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A Colombian pipeline damaged by terrorists. (Photo: Colombia's Energy and Mines Ministry)
Wednesday, June 11, 2014
Perspectives

FARC Attacks Setback for Colombia Oil

Recent attacks against the Caño Limon-Coveñas pipeline cut the daily production by 7 percent, a setback as Colombia seeks to increase its oil exports.

 

BY LATIN AMERICA ADVISOR
Inter-American Dialogue 

 

There were 259 attacks on oil pipeline infrastructure in Colombia last year, the highest figure in a decade, according to Defense Ministry data. Who has been behind the attacks, and what factors are driving them? How have they affected the country's oil output? Will the situation get worse or better? What should be done to improve the security situation for Colombia's energy sector? 


Christina L. Madden, director at the Council on Global Security and Governance: 
The success of Colombia's oil industry in recent years has made it a target of attacks by the country's two largest rebel groups, the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN). While the stated motive of both leftist groups is to broaden citizens' access to natural resource royalties, the attacks point toward the rebel groups' desperate attempts to maintain leverage during ongoing peace negotiations. For the ELN, the attacks and kidnappings are a way to demonstrate that it poses a serious enough threat to be included in the negotiations. In the case of the FARC, the attacks also signify a change in the group's tactics following a series of high-level losses in recent years and the appointment of a new commander, Timochenko. It is worth noting that the FARC and ELN are not the only actors taking issue with the country's oil and gas boom. Following a rebel attack on the Caño Limón-Coveñas pipeline in March, delays were caused to the pipeline repairs when the indigenous U'wa community blocked access to the site, demanding the pipeline be rerouted away from their territory and that a nearby gas exploration project be halted due to environmental concerns. Security issues and social unrest have led to short-term production interruptions, increased transportation costs and waning investor confidence. Shares of several local energy companies are down, and Colombia's overall oil output fell to an average 935,000 barrels per day in April, the lowest level since August 2012 and well below the record of 1.12 million barrels per day reached last November. The current situation, however, has not yet affected long-term forecasts for the country's economic growth or oil projections. Rebel attacks have historically been more frequent leading up to an election, and the severity of the attacks on Colombia's energy sector may diminish after the upcoming presidential election and the conclusion of peace negotiations.

Maria Velez de Berliner, president of Latin Intelligence Corporation: About 68,000 members of Colombia's army protect the oil sector, from generation, highways, bridges and refineries through transmission lines and port facilities. Tank trucks travel with military convoys. However, the energy infrastructure is not immune to attacks by 'bacrims' (bandas criminales), factional groups of the FARC and the ELN (historic saboteurs of the oil industry) and sundry criminals. Territorial control, extortion, kidnappings, contraband and 'political messages' drive these groups. The attacks earlier this year against state-owned Ecopetrol's Caño Limón-Coveñas and Transandino pipelines accrued significant losses. The key to solving the sector's current insecurity lies in the presidential elections through the political appointees the new president names to head the National Hydrocarbons Agency (NHA), Ecopetrol and its board of directors, and the incentives and guarantees the new administration gives to foreign investors. Seeking re-election, President Santos focuses on peace, economic participation and equity, and countrywide stability. Senator-elect Álvaro Uribe's opposition candidate supports military solutions, not a peace process. Having created the NHA, Uribe is likely to insist on applied-force solutions to stem the attacks and work interruptions in the energy sector, and guarantee military-backed security to investors. Were Santos to prevail and secure a peace agreement with the FARC, there is little sentiment among Colombians to support ratification of an agreement whose conditions have been opaque. This will weaken Santos and hinder his appointments to the NHA and Ecopetrol and its energy regime amid formidable opposition led by Uribe in Congress. If Uribe's candidate, Óscar Iván Zuluaga, succeeds, stability might come to the energy sector at the barrel of a gun. However, the FARC, its remnants, and the bacrims will continue to harm the sector, as they are doing despite the thousands of rounds of ammunition used against them.

