“It’s impossible to maintain any longer our current security plan–one that was effective years ago when there were very few oil companies and fields to care for,” the minister said Tuesday. “There are now 130 oil companies out there.”
Very interesting news in Colombia. Lately there has been a spike in energy sector attacks by ELN and FARC. They are successful because they have reduced the size of their attack forces, which then helps them to attack more targets and thin out the government forces assigned to stop them. The ‘few and the many’ from the new rules of war comes to mind. Also, it is very easy for this few and many force to go on the offensive and cause damage. Just look at what MEND was able to accomplish in Nigeria?
“Before there were movements that were more massive,” Gutierrez said. “Now clearly it’s more individuals and cells, which is a different presence from what it used to be.”
Now combine these tactics with a highly dispersed government force trying to cover down on 130 oil companies and all of their infrastructure/people, and you can see why the defense minister would want the oil companies to pay for their own security. To help the government out because there are just too many people and things to protect against such a dispersed force.
Another thing I wanted to mention is that these oil companies need to realize that Colombians are paying for their protection, as they make oodles of money selling that stuff all over the world. That world market for oil will increase if Iran is attacked or nations fall to revolution.
So to me, this is a classic case where the oil industry will fight to keep getting their good deal and ‘free government security’. I say make them pay for their own security so the government’s police and military can focus on serving the people and not just serving oil companies. Just a thought.
Also, these attacks coincide with another big development. Colombia is auctioning off 109 oil blocks to international oil companies. The value of those blocks depend upon how secure they are. Who wants to buy an oil block that is in a dangerous area, which would then equate to more risk and more cost? So security of these sites is crucial to Colombia in order to get more action and attention in these auctions. The FARC and the ELN know this, hence why they are increasing attacks.
But back to private security. Colombia should continue to press the issue of getting PSC’s back in the game there. The companies should be investing in their own security. I compare it to these shipping companies that want the government to pay for all of their security in pirate infested waters, or depending on government to save the day. Hopefully Colombia’s defense minister can press the issue. –Matt
Oil companies in Colombia say security is government’s job
Wednesday, 10 August 2011
Dan Molinski
The head of an association of multinational oil companies operating in Colombia said Wednesday it’s the government’s job, and not that of the companies themselves, to provide security to oil workers and infrastructure against rebel attacks.
“We as a sector understand very clearly that security will be provided exclusively by the state,” Alejandro Martinez, president of the Colombian Oil Association, told Caracol Radio.
Martinez’s comments come one day after Defense Minister Rodrigo Rivera said the sharp growth in Colombia’s oil sector has made it impossible for military and police to adequately protect all oil installations, many of which are located in remote regions near guerrilla strongholds.
The defense minister said oil companies need their own private security forces to help government troops combat a wave of attacks and kidnappings by Marxist rebels that has threatened to derail the oil industry’s four-year growth spurt.
“It’s impossible to maintain any longer our current security plan–one that was effective years ago when there were very few oil companies and fields to care for,” the minister said Tuesday. “There are now 130 oil companies out there.”
But Martinez, whose association members include the local units of Exxon Mobil Corp. and Occidental Petroleum Corp., pointed out that in addition to paying regular taxes like companies in other sectors, the oil industry also has an agreement with the government in which it pays a total 100 billion pesos ($55 million) a year for government troops to provide the necessary security.
He added that the oil companies are currently meeting with the government to resolve the situation.
The debate over who should be providing security against rebel attacks has gained importance in recent months as Colombia’s largest Marxist guerrilla group, the Revolutionary Armed Forces of Colombia, or FARC, has stepped up attacks on the oil sector.
On Sunday, the FARC was blamed for blowing up oil drilling equipment and burning 1,000 barrels of crude at a field near Venezuela operated by Canada’s Alange Energy Corp. Last week, guerrillas set off a roadside bomb that killed an oil worker for a local seismic firm. In June, the FARC kidnapped four Chinese workers for China’s state-owned Sinochem International Corp.
Some 94 million acres of land in Colombia are being used for oil exploration or production, compared with 20 million acres just four years ago. Oil production has also soared during that time, reaching average output of 929,000 barrels a day last month compared with 531,000 barrels a day in 2007.
Story here.—————————————————————–
Ecopetrol Says Oil Output on Target as Rebel Sabotage Rises
By Heather Walsh on March 14, 2012
Ecopetrol SA, Colombia’s largest oil company, expects to meet production targets this year as the government tightens security after an increase in guerrilla sabotage, Chief Executive Officer Javier Gutierrez said.
