Local commercial venders in Puerto Gaitán and Barrancabermeja are warning that already there is a steep drop off in their sales, as much as 80%, with the ability of contractors to pay their debts a rising concern. These and other stories in a weekly roundup following the impact of the fall of oil prices on the Colombian economy.
In a general assembly held last week, USO workers voted to authorize their directors to order a general strike which could affect, among others, Ecopetrol (NYSE:EC).
Like anyone in the oil industry, suppliers to oil services companies are feeling the impact of cost cutting and the fall in the price of oil, and in some cases, are feeling it even worse.
Despite the fall in oil prices companies must not simply “discard workers” and cut “the more fragile half” of the business to reduce costs says the Labor Minister Luis (Lucho) Eduardo Garzón.
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 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 president of the Colombian Petroleum Association Francisco José Lloreda started a round of producing regions with a visit to Yopal, Casanare, where he warned that that the government must take greater measures to address the impact of falling oil prices and the recent tax reform.
Casanare and industry representatives met to discuss the state of a transportation agreement and found positive results, while in Meta the government will invest to pave a stretch of road leading to the Rubiales Field. These and other stories in our periodic roundup of road-related issues.
The drop in the oil price has spurred dramatic cuts in the investment plans of Colombia’s most important operators, but there is a long ripple effect that the price fall has on the communities, junior operators and side projects that go beyond the big headlines. Here is a summary of some of the more relevant stories to emerge over the last week or so.
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