 

Jack Devine, president, and Amanda Mattingly, director for Latin America, at The Arkin Group: Attacks on the Colombian pipeline system by FARC rebels over the last year speak to the ongoing struggle of the FARC insurgency in the country. Though the rebel group is said to be at its weakest point in decades and has been in peace talks with the government since 2012, it continues to use tactics such as the oil pipeline attacks as a way to apply pressure on the state and remain a threat. The rebels specifically go after state or commercial entities of strategic importance to the Colombian government. Usually, the pipelines are back online within a matter of days, but the losses are adding up, particularly given the growing frequency and severity of such attacks. For example, the recent months-long closure of the Caño Limon-Coveñas pipeline run by the state entity Ecopetrol reportedly cut the daily Colombian production by 7 percent. The government claims that such attacks do not affect output, but it is a setback for Colombia which is seeking to increase its oil exports. Indeed, as Colombia continues to increase its production levels-and neighboring Venezuela continues to decline-the oil and gas sector will become increasingly important to the country in economic and political terms. The Colombian government must begin to ramp up the security around the pipelines, ports and new projects in this sector to ensure that rebel groups can no longer exploit vulnerabilities in the system. Increased coordination among Colombian security forces around the oil and gas sector will be necessary, as well as proper training, equipment and intelligence to help mitigate the risk of further attacks.

Oliver Wack, Colombia analyst at Control Risks in Bogotá: The marked increased in terrorist attacks on energy infrastructure, more than 200 percent since 2011, according to Defense Ministry statistics, is the result of the confluence of several dynamics related to the country's internal conflict. First, it comes as a result of the sustained military offensive against the country's guerrilla groups during the Uribe government (2002-10). In reaction to this offensive, guerrilla groups underwent a shift in their strategy, and military efforts today are focused mainly on staging hit-and-run attacks and the use of 'classic' guerrilla warfare tactics, for example through the use of snipers, ambushes, landmines and improvised explosive devices. Second, it is the result of the FARC's goal of projecting its continuing military relevance as a means of improving its bargaining position at the negotiating table in Havana, while at the same time refraining from staging major attacks with civilian casualties that could turn public opinion further against the group. Infrastructure targets are particularly attractive given that they can be considered low-risk targets that are nearly impossible to protect and don't require much in the way of logistical and financial planning. A likely successful outcome of the peace talks would certainly not lead to an immediate improvement in the security situation. Especially extortion related crimes, which potentially include small-scale terrorist attacks, will likely increase in the period following a peace agreement. However, we expect the situation to improve in the long term as FARC successor groups establish a preliminary order and focus on their core businesses, which include mining and drug trafficking, and ideological reasons for targeting infrastructure subside.

Sergio Torres, consultant at IPD Latin America: Guerrilla groups remain the sole source of pipeline attacks in Colombia. The Ministry of Defense estimates that the FARC is responsible for around 75 percent of all attacks; the ELN has perpetrated the remaining 25 percent. Most of these attacks occur near the Venezuelan and Ecuadorean borders, where guerrilla presence overlaps oil activities. Porous binational borders and insufficient state presence contribute to the problem. Ecopetrol estimates that attacks caused about 3 million barrels of oil production losses in 2013. The FARC has perpetuated assaults in an attempt to increase its negotiating clout during the Havana peace talks. The attacks create media impact and reinforce the perception that the guerilla factions are strong. They disrupt military initiatives against insurgent groups, create public opinion challenges for the government, affect investor confidence and ultimately result in material economic cost to the nation. While the government has invested in technology and significant military resources to protect infrastructure, the integrity of energy assets will not improve until economic development, application of the rule of law and improvements in social indicators are fostered more effectively in rural Colombia. The failure to do so encourages the existence of illegal armed groups and lies at the heart of Colombia's conflict. The longer the state takes to eradicate this situation, the more complex security issues will become. With criminal gangs emerging, the security panorama in Colombia will remain a dynamic, moving target that will continue to affect the energy sector.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor 

 

 

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