Catatumbo, Colombia, is one of the most oil-rich regions in the country, with an estimated 17 million barrels of unexplored oil reserves.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
It is also one of the deadliest conflict zones, and a major coca producing region controlled more by paramilitary narco groups than by the Colombian state.
Even so, as Colombia reels from a COVID-induced recession, the pressure to expand petroleum output and infrastructure in conflict zones like Catatumbo has grown. And many in the government view expanded capacity in the region as an economic necessity.
Colombia confronts an energy crisis, due to dwindling production and reserves, which are projected to be exhausted in 6 years.
Colombia's oil production has fallen from over 1 million b/d in 2013 to roughly 780,000 b/d in 2020. And S&P Global Platts Analytics expects output to continue to decline to below 600,000 b/d by 2031.
Roughly 79% of Colombia's oil production is exported, a critical segment of its GDP, and the government relies heavily on oil revenue for its operating budget.
In Colombia, mineral rights are not owned by private landowners, but rather the state, and in a country where a large percentage of the economy operates informally and taxation is notoriously difficult, that revenue represents a critical part in how the government operates.
Miguel Lotero Robledo, the vice minister of energy, laid out the government's development plan in a recent conference, pointing out that the oil industry currently represents 12% of national earnings, 34% of foreign investment into the Colombian economy, and 56% of all exports. And he argued that development of extraction infrastructure in conflict zones, as well as fracking, is crucial to Colombia climbing out of it's current Covid-induced recession.
But both the government and companies who would develop oil infrastructure in Colombia's conflict zones have faced sabotage, extortion, theft and even attacks from the myriad criminal groups in regions where the government has virtually no state presence.
The local economy has become completely dependent upon the drug trade for economic survival, and with that has come violence, instability and war.
Carmen Rojas Silva, 70, has lived in Catatumbo for over thirty years. She sips coffee in her kitchen in Puerto Lajas, a small riverside agricultural community near the Venezuelan border.
"This house was built without a gram of coca," she says. "Coca has been nothing but a curse to Catatumbo. This house was built by growing Yuca, but still the violence found us."
She said her son was killed by leftist guerrillas amidst displacements here in the late 1990's. One of her grandsons was killed 8 years later by the Colombian military. Both were merely farmers, she said.
The 2016 peace accord, which ended a 50 year civil war with leftist rebel group the Revolutionary Armed Forces of Colombia (FARC by their Spanish initials) was supposed to end endemic violence in the country. The former administration of Juan Manuel Santos promised to invest in basic infrastructure such as roads and electricity in the formerly rebel-controlled areas, as well as offer a path to legality for coca growers and the security to develop economic alternatives to black market economies.
But implementation of the accord has been delayed by current president Iván Duque, who won the election on promises to dismantle aspects of the controversial deal, and whose administration has preferred military to civil solutions.
Meanwhile, in Catatumbo, a host of armed groups have moved in to fill the vacuum left by the FARC, who disarmed and joined the government.
"When the army comes, the guerillas shoot at them, " says Pípe, a coca farmer in Puerto Lajas, who asked that his last name not be published. "Everyone here knows they are the ones that are really in control."
Despite the wealth of oil reserves in the region, only Ecopetrol currently operates in the region. And despite protection provided by the military, it still finds its infrastructure attacked by armed groups, and its pipelines often tapped into by drug traffickers who use the oil for their illicit enterprises.
Ecopetrol has endured so many attacks on their transportation fleet and infrastructure in the region that it has suspended all natural gas extraction over safety concerns.
Coca trade fuels oil consumption
The black market in Catatumbo has created its own appetite for oil consumption. Civilian trucks loaded with barrels of crude pass constantly on the dirt roads that wind through rural Catatumbo. They are transporting raw oil to the coca plantations, thousands of which are plainly visible from the bus routes that crisscross the area.
The oil will be burnt down by farmers and filtered into a crude gasoline to transform their coca leaves into coca paste, the raw material that clandestine laboratories will refine into cocaine.
Andrés Silva is a social worker in Puerto Lajas, a small coca farming community on the Catatumbo River.
"You see all those boats?", he said, pointing at dozens of passing wooden boats loaded down with cargo. "They're carrying oil and gasoline. Some is bought upriver in Colombia, some is stolen by guerillas, but a lot of it comes from Venezuela."
Attracting E&P investment will be critical to boosting Colombia's oil reserves, which fell to 1.82 billion barrels as of Dec. 31, 2020 from 2.04 billion barrels at the end of 2019.
Natural gas reserves have fallen to 2.95 Tcf from 3.16 Tcf over the same period.
Only 5 million barrels were added to reserves in 2020 from new sources, Colombia's energy minister Diego Mesa said in June.
But Colombia is still hoping to lure in investors, and will hold an E&P auction later this year, with bids due by the end of October.
"The government needs to encourage foreign investment to encourage growth, not just in conflict zones, but nationwide, as a question of survival," said Sérgio Guzman, director of Colombia Risk Analysis, a research and consultancy firm in Bogotá. "But until they resolve security issues and truly implement the peace plan in an economic and social sense, rather than purely through military solutions, they will find themselves repeating a cycle of instability that has lasted over half a century."