Guerrilla Pipeline Attack Forces Colombia to Shut In OilfieldsAndrew Willis and Lucia Kassai
Attack affects about 6 percent of the country’s crude output
Pipeline repair expected to be concluded by Wednesday: union
Colombia, South America’s third-largest oil exporter, shut in production in at least three oilfields after attacks by Marxist guerrillas blew up one of the country’s main outlets to ship crude.
The attack on the Cano Limon-Covenas pipeline, which transports oil to Colombia’s Caribbean coast for export, forced production to be shut at the Cano Limon, Chipiron and Caricare oilfields, according to Humberto Alvarez, an oil workers’ union official who also works in one of the fields. The fields were producing a combined 56,000 barrels daily, or about 6 percent of the country’s output.
Colombia’s second-largest pipeline was attacked in early July and repairs have been dragging on for almost a month because of bad weather and because the Armed Forces need to guarantee security of personnel working on the repairs, Alvarez said. The pipeline is “likely to restart today or tomorrow,” he said Tuesday, allowing fields to ultimately resume production.
The Marxist rebels often attack oil infrastructure as a means of hitting the government’s finances and the nation’s biggest source of export revenue. The current attack was the third this year.
The guerrilla attack has spoiled Colombia’s plans to keep oil output above 900,000 barrels a day until the end of this decade. The country, once a star producer in Latin America, saw oil output fall 12 percent to 888,000 barrels a day in June from a year earlier, according to data to the country’s Mines and Energy Ministry. Production fell due to lower oil prices, Minister German Zapata said.
It’s bad news for exports as well. Ecopetrol, the operator of the Cano Limon pipeline, issued a force majeure, a commercial term to say it won’t be able to meet its contractual obligations to transport crude to the Covenas oil terminal for export.
Brent crude settled at $41.80 a barrel Tuesday on the London-based ICE Futures Europe exchange, down about 20 percent in the past year and around 60 percent in the past two.