The company, based in Bogota, plans to produce a daily average of 800,000 barrels of oil and natural gas and add about 400 million barrels of reserves, Gutierrez said yesterday in an interview in the northern Colombian city of Cartagena. More pipeline attacks doesn’t mean rebels regained strength, he said.
“Ten years ago when you talked about attacks on infrastructure, there was a certain level of uncertainty,” he said. “The country has been able to show for a long time that it does have the capacity to guarantee operating conditions.”
Increased strikes by guerrilla groups cut oil production last month in Colombia, which has drawn record international spending on energy and metals reserves from investors including billionaires Carlos Slim and Eike Batista. Sabotage of energy towers, pipelines, roads and bridges rose last year for the first time since 2008, according to government statistics.
The strikes will delay reaching Colombia’s production goal of 1 million barrels of oil a day, said Juan David Pineros, an analyst at Colombia’s largest brokerage Interbolsa SA (INTBOL). In February, output slid 4.8 percent from January to an average of 896,000 barrels a day after attacks restricted oil transport.
‘Pretty Problematic’
“It’s pretty problematic,” Pineros said by telephone from Medellin on March 12. “The guerrillas seek to destabilize things. They go after high impact targets.”
Pineros doesn’t own shares in Ecopetrol. Interbolsa has a sell rating on the stock, saying gains in the shares have outpaced profit growth.
Ecopetrol is working on repairs this week to the Cano Limon Covenas pipeline in eastern Colombia, which guerrillas sabotaged more than a dozen times this year, Gutierrez said.
The line, carrying about 70,000 barrels a day of crude, was attacked in two different sites on March 11 by the Revolutionary Armed Forces of Colombia, or FARC, producing fires and a spill, according to police.
Such attacks are concentrated in the nation’s northeast and show a decrease in the military force of the rebels compared with a decade ago, Gutierrez said.
Individuals, Cells
“Before there were movements that were more massive,” Gutierrez said. “Now clearly it’s more individuals and cells, which is a different presence from what it used to be.”
Gutierrez’s comments contributed to Ecopetrol’s increases today, Nicolas Bernal, an analyst at brokerage Ultrabursatiles SA, said today by telephone. Ecopetrol rose 1.7 percent to 5,390 pesos at 9:27 a.m. in Bogota, extending gains yesterday to the highest level since the company began trading in 2007.
The stock has added 26 percent this year, as of yesterday, compared with an 11 percent gain in Colombia’s benchmark COLCAP index. Ecopetrol is ranked ninth among global oil and gas companies by market value, according to Bloomberg calculations.
The government is making additional investments to guarantee security as rebels act out of “desperation,” Mines and Energy Minister Mauricio Cardenas said yesterday.
A military strike in November killed the FARC’s leader Alfonso Cano. He had replaced the movement’s founder, Manuel Marulanda, known as “Tirofijo,” or “Sureshot” in Spanish, who died of a heart attack in 2008.
‘Ups and Downs’
“Colombia is going to have ups and downs,” said Stephen Johnson, director of the Americas program at the Center for Strategic and International Studies, in a March 8 telephone interview from Washington DC. “The people involved in these movements aren’t going to just say ‘Hey, our latest leader has died and ‘Sureshot’ is gone, so let’s become car salesmen.’”
President Juan Manuel Santos is using investment in energy reserves to fuel his nation’s $288 billion economy. Rising exports of oil and coal helped Colombia garner an investment- grade credit rating last year. The country was raised to Baa3, the lowest investment grade level, from Ba1 by Moody’s Investors Service on May 31. Standard & Poor’s increased Colombia to BBB- in March 2011.
Rising production has made Colombia the third-largest crude producer in South America after Venezuela and Brazil. Production at Ecopetrol rose to 741,700 barrels of oil and natural gas a day last quarter, from 651,300 barrels a year earlier.
Ecopetrol is studying an $8 billion pipeline to carry heavy crude oil from eastern Colombia to the Pacific Ocean, a project that probably will need partners, Gutierrez said. The pipeline may attract investment from China, he said last year.
Ecopetrol also is studying oil blocks to be auctioned this year by Colombia’s government, where the company is in the early stages of exploring for non-conventional fuels, Gutierrez said. Non-conventional fuels include gas extracted from shale. Colombia’s government owns 88.5 percent of Ecopetrol.
Story here.