colombia's government-owned oil company, Ecopetrol (Empresa Colombiana de Petroleos), and a private U.S. oil firm, Cities Service Co., agreed to share costs and profits in developing the promising El Carare area, a 2,200,000-acre tract near the Magdalena River 120 miles north of Bogotá.
The contract provided that Ecopetrol will contribute a fourth of the capital investment and Colombia Cities Service Petroleum Corp. (a local subsidiary) the rest. The profits will be split in the same ratio. As is customary, the joint enterprise will pay a royalty to the government,...
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