The rising costs of FARC attacks on Colombia's oil infrastructure

Attacks by the FARC have dominated headlines in Colombia so far in 2015. An attack in the Putumayo region caused one of the largest environmental disasters in Colombian history, and the attacks have caused further damage to already-shaky investor confidence. To add insult to injury, the 55 attacks against Colombia oil infrastructure so far in 2015 have come with a total price tag of $1.5 billion Colombian pesos, including repairs, decontamination, loss of oil, etc. A study by Campetrol estimates that, by the end of the year, the final cost associated with these attacks on Colombian oil infrastructure could exceed $142 million Colombian pesos.

In related news, the Colombian military denounced a new FARC tactic to avoid military action in response to the oil spills caused by the FARC oil infrastructure attacks. According to the Colombian Army, the FARC has begun installing bombs that can be detonated remotely. On Thursday, the Army was able to find and deactivate several bombs before they could be detonated.

These attacks could not come at a worse time for the Colombian oil sector. The Colombian government’s revenues have been severely affected by the collapse in global oil prices. As a result, Colombian Finance Minister Mauricio Cárdenas called the 2016 national budget that he recently submitted a policy of austerity. Public investment in agriculture, housing, and mining and energy were particularly hard-hit.

In mining-related news, the Colombian ministry of the environment announced the establishment of six new natural protected areas in the country. As a result, the National Mining Agency will be unable to issue new mining concessions in these protected areas. However, the borders of the protected areas have yet to be fixed, and a number of mining concessions have already been issued for these areas. Resolving these conflicts will be a tricky issue for the Colombian government.