FARC continues attacks on Colombia's oil infrastructure

Displaying a total disregard for the environment and for the Colombian people, the FARC on Monday continued its attacks against Colombia’s oil infrastructure. The FARC bombed part of the Transandino pipeline in southern Putumayo before dawn, damaging two homes. Thankfully, very little oil was spilled because the pipeline had been shutdown for repairs because of earlier FARC attacks last week.

The Colombian government has called the oil spill caused by the FARC’s attack last week possibly the worst environmental disaster in the country’s history. Though the FARC acknowledged the environmental damage is an “undesired” effect of their war against the Colombian state, they stressed that “There is no greater damage to the environment than the ‘ecocide’ constantly perpetrated by the economic policies of this government that the Farc combats every day.”

Putumayo governor Jimmy Díaz Burbano went on the radio to beg the FARC to stop their environmentally destructive attacks. He pleaded, “Please, no more, sirs of the FARC.”

The National Colombian Association of Businessmen (ANDI) added to the calls for the FARC to focus on the peace negotiations in Havana instead of the attacks on Colombia’s oil infrastructure. The ANDI said in a statement, “The willingness for peace should go beyond just simple words and declarations, and become real acts of reconciliation.” It added that the recent pipeline bombings “go against the acts of peace that are necessary to create a political exit to the conflict and not only hurt the daily lives of hundreds of thousands of Colombians but also hurt the country as a whole.”

Peruvian President: Peru's economy must diversify

Peruvian President Ollanta Humala signaled over the weekend that he would support a policy of diversification so that his country can move beyond its reliance on exporting raw minerals and metals. He said that, “[Peru] cannot continue to develop itself living just on the sale of minerals and gas. The world has change in the last 50 years, and now it is not possible to think of developing a country in this way.” The news report, however, did not quote President Humala as proposing an alternative economic model for the country, or list the industries that he plans to focus on developing.

On Sunday, Peru21 ran a series of articles on the role of mining in Peru, and the effect that social conflicts have had on the country. Peru21 recognizes that Peru is a mining country, as mining accounts for 50% of exports, 20% of the tax base, 11% of GDP, and is the main source of foreign direct investment. However, despite the industry’s importance to the country’s economy, since 2008, 15 large mining projects worth more than $21 billion have been delayed or canceled because of conflicts with local communities. Click through to see the infographics that Peru21 included with the article.

According to Peru21, Cajamarca is the region in the country that has lost the most because of social conflicts, losing an investment of $8.1 billion in mining projects. Second in line is the department of Apurímac, which has lost $7.3 billion worth of investment. The report explained that the abandoned projects had repercussions throughout other sectors of the regional economy, affecting poverty levels, the development of the country’s infrastructure, and social programs.

On the subject of social conflicts, Southern Copper president Oscar González announced that his company will no longer hew to the 60-day timeline it had previously established to negotiate a resolution to the Tía María protests. He explained, “We know that it is not realistic to reach an agreement in such little time, and most of all, we know that we cannot convince everyone. So we will continue working without setting a timeline, but we will keep working until we get it done.”

Ecopetrol announces additional pipeline attacks

Colombian state-owned oil company Ecopetrol denounced three new attacks against Colombia’s oil pipelines, which Colombian authorities have attributed to the country’s leftist guerrilla groups, the FARC and the ELN. The Colombian Herald’s report noted that these attacks bring the total number so far for 2015 to 34, less than the 64 recorded during the same period last year.

The Mansoya-Orito and Transandino pipelines were the targets of the attacks, though the Transandino pipeline was shut down at the time, as it was undergoing repairs for a separate attack earlier this week.

The Inter-American Association for Environmental Defense, the National Environmental Forum, the Natura Foundation, and the Klimaforum Latinoamerica Network all denounced the recent FARC attacks for their destructive effect on the environment. The environmental organizations said in a statement that the oil spills that resulted from the FARC’s attacks “pose serious threats to people’s lives and health, as well as to the integrity of ecosystems.”

The most recent oil spill, a result of the earlier attack against the Transandino Pipeline, is, according to Colombian Environment minister Gabriel Vallejo, the worst environmental disaster in Colombia in the last 10 years. The attacks caused 410,000 gallons of crude oil to pour into the Mira River, contaminating the water supply for the Colombian city of Tumaco.

Mining will be key to Peru's economic future

Carlos Gálvez Pinillos, the president of Peru’s National Society of Mining, Petroleum, and Energy (SNMPE), gave a lengthy interview to the Worldfolio about his opinions on the future of the Peruvian mining sector. He explained that though the industry’s rapid expansion has driven Peru’s overall economic growth, it still has a long way to go. Gálvez explained that just 1.38% of the Peruvian territory is currently being used for mining, and the country has a portfolio of $65 billion in mining projects yet to be developed.

The SNMPE president recognized that the key impediment to bringing these projects to fruition is the bottleneck caused by social conflicts over the large-scale mining projects. Gálvez firmly believes that investment in the mining sector will generate employment and economic growth in complementary sectors like industrial metalworking and construction, which will create a rising economic tide that will ultimately help all Peruvians.

Peruvian news agency Andina reported Gálvez as saying that Southern Copper should take its time with the Tía María copper mining project. He stressed, “Those who are thinking short term are confused, because it requires a space of 3 to 4 months, at least, to communicate and explain the project and clear up doubts, without which the project will not be able to advance.”

Peruvian Minister for Energy and Mines, Rosa María Ortiz, agrees with that analysis. She believes that both mining companies and the Peruvian state need to regain the confidence of the country’s rural communities in order to receive their support for proposed mining projects. She explained that the government and the companies need to work hand-in-hand with the local communities to help them understand how these projects will benefit them.

Ecuador offers its help in cleanup after FARC attack

In the wake of the FARC’s attack on an oil pipeline in southwestern Colombia and the resulting oil spill, neighboring Ecuador offered to help in whatever way it can. Ecuadoran Hydrocarbon Minister Pedro Merizalde told reporters during a visit to the Ecuadoran side of the border, “Ecuador is ready to help when needed. Ecuador is united with its neighbor against these attacks.” Merizalde confirmed that the attacks on Colombia’s oil infrastructure in the Putumayo department have affected neither oil production nor transportation on the Ecuadoran side of the border.

In other oil-related news, Cinmipetrol president Adriana Martínez, at the 2015 International Oil and Mining conference, said that the country’s oil sector is taking too long to move from diagnosing its problems to dealing with them. She said that the industry needs to cut costs immediately to make its operations more viable, and the country needs to provide economic incentives for the country’s largest and most expensive projects.

Colombian state-owned oil company Ecopetrol issued $1.5 billion worth of 10-year bonds in the overseas markets to fund its planned average annual investments of $6 billion to maintain its margins while increasing its oil reserves despite the collapse in global oil prices. S&P and Fitch Ratings both announced that they would give the Ecopetrol securities a BBB rating, which matches Colombia’s investment grade.

Generator company Aggreko sees ample opportunity for expansion in Colombia. Aggreko plans to increase its operations in Colombia, focusing on the country’s mining and oil sectors. The company believes there will be create chance for sales growth from these sectors despite the crises both sectors are currently undergoing.