Good news from the Colombian oil industry

As we’ve discussed these last few weeks, Colombian officials are extremely worried about the state of the country’s oil industry. To recap: Colombia’s economic boom these last ten years is due in large part to the growth of the country’s oil industry, but this economic success is imperiled by falling global oil prices, dwindling Colombian reserves, and ongoing attacks by FARC guerrillas.

Bloomberg Businessweek wrote about the impact that the decline in oil prices has had on Colombia, quoting Colombian central bank governor Jose Dariel Uribe as saying, “It’s a big shock, without a doubt. … The biggest effect is on the oil revenues of the government, and that obviously generates challenges for fiscal policy.” Colombian finance minister Mauricio Cardenas is desperately trying to raise taxes to account for the $6 billion hole in Colombia’s budget for next year, which is equivalent to 1.6% of Colombia’s GDP.

However, Talisman Oil and Gas and Ecopetrol had some good news for Colombia’s beleaguered oil sector when they announced a new oil discovery in the CPO-9 block in Colombia’s Meta department. Talisman shares traded up 2.8% on the announcement, though the company is still awaiting the results of further analysis of the product of the test well.