Colombian Finance Minister Mauricio Cárdenas spoke
with the press on Wednesday, telling them that Colombia’s current account
deficit ballooned from 5.2% of GDP to 6.2% of GDP so far in this year, or
approximately $18 billion. Minister Cárdenas called this deficit level “unsustainable,”
and blamed the problem on the disappearance of oil revenue and the devaluation
of the Colombian peso. He explained, “There's a series of factors, mostly
external, in which we have to use all our policy tools.”
On Tuesday, Colombian think tank
Fedesarrollo published
an investigation warning that barring a significant discovery of new oil in
Colombia, the country’s reserves be will exhausted within 7 years if the
current production levels are maintained. Such a quick transition to becoming a
net oil importer would be disastrous for the country’s finances and for the average
Colombian consumer.
Even worse, exploration activity
in Colombia has almost completely ground to a halt, with only 28 exploratory
wells drilled so far in 2015. Fedesarrollo mostly blamed the lack of new oil
exploration on the collapse in oil prices, which has dissuaded oil companies
from investing in exploration.
Colombian state oil company
Ecopetrol is not standing idly in this oil crisis. Ecopetrol shook
up its executive team, naming a new executive vice president and a new
corporate director for internal audits. In addition, Ecopetrol announced
that it had explored four new areas in the Gulf of Mexico. These oil blocks
however are American, not Colombian.
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