-Caveat Lector-
=========================================
Oil accounts for 35 percent of Colombia's
exports, with coal making up 7 percent.
Colombia is Latin America's fifth-largest
oil exporter, and sends 85 percent of its
crude to the U.S.
___________ =========================================
REUTERS
Wednesday, 13 June 2001
Foreign investment up in
Colombia's oilfields
------------------------
By C. Bryson Hull
HOUSTON, Texas -- Foreign oil companies are tapping more of Colombia's
rich oil and gas fields as the country offers better contractual terms and
increased security, the nation's ambassador to the United States said on
Wednesday.
``Colombia has understood that our efforts to make investments in the
energy sector more attractive to you are tied to the well-being of all our
citizens,'' Ambassador Luis Alberto Moreno told an audience of energy
executives at a luncheon sponsored by the InterAmerican Chamber of
Commerce.
President Andres Pastrana's administration has already increased foreign
investment by upping the return energy companies get from exploration and
production activities, Moreno said.
Previously, foreign operators had to give the government, via Colombian
state oil firm Ecopetrol, half of their production. The new contracts, 28
years in length, lower the state's cut to 30 percent. Right now, 80
foreign energy companies are operating in Colombia, he said.
Geologically speaking, Colombia is an attractive target for exploration
and production companies because of its rich and mostly untapped oil and
gas reserves. Moreno said Colombia has 33 billion barrels of oil
equivalent and 7 trillion cubic feet of proved reserves in natural gas.
But the most bedeviling problem for foreign oil companies is maintaining
security for its workers and operations. Guerrillas fighting in Colombia's
37-year-old civil war have bombed pipelines and production facilities and
kidnapped workers, adding significant costs and risks.
For example, leftist rebels in April kidnapped 27 employees working for
U.S. company Occidental Petroleum Corp. at a remote oil field. The Cano
Limon pipeline Occidental operates has been bombed more than 100 times.
Harken Energy Inc., a Houston-based oil company, in recent months said it
was considering the ``timing'' of its Colombian operations, and last week
said it planned to merge all of its foreign assets with
internationally-focused operator.
Pastrana has pushed hard to reach peace with the leftist guerrilla groups,
which he sees -- along with the eradication of the nation's illegal drug
trade -- as a key to attracting foreign investment to fund infrastructure
improvements.
``There is still work to do. We are working hard to reach a peace
settlement, a political solution with the main insurgency group, the FARC,
which will eventually make situations in Colombia easier for private
investors,'' Moreno said.
FARC is the acronym formed by the Spanish name of Colombia's largest
leftist guerrilla group. The leftist groups generally oppose Pastrana's
plans.
Pastrana's $7.5 billion Plan Colombia, a broad policy initiative that
initially focuses on fighting drug production, also includes efforts to
protect Colombia's energy infrastructure, Moreno said.
Oil accounts for 35 percent of Colombia's exports, with coal making up 7
percent. Colombia is Latin America's fifth-largest oil exporter, and sends
85 percent of its crude to the U.S.
Copyright 2001 Reuters
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