Scandals force Colombian mining minister to resign

Colombia Reports added to the stories regarding the resignation of Colombian Mining Minister Tomás González. According to the article, González resigned because he had been charged with leading a corruption scheme, but Colombian President Juan Manuel Santos insisted that he resigned because of his failure to appropriately manage Colombia’s energy crisis brought on by El Niño.

The report noted that Connecta, a company connected to González’s family, received $2 million in government contracts while González served as minister. Although González sold his 20% stake in the company in October 2010 to join the government, he rejoined the company in 2013 and closed several large public opinion polling contracts with the Colombian government.

In oil-related news, oil companies throughout Latin America are slashing their budgets in response to the collapse in global oil prices. Ecopetrol, PDVSA, Petrobras, Pemex, and YPF all provide significant revenue to their respective governments, but have come under significant pressure in the last two years as oil prices have remained below $40 per barrel. In many cases, these oil companies are overleveraged and unable to adequately invest in new oil exploration.

Lastly, Colombian business journal Dinero published a history of the Colombian oil industry, tracing the growth of the industry during the last 15 years, and analyzing the significant revenue generated by the sector for the Colombian government. The report lamented, though, that the oil industry was unable to escape the resource curse and form a base for technological innovation and increases in productivity, instead leaving the Colombian government dependent on the oil revenues.