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Transactional, Social, And Legal Aspects Of Oil Exploration And Extraction In Colombia, Juan Carlos Palau

Northwestern Journal of International Law & Business

In Colombia, as in many other countries with oil reserves potential, the government has sought to reduce the activity's inherent high degree of un-certainty by shaping the legal and economic environment that foreign com-panies have to operate in, making it more profitable and attractive for them.16 This paper seeks to accurately represent this environment to the pro-spective investor, starting with the structures of the two basic transactions, referred to herein as "modes", through which most commonly, foreign com-panies participate in the oil industry in Colombia, namely, the Standard As-sociation Mode ("S.A.M") and the Risk Sharing Mode ("R.S.M.").17 The contractual agreements …