Oil production in Colombia is a popular topic these days. Domestic production levels are at an all time high, and Colombian state-owned oil behemoth Ecopetrol is considering selling 10 percent of its stake in the firm to the public. Dow Jones reports the deal will likely go down in 2012. Silla Vacia has an excellent analysis suggesting that unlike the first public offerings made in 2007, this time shares are significantly overvalued.
The risk of purchasing overvalued shares is not the only one facing investors in Colombia’s growing energy sector. InSight Crime highlights the fact the FARC and other illegally armed groups (ELN, BACRIM, etc.) have begun a campaign to increase attacks on oil workers:
“The FARC has combined the kidnapping of oil workers with an increase in attacks on oil and gas pipelines and energy infrastructure, suggesting that Cano’s policy is designed to undermine the government’s claim that it is now safe to invest in Colombia and thus deter foreign investment, which has been one of the major factors in boosting the economy.”
Compare this strategy – sabotaging oil production for the sake of sending a message – to that used by criminal groups operating in Mexico. According to Mexican Energy Secretary Jose Antonio Meade, cartels tap Pemex (Mexico’s state-owned oil company) to siphon fuel, which the cartels will either sell or use themselves.
Though the means and rationale are different, the ends are the same, and they are disruptive.
From InSight (Colombia):
A slight increase [in kidnappings] was seen in 2010, with 282 cases, and the trend for this year is up another 30 percent, the main driver behind this a sharp increase in rebel abductions, particularly of oil workers.
From Reuters (Mexico):
“Gangs tapping Mexican pipelines stole oil and gas worth almost 70 percent of Pemex’s first-quarter profit in the first four months of this year alone.”
At its core, sabotaging oil production in Colombia has both political and financial motives. Although Alfonso Cano, the leader of the FARC, may push the former in his communications, the latter is more important to the group’s functioning.
The occasional bombings of oil pipelines that have been attributed to the FARC offer proof that the group is interested in disrupting oil production in Colombia; this coincides with the theory that the group is attacking the state for the purpose of attacking the state, thus suggesting the group’s traditional political motives. In Mexico, however, disruption serves a different purpose entirely. Unlike the FARC, Pemex saboteurs want the oil to keep flowing.