Venezuela and Colombia are pursuing different strategies in developing their oil industries, underscoring Colombia's need for quick investment while Venezuela leaves firms waiting on the sidelines as it presses for better terms.
Colombia, desperate to find new sources of oil, has cut oil tax rates and allowed oil firms to operate some projects without state involvement. Venezuela, looking to finance a "revolution" for the poor, is increasing taxes and rewriting contracts in an effort to obtain what it calls a fairer share.
"Eighty-seven percent of Colombia is unexplored," for oil and natural gas, Colombian President Alvaro Uribe told an audience of oil executives in Colombia on Friday. "That's why we need all of you."
To draw investment, Colombia cut the minimum royalty rate on oil projects to 8 percent last year. Colombia's strategy resulted in 25 new exploration and production contracts with private firms last year.
With only 1.5 billion barrels of proven reserves, Colombia is dwarfed by Venezuela's 78 billion barrels, and needs to find more oil fast.
Armando Zamora, head of Colombia's National Hydrocarbons Agency, said the country hopes to sign over 30 new contracts this year.
Colombia is seeking private investment to find more oil reserves and ramp up output at existing fields.
"Thanks to the visionary leadership of Uribe, Colombia has become a model for other nations to follow," said William Drennen, a vice president for ExxonMobil's operations in the Americas.
Exxon began a project to explore for natural gas and oil off Colombia's Caribbean coast last year.
The last time Venezuela sold exploration and production rights was in 2003, for a handful of offshore natural gas projects in the Deltana platform off the country's eastern coast.
Since then, Venezuelan President Hugo Chavez and other top officials have accused private firms of "looting" the country for years under preferential tax terms.
Chavez recently announced Venezuela would reclassify the income tax charged to oil companies to 50 percent, up from a 32 percent preferential rate. Meanwhile, officials have said firms could be billed for billions of dollars in back taxes.
"We are waging battle to preserve our [oil] resources and maintain control over them," Venezuelan Oil Minister Rafael Ramirez told oil workers at a conference last week.
"Transnationals try to expropriate energy resources from our people ... and that is what we have been suffering from," Ramirez said.
Venezuela, the world's No. 5 oil exporter, remains a leading supplier of fuel to the US even as relations have grown tense between Washington and Chavez.