Colombia’s oil boom

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Civil war slowed the development of Colombia’s oil industry. Now Colombia’s oil is flowing again. The government has secured the oil fields, with US help, and encouraged private companies to drill. In just three years, oil production has increased tenfold. John Otis reports. Download MP3

• Colombian guerrilla hails from Netherlands

Read the Transcript
This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN: I’m Marco Werman. This is The World. Oil companies have long known that there’s oil to be found in Colombia. But for many years, it wasn’t safe to look for oil there. Marxist guerrillas often bombed pipelines and kidnapped workers. Things are changing now. Improved security and better conditions for private companies have led to a nascent oil boom in Colombia as John Otis reports.

JOHN OTIS:  Crude oil mixed with water gushes from a valve at Campo Rubiales, Colombia’s most important oil field. In just three years, oil production here has increased ten-fold. The Rubiales field is operated by Pacific Rubiales Energy. Ronald Pantin, the company CEO says nearly all of his company’s exploratory wells have turned up oil.

RONALD PANTIN:  We have here a very interesting geology with a very high prospectivity. Actually, the company have drilled 48 exploratory wells and 42 has been successful. So that’s huge.

OTIS: Much of Colombia’s 750,000 barrels in daily oil production is exported to the United States. But until recently, many analysts feared Colombia would become an oil importer. Vast tracks of the countryside remained unexplored because they were too dangerous. Marxist guerrillas burned oil trucks, kidnapped workers and demanded extortion payments from oil companies. The Cano Limon pipeline, built by Occidental Petroleum in northern Colombia, was blown up so many times it was nicknamed “the flute.” The Rubiales field was discovered in the 1980s. But Jorge Penaloza, a supervisor who has worked here for seven years, says oil production was constantly sabotaged by the rebels who controlled the area’s lucrative cocaine trade.

SPANISH SPEAKING

OTIS: The guerrillas burned down the camp and the warehouse and forced all the workers to flee, Penaloza says. They told everyone to leave or face the consequences. The field was abandoned. But with the help of billions in US aid, the Colombian Army began pushing the guerrillas out of oil-producing areas. In 2004, the army installed a military base at the Rubiales field. There’s even an Armed Forces radio station here, where DJs urge guerrilla fighters to desert. Improved business conditions also helped Colombia’s oil industry rebound. Today, the Rubiales field buzzes with activity. 6,500 people work and live here turning this remote patch of Colombia into a small city. There are roads, restaurants, dormitories, schools and churches. Workers build everything from pipelines and waste disposal sites to a new airport terminal. They pull twelve-hour shifts as they prepare to expand daily production from 125,000 barrels to 300,000 by the end of next year. The success of Rubiales is one reason the Colombian government predicts the country’s daily oil production will double in the next eight years to 1.5 million barrels. That would make Colombia one of the top 25 producer nations. Rather than rebel violence the government is now worried about more common business issues. A massive influx of petro-dollars, for example, could strengthen the Colombian peso to the point where the country’s other exports become less competitive. But the oil bonanza also means more royalties, some of which are distributed to poor communities. And it means more jobs for people like Jorge Penaloza, the supervisor at Rubiales who began as an unskilled laborer back when the guerrillas held sway.

SPANISH SPEAKING

OTIS: Thank God, we persisted, Penaloza says. And now we work for the biggest oil company in the biggest oil field in Colombia. For The World, I’m John Otis, Campo Rubiales, Colombia.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.