Colombia's oil industry - the good and the bad

As the global price of crude oil continues to fall, oil-related stories feature prominently in the Colombian headlines. According to Michel Janna, the Colombian finance ministry’s head of public credit, falling oil prices will most acutely affect Colombia in 2016.  He explained that, because average prices for 2014 are still high, the impact in 2015 “will be relatively little.” Janna added that it is still unclear how oil prices will affect Colombia’s debt levels in 2015, but with the information that he has right now, he anticipates that the impact will be minimal. Additionally, Janna noted that guerrilla attacks against Colombia’s oil infrastructure have affected production and the country’s overall revenue from oil.

The head of the Colombian Petroleum Association, Francisco José Lloreda Mera, continues to argue in the press for the use of fracking to grow Colombia oil reserves. The article discusses the difficult situation facing the country, whereby it needs to quickly boost its oil reserves in order to maintain its current level of oil revenues. The report notes that the government recently attempted to auction off unconventional oil fields that would require the use of advanced techniques like fracking in order to be developed, but there was very little interest on the part of oil companies.  Supposedly, Colombian state-owned oil company Ecopetrol is interested in obtaining an environmental license allowing fracking.

Colombian senator Jorge Robledo has positioned himself as one of fracking’s leading opponents in Colombia. He argued that Colombia needs to be careful to properly study this new technique and how it would be applied in Colombia before diving in so completely.  However, officials at the Colombian Ministry of Mining and Energy countered that fracking is only damaging if regulations are ignored, just like the conventional oil industry.

In a separate report, Johannes Dobinger, the United Nations Industrial Development Organization’s Andean head warned that the Colombia is over-reliant on mining, hydrocarbons, and ranching. These industries produce little in the way of employment, and the financial gains as a result are concentrated in the hands of very few people.