Watching The World: FARC down, Colombia up

Nov. 22, 2010
Colombia's oil and gas industry is increasing its output these days and for many reasons, not least a decline in the power of the Colombian rebel group Revolutionary Armed Forces of Colombia (FARC).

Colombia's oil and gas industry is increasing its output these days and for many reasons, not least a decline in the power of the Colombian rebel group Revolutionary Armed Forces of Colombia (FARC).

Colombia's efforts were underlined last week when 13 FARC members were killed during a military raid and bombing of a rebel camp near the border with Ecuador.

"The troops which entered the camp of the FARC's 48th squad recovered the bodies of 13 terrorists," Colombia's defense ministry said. "It was a vital hit to Squad 48, the entity which gives the FARC the most resources for drug trafficking," it said.

The attack came on the 100th day in office for Colombia's President Juan Manuel Santos, who has vowed to redouble efforts to bring Latin America's longest-running leftist insurgency to heel.

FARC's losing battle

FARC, Colombia's largest rebel group, has been fighting for 40 years to overthrow the government, but it increasingly looks like a losing battle for the rebels—thought by the US to be backed by the government of Hugo Chavez in neighboring Venezuela. Indeed, the Colombian government, which has made fighting FARC a top priority, has obtained billions of dollars in US aid for counterinsurgency operations, and that is paying off for both countries.

Chavez is not charmed. Earlier this year, the Venezuelan president sent 1,000 troops to his country's border with Colombia, and he even threatened to cut oil supplies to US. All of that came after Colombia accused Chavez of supporting FARC.

New pipeline announced

But Caracas and Washington were undaunted by Chavez's ploy, and the results show. Just last week, Ecopetrol announced the formation of a new international partnership aimed at building and operating a 450,000-b/d pipeline from Llanos basin out to the Covenas Export Terminal on the Caribbean Sea (OGJ Online, Nov. 15, 2010).

The significance of the pipeline's terminus was not lost on analyst BMI, which noted that Ecopetrol is looking to boost export capacity on Colombia's Atlantic coast instead of its Pacific one, demonstrating that Bogota "continues to look to the US as its main export destination."

That, too, will stick in the craw of Chavez, who has long vowed to change the destination of his country's oil from the US to China. The message sent by this new Colombian pipeline is that Chavez can send his oil anywhere he wants to as Bogota stands ready to help fill the gap.

If that sounds far-fetched, consider the numbers. In 2009, Venezuelan oil exports to the US averaged 1.078 million b/d, while Colombia's production of oil is expected to hit 900,000 b/d by yearend and to reach 1.5 million b/d by 2018.

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