Colombian oil region in crisis : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Friday, 13 July, 2001, 05:34 GMT 06:34 UK Colombian oil region in crisis

Arauca Department in the northeast of Colombia was once an affluent oil-producing region. But last week, guerrillas bombed the 775km (485 mile) long oil pipeline operated by US-based Occidental Petroleum Corporation. This year alone there have been more than 100 attacks. The Bogota daily El Tiempo says rebel attacks on the pipeline have cost the country $340m in lost revenue.

The guerrillas are fighting against what they perceive to be foreign dominance of the Colombian oil industry. But no-one has been hit harder than the population of Arauca.

Two rebel groups are fighting for control of the oil fields

Today the region is facing the worst financial crisis in its history. Governor Hector Federico Gallardo told Caracol radio that all investment in infrastructure and social programmes had been suspended.

One of two operating theatres in the main hospital, San Vicente, is about to close. Nearly 1,000 teachers paid by the Arauca Governor's Office are owed two months' back pay. One hundred doctors have been waiting three months for their wages.

Shops have suffered too. Thousands are on the verge of closing down as a result of a guerrilla ban on the sale of beer, soft drinks and bottled water.

Distribution stopped in May, because the suppliers - including Coca-Cola - refused to pay the rebels protection money. After oil royalties, tax on beer consumption is the region's main source of revenue.


Last week, the governor appealed for help. "It has been 15 years since the government invested one single peso in social development, because it left everything to the royalties", he said.

More troops are needed to guarantee security in the region "There has been no oil production, and the department has been paralysed for five months, besieged by a war in which civilians continue to suffer."

A special security council meeting was recently held to resolve the crisis. A government commission led by Vice-President Gustavo Bell heard that if help was not forthcoming, 300,000 people faced the collapse of public services.

Oil companies are calling on the government to guarantee security in the region.

Still committed

In an interview in El Tiempo, the president of Occidental Petroleum in Colombia, Jose Guimer Dominguez, gave assurances the company was still committed to Colombia. "We have been there for the good times and we are not thinking about abandoning it in the bad times," he said.

But he added that rebel attacks on the pipeline had led to the suspension of more than 500 workers' contracts pending guarantees for continuous production. For the time being, the company would make no further investments in other Colombian oil projects.

-- Martin Thompson (, July 13, 2001


07/13 11:00A (DJ) +DJ Colombia's Cano Limon Pipeline Stalled By Rebel Bomb

DOW JONES NEWS 07 -13 -01 11:00 AM

DJ Colombia Cano Limon -2: Spillage Of Around 10,000 Bbls

BOGOTA (Dow Jones)--Colombia's No. 2 crude pipeline, the Cano Limon, has been stalled since a rebel bomb attack late Thursday, a spokesman for state oil firm Empresa Colombiana de Petroleos SA (E.ECO), or Ecopetrol, said Friday. He said around 10,000 barrels of oil were spilled, according to preliminary estimates. "But we know that only from flyovers," the spokesman said. "Our engineers haven't been able to reach the site yet." He added that the army is still trying to secure the zone, within 100 km of the pipeline's origin in the eastern province of Aruaca, to enable repairs to begin. The spokesman declined to speculate when pumping could restart. The pipeline, which Ecopetrol operates, has operated for around 85 hours since last Friday. It was previously paralyzed since Feb. 17, when rebel attacks escalated. This was the 110th bombing of 2001, already the worst year on record. The spokesman declined to speculate which of Colombia's two major guerrilla groups was responsible for either incident. The Colombian army blames recent oil-sector violence on both the Revolutionary Armed Forces of Colombia, or FARC, and the National Liberation Army, or ELN. Since Feb. 27, Occidental de Colombia Inc., local unit of Occidental Petroleum Corp. (OXY), has had in effect a "force majeure" declaration, which seeks to exempt the company from its contractual obligations as the field's operator, due to circumstances beyond its control. Production was shut down after storage facilities at the field filled up. When functioning normally, the 780 -km pipeline transports around 120,000 barrels a day from the Cano Limon field to the Atlantic port of Covenas, for export by Ecopetrol and Occidental. -By Mary Morrison, Dow Jones Newswires; 571 -619 -0993; (END) DOW JONES NEWS 07 -13 -01 11:19 AM

-- PHO (, July 13, 2001.

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