Colombia hopes to raise its oil production to 1 million b/d by 2020—if its neighbors Ecuador, Venezuela, and Nicaragua will allow it.
Colombia’s state-owned oil company Ecopetrol SA recently resumed sending oil through its trans-Andean oil pipeline after operations were suspended following several attacks in the southern provinces of Narino and Putumayo near the border with Ecuador.
Ecopetrol normally sends about 60,000 b/d of oil through the pipeline from oil fields in the southern province of Putumayo to the Pacific port of Tumaco. The left-wing Revolutionary Armed Forces of Colombia, or FARC, are suspects in the multiple attacks on the pipeline.
Attacks on pipelines by hostile forces are hardly an irregular occurrence anywhere in the world. But this attack is suspect due to the fact that the FARC forces—although Colombian—are actually based in Ecuador.
Green cheese
Naturally, the Ecuadoran government claims no responsibility for the attack and even proclaims its innocence as regards any support for the FARC forces. But if you believe that, you’ll doubtlessly accept that the moon is made of green cheese.
The Colombians surely don’t believe it as evidenced by their preemptive strike on the FARC forces a few weeks back. That certainly raised the hackles of the Ecuadoran government, as well as its allies in Venezuela and Nicaragua.
Indeed, the three neighbors undertook a number of hostile gestures—both military and diplomatic—in an effort to intimidate the Colombian government. Not least, they tried to make out that the Colombian president is a lackey of Washington—an accusation that often plays well to the crowd.
Why are the three nations opposed to Colombia? That’s not hard to say, and no one doubts that oil is involved. Colombia produced about 540,000 b/d of oil last year, and much of its output was exported, primarily to the US.
High aims
But it would certainly like to increase those figures, according to Armando Zamora, chief of Colombia’s oil licensing agency ANH, who said Ecopetrol aims to raise output first to 700,000 b/d by 2015 and to 1 million b/d by 2020.
“Our goal is no longer just to maintain self-sufficiency. We will be able to continue exporting the same surpluses as now or more,” said Zamora, who added that his country offers “one of the most attractive concession contracts in the world, certainly in Latin America.”
Zamora told a road show in London last week: “Colombia has never expropriated, has never changed contracts unilaterally.”
In fact, Colombia seems to have emerged as an increasingly attractive option in the region as neighboring producers like Venezuela, Ecuador, and Bolivia have rewritten contracts to impose tighter terms on international oil and gas companies.
There is evidently good reason for those neighbors to be envious of Colombia and, as a result, to try and sabotage its efforts to improve its oil and gas industry.
