Colombian breakthrough in peace talks likely to help the oil industry

On Wednesday, Colombian President Juan Manuel Santos, together with the leaders of the FARC, announced a significant advance in the lengthy negotiations between the two sides over a peace treaty. The two sides finally agreed on the fourth point in the peace agreement, negotiating a new legal setup to try FARC fighters for human rights abuses.

Negotiations however are not yet over, as the two sides still must figure out how the FARC will demobilize, disarm, and provide reparations to the victims of the conflict. President Santos added that Colombians will also provide their opinion on the agreement through a referendum, and that the final deal will also need to be approved by the Colombian Congress.

Nonetheless, this announcement provides some much-needed relief to the beleaguered Colombian oil industry. One of the FARC’s favorite targets in recent years has been the country’s oil infrastructure. This announcement means that those attacks will soon become a thing of the past.

Earlier this week, the Colombian government also announced a plan for new incentives for the Colombian oil industry to encourage new investment in oil production and exploration. Colombia’s reserves are quickly running out, and given the current climate of depressed oil prices, the government needs to do everything it can to stimulate the industry.