Leading Colombian daily El Tiempo interviewed Colombian finance minister Mauricio Cardenas, asking him about what measures the Colombian government will need to take due to the oil crisis’ impact on the state’ revenues. Minister Cardenas countered by saying that “The oil crisis is an opportunity that we need to take advantage of for the Colombian economy, because our industrial, fish farming, and tourism sectors have been affected during the last several years – the last decade – by the overvaluing of the peso.”
The Colombian government hopes that the newly-devalued peso will allow a new industrial leader to emerge in Colombia. Minister Cardenas emphasized that, despite the difficulties, foreign direct investment in Colombia has not slowed down, and he is confident that the country will continue to be attractive to foreign investors.
In security-related news, a UN report was released early this week warning that violence committed by the bandas criminales (bacrim) in Colombia is the greatest threat to public security in Colombia. The bacrim are involved in drug trafficking, illegal mining, and extortion, and likely pose an emerging threat to the Colombian oil sector. In recent years, leftist guerrilla groups like the FARC and the ELN have targeted Colombia’s oil industry as an easy sector to extort and steal from. Although these groups appear to be close to a peace agreement with the Colombian government, oil companies should worry that their attacks will be taken up again by the bacrim.
In other oil-related news, the markets were not kind to Ecopetrol’s and Pacific Rubiales’ stock prices after the announcement that Ecopetrol would not renew Pacific’s contract for the Rubiales oil field. Pacific’s stock price fell 8.6%, and Ecopetrol’s by 4.2%.
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