Colombian oil industry goes from bad to worse

Late last week, Colombian daily El Tiempo reported on some of the lesser-known problems confronting the Colombian oil industry. In addition to falling global oil prices, the Colombian oil industry has also had to combat frequent opposition and protests from local communities. Now, oil companies need to worry about legal actions, currently working their way through the Colombian court system.

The majority of these actions are in relation to oil extraction in the department of Putumayo. Oil activities in this region have been undermined by attacks on oil infrastructure and my frequent protests. Oil companies are worried, though, about a possible bias in the Colombian court system towards local communities.

Unnamed sources told El Tiempo that the Courts have ruled in favor of the locals’ protests despite the fact that the oil companies were in full compliance with the laws that existed at the time of the complaint, and despite the fact that in a number of cases, when the environmental license was issued, the indigenous communities were not even living in the area. Understandably, the oil sector is worried about the precedent that this might set, and the further damage it might do to the already-beleaguered oil sector.

In other oil-related news, Campetrol president Ruben Darío Lizarralde warned that Colombia might need to start importing oil within as little as five years if the country’s investment in exploration does not climb soon. He stressed that, “To obtain oil, we need to explore, and this is not happening right now. In addition, the government has not taken steps to incentivize this activity, which is 90% shut down.”