A Review of the Nigerian Energy Industry

Bomb closure hits Colombia output

Oil rigs25 April 2014, News Wires – The month-long closure of a key Colombian oil pipeline following a bomb attack has cut the Andean nation’s daily crude output by about 72,000 barrels, or about 7%, according to data from state-run oil company Ecopetrol, which owns the duct, according to a report.

The Cano Limon pipeline, which carries crude from an oil field of the same name to the Caribbean coast, was shut down on 25 March by a bomb attack blamed on leftist rebels, prompting Ecopetrol to declare force majeure on 25 delivery contracts, Reuters reported.

Bomb attacks by rebels are frequent and usually repaired within a few days, but an indigenous community close to where the pipeline passes is refusing Ecopetrol access to repair the damaged stretch of the 780-km (485 mile) tube, the news wire said.

In 2013, there were 259 attacks against pipelines in Colombia, Latin America’s fourth-biggest oil producer, the highest number in a decade. Colombia has been holding peace talks with FARC rebels since late 2012 even as combat between the two sides continues.

In an Ecopetrol document seen by Reuters, the company said oil output has fallen by 2.2 million barrels since the attack, equating to roughly $220 million in lost revenue, more than half of which, or $136 million, the government would have received as royalties and taxes.

The Ecopetrol document said the damaged stretch of the pipeline lies outside of the indigenous reserve and that the company has the right to enter the area freely to access the pipeline, but that nonetheless, it was being blocked by a group of 60 to 80 U’wa.

The U’wa want the pipeline re-routed away from their reserve in Toledo municipality in Norte de Santander province and for Ecopetrol’s planned nearby Magallanes oil project to be scrapped because it would pollute a nearby river.

U’wa spokeswoman Aura Benilda Tegria told Reuters the indigenous group is denying Ecopetrol access in order to press its demands, but confirmed its representatives would attend a planned meeting with government officials and Ecopetrol representatives.

She refuted Ecopetrol’s claim that the affected stretch of the pipeline lies outside of U’wa territory.

The Cano Limon and Caricare fields, both operated by New York-listed Occidental Petroleum and which usually feed around 67,000 barrels per day into the pipeline and employ hundreds of contractors, have been shut down since the explosion.



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