Shell and Colombian state-owned oil and gas operator Ecopetrol have signed an agreement to jointly develop three gas blocks in the Caribbean: the Fuerte Sur, Purple Angel and COL-5 blocks, situated in deep-water areas of the Colombian Caribbean where a new gas province has been recently discovered.

The acquisition includes the Kronos well, first drilled in 2015, and the Purple Angel and Gorgon wells, which were drilled in 2017.

Under the deal, Shell will finance the project will acquire a 50% operating-stake of the blocks.

Ecopetrol president Felipe Bayón said: “We are very satisfied with this alliance that will lead us to increase the reserves and production of an environmentally friendly fuel, key in the energy transition, and strengthen the strategic relationship with Shell, with which we have already been working in the Brazil Presal and in the Gulf of Mexico.”

The deal between Ecopetrol and Shell is subject to approval by the Colombian National Hydrocarbon Agency (ANH) and the fulfilment of customary transaction conditions. Once they obtain approvals of the authorities, the two companies intend to drill a boundary hole in the area at the end of 2021 and carry out the first production test. According to Ecopetrol’s estimates, the discoveries could exceed 3 trillion cubic feet and significantly expand the gas supply for Colombia.

President of Shell in Colombia Ana María Duque said: “This position is a significant step for Shell in Colombia and in South America. The agreement brings together the regional knowledge of Ecopetrol, coupled with Shell’s experience in deep water and integral solutions of Natural Gas.

We have collaborated with Ecopetrol on multiple occasions since its creation, and we are very happy to continue demonstrating our commitment of more than 84 years working with Colombia in its energy resources,” she added.

The Colombian Petroleum Association has estimated that oil companies will spend between $920m and $1bn on exploration efforts in Colombia in 2020, from these between $250m and $260m will be designated to offshore projects.

The news came on the same day Shell Australia announced plans to build its first large-scale solar farm in Queensland, Australia, adjacent to the footprint of Shell’s QGC natural gas project.

The company’s recent expansions seem to be part of its efforts to become the world’s top electricity producer by 2030.