Colombia’s Deteriorating Security Outlook Could Impair Ronda Colombia’s Outcome

Colombia’s security environment is swiftly deteriorating as the Colombian government aggressively offers more than a hundred oil and gas exploration and production blocks in the Ronda Colombia 2012 bidding process. Oil and gas exploration is a key driver of the Colombian government’s revenue. A deteriorating security outlook could disincentive investors interested in bidding for the blocks offered in in key areas such as the Caguán-Putumayo basin.

Left-wing guerrillas have wreaked havoc in Bogotá, Caquetá, Guajira, Putumayo, and more recently in Cauca (where indigenous groups have strongly opposed the presence of armed groups). Analysts are divided about what is causing the Fuerzas Armadas Revolucionarias (FARC) and, to a lesser extent, the Ejercito de Liberación Nacional’s (ELN) recent blows to the Colombian Army, the Police force, and the country’s infrastructure. Some analysts believe this upsurge in guerrilla attacks is a defensive strategy amid the heavy military pressure of the Colombian state on areas where the guerrillas have historically been strongest, such as Caquetá in the case of the FARC. Other analysts, however, argue the uptick in guerrilla activity is the result of the government’s lack of military initiative and of the government’s military fatigue. Regardless of the cause, an emboldened guerrilla does not bode well for the outcome of the Ronda Colombia 2012, a bidding round of over a hundred exploration and production blocks in mature areas, new frontier basins, and areas with little geological knowledge.

The FARC and ELN guerrillas each have affected key oil infrastructure like the Caño-Limón and Oleoducto Transandino pipelines, which bring hydrocarbons to market through ports in the Atlantic and the Pacific coast, respectively. The rebels have also targeted railways transporting coal mined in the departments of La Guajira and Cesar. These attacks have not only affected production targets, but they are now forcing key players to re-evaluate their investment decisions. Gran Tierra Energy (GTE:CN), with assets in the rugged Caguán -Putumayo basin in southwestern Colombia, cut its capital expenditure budget by 14 percent for the remaining of this year in response to production constraints resulting from the guerrilla’s attacks on oil infrastructure. If decisions like this one are any indicator of what investor offers in the Caguán-Putumayo basin would look like, Colombian officials must be starting to feel strong shivers down their spines.  Continue reading

Romeo Langlois Releases Video, Colombian Conflict Reality and Military Slip-UP

On June 20, 2012, French reporter Romeo Langlois released the shocking video of the FARC guerrillas’ ambush of the Colombian Army unit he was embedded with last month. The FARC retained Langlois for a month, after he turned himself into the terrorist group to save his life. The army unit was raiding cocaine labs located in two different areas of Caquetá, in southeastern Colombia. This video not only provides evidence of the reality of the Colombian conflict, but also proves the inexistence of a protocol regarding embedded reporters in Colombia.

The video is shocking. Langlois shares a few hours of his life accompanying Colombian Army men carrying out a routine, yet risky operation. In the video, Continue reading

May in Colombia: Juan Manuel Santos’ Most Difficult Month

What does a good month in Colombia look like? Well, the opposite of what we saw this past May. The Colombian government wanted ongoing investor confidence to remind everyone about the country’s progress, but an attack against a conservative former minister, and the capture of a French journalist by the leftwing FARC guerrillas revealed the contrary. In Colombia, security remains a weak spot. Colombia is on a positive path, but its government should not be too confident about the country’s success

Colombia has made progress on its security and economic fronts. A stronger police force, a better military, and more effective, yet still subpar government institutions have combined to wage an effective war against left-wing guerrillas, right-wing paramilitaries, and drug-trafficking organizations. Although much still needs to be done, Colombia is no longer seen as a failed state. But, illegal groups still have a presence in remote and strategic areas of the country.

Improved security and a well-managed economy are the anchors of an average GDP growth rate of over 4 percent in the last decade, compared to a regional 3.4 percent. Foreign direct investment (FDI) has soared, reaching $13 billion in 2011. Close to 40% of these flows went to the oil industry as a result of improved control over the territory, a successful oil sector reform, and high commodity prices. Against this backdrop, throughout the month of May, Colombia wanted to celebrate ongoing investor confidence and the taking off of the long awaited U.S.-Colombia trade agreement.

Indeed, last month the Santos administration organized several events to celebrate the U.S.-Colombia trade agreement, the country’s economic stability, and Colombia’s security achievements. On May 15th, the day the trade agreement finally took effect, the port of Continue reading