Incident counts went up again this week (to 38) but that was due to increased Armed Forces activity. As the graph shows, our proxy for guerrilla-initiated activity went down.
Ecopetrol (NYSE:EC) has deeply cut its 2015 Capex and wants to reduce its operational costs by 30% as well, but it will still destine US$200M to offshore development and drilling.
The reaction to the oil price crisis has serious implications for the estimated 120,000 workers in Colombia’s industry, and has received a countering reaction from some of the industry’s most prevalent unions.
The ink is barely dry on the most recent tax reform, and already analysts are suggesting the government will have to take further measures to address the budget deficit in 2016 due to the drop in oil prices.
Ecopetrol has secured a US$1.925B load to focus on its 2015 investment on pipeline development and developing production in its aging fields, while some are questioning the reason if not the need.
The rhetoric aimed at the Colombian Petroleum Institute (ICP) intensified this week with the union responding to accusations from the institute director that it is responsible for sabotage inside the facility.
Royalty spending could be cut by 30-40% due to the fall in prices, while the government insists they have a plan. Meanwhile the impact of the price fall is being felt in producing regions as warnings and speculation grows on job losses. These and other stories in this week’s summary of the impact of the fall in the price of oil.
The governors of Meta, Norte de Santander and Putumayo have signed an agreement called the “Regional Alliance of Hydrocarbons” to promote the social and economic development of these producing regions.
As the impact of the Great Slide in oil prices begins to be felt in the broader Colombian economy, industry associations and think tanks find they have a ready audience with the press. Anyone who can articulate a rational perspective contributes to the debate on the country’s most serious economic issue at the present time.
The last round of the talks with the Farc in Havana came to a close on February 12 so we are in another lull. Time for government negotiators to do their laundry, get reacquainted with their families and deal with other issues on the home front.
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