Worldandnation: Rebel bombing campaign harms Colombia's oil industry

Rebel bombing campaign harms Colombia's oil industry

By KIRK SEMPLE

BOGOTA, Colombia -- When rebels detonated some dynamite on July 23 and blew a hole in Colombia's second-largest petroleum pipeline, oil officials here didn't think much of it. After all, this was normal rebel behavior, a form of protest against what the insurgents regard as excessive multinational presence in the oil sector.

Little did the oil officials know, it was the beginning of the longest sustained bombing blitz against the so-called Cano Limon-Covenas pipeline since it was built in 1986.

In the past eight weeks, soldiers of the leftist National Liberation Army, or ELN, have punctured the line at least 23 times and paralyzed operations at the Cano Limon well field, which is operated by Los Angeles-based Occidental Petroleum. The most recent attack occurred Tuesday and the pipeline remained out of service until early Friday morning.

Before the bombardment began, the line was carrying about 110,000 barrels of crude a day from the Cano Limon field in northeastern Colombia to the Caribbean port of Covenas for export to other countries.

At a time of soaring oil prices, when oil-producing countries should be smiling as their coffers overflow, the rebel bombing blitz has unleashed fresh cause for worry in Colombia.

Not only have the attacks cost the government hundreds of millions of dollars in revenues, but more insidiously, they have further eroded confidence in Colombia as a profitable and manageable place to do business, industry experts say.

"The security issue is a big negative for companies doing business in Colombia," said Alejandro Martinez, head of the country's main industry trade group, the Colombian Petroleum Association. "It's a very serious situation, very worrisome."

The attacks have challenged efforts by the administration of President Andres Pastrana to boost foreign investment in the country's flagging oil sector. Colombia produces about 700,000 barrels per day -- small by comparison to the world's major oil powers but critical to Colombia's economy. Oil is the nation's leading export, accounting for about 30 percent of foreign export income, according to a spokesman for Ecopetrol, the state-run oil company.

But unless new large reserves are found, Colombia will soon become a net importer of crude for the first time in its history.

The ELN, Colombia's second-largest rebel group, has publicly claimed responsibility for the attacks. The insurgency said the offensive was in part a response to Plan Colombia, the Pastrana administration's $7.5-billion, U.S.-backed strategy to destroy the cocaine industry and rebuild the economy and society.

In a communique circulated in late August in advance of President Clinton's Aug. 30 trip to Colombia, the group declared: "The (ELN) rejects Plan Colombia and will maintain the offensive before and after Aug. 30 against the Cano Limon-Covenas pipeline in protest against North American intervention."

In its statement, the ELN reiterated its historical opposition to what it considers excessive multinational involvement in the oil sector, saying foreign firms were "looting and robbing" petroleum.

But the reasons for the blitz may go further than that, say petroleum and military officials.

According to the general who commands the national army in the area where the line has suffered the most attacks, the bombings could be a show of strength in the midst of fledgling peace initiatives between the ELN and representatives of the government. The ELN has been pushing the government to create a demilitarized sanctuary in north-central Colombia as a prerequisite for formal peace talks -- similar to the demands made by the larger Revolutionary Armed Forces of Colombia, or FARC, which was given a Switzerland-sized safe zone and is locked in slow-moving peace talks with the government.

Gen. Luis Fernando Barbosa pointed out that the ELN has coupled its pipeline attacks with a dynamiting campaign against the country's electricity towers, as well as road blockades.

"It's absurd that they are meeting with diplomats, talking about peace, and at the same time destroying the country," Barbosa, commander of the 18th Brigade in Arauca state, said during a recent interview.

A spokesman at Occidental's headquarters in Los Angeles insisted that the wave of attacks has hurt Colombia much more than it has the multinational firm.

"It will not have a material financial impact on Occidental," said Lawrence Meriage, Occidental's vice president for communication and public affairs. "About 85 cents on every dollar (earned on crude) goes to the Colombian community" through royalties, state take and taxes.

According to Alberto Calderon, president of Ecopetrol, the country is losing more than $900,000 per day due to the interruptions on the 420-mile-long line.

The pipeline is extremely vulnerable to attacks. It mostly runs above ground through sparsely populated countryside in areas with high rebel presence and weak government control.

Despite a "very good effort" on the military's part to ensure the safety of multinational oil contractors in Colombia, the guerrillas are able to cripple the nation's pipelines just about any time they want, said Martinez of the Colombian Petroleum Association.

"All it takes is two guys to come along, put a bomb underneath the pipe, and that's it!" The solution, he said, is peace negotiations and a cease-fire.