Production - Foreign - Petroleum Developments in Columbia in 1931

The principal interest in the oil situation in Colombia during the year centered around the enactment of the new petroleum law and the applications for concessions subsequently made by various interests. The year was a comparatively uneventful one from the standpoint of actual operations of drilling and development. There was a falling off both in exploratory work and in the development of producing properties; and as a result of curtailment of production, the output of oil from the country dropped to the lowest level since the completion of the looping of the Andian pipe line to the coast in 1927. Legislation Law No. 371 of 1931, with its Regulatory Decree No. 1270, was enacted during the year and marked Colombia's attempt to encourage more extensive exploration and development of the prospective oil resources of the country. Some of the outstanding provisions of the law are as follows: Tracts may be acquired by a concessionnaire directly and by transfer ranging from 5,000 to 100,000 hectares, except in certain reserved territories east of the summit of the eastern cordilleras where the maximum is increased to 200,000 ha. A security deposit of $1 per hectare, minimum $25,000, is required on government grants, and is returned to the concessionnaire only upon the fulfillment of stipulated terms of the law. Rentals, increasing progressively from 10c per hectare per year the first two years to 50c per hectare the sixth year, are required up to the start of the production period (beginning of development). The concession terminates 30 years after the beginning of the production period and can be extended for 10 years more at the option of the contractor. Wells must be produced at no less than 25 per cent of their maximum capacity. Royalties on oil from national lands vary from 2 to 11 per cent of the gross product, depending on the distance of the concession from the port of loading. Petroleum from private property is subject to a governmental tax varying from 1 to