Petroleum industry in Colombia
The petroleum industry in Colombia is an important contributor to the country's economy.
Oil
Colombia became an oil exporter in the mid-1980s and has remained that, as a result of policy changes made in 2003. Colombia exports about half of its production, most of it to the United States. Although the share of oil in gross domestic product (GDP) has remained between 2 and 4 percent since 1990, its share of total Colombian exports has been between 20 and 30 percent since 1995, and it has generated important revenues for the nation's public finances. In 2006 oil and derivatives accounted for 26 percent of total exports (18.6 percent for oil and 7.4 percent for derivatives). Oil is particularly important because of its fiscal implications, which cut across several dimensions.[1]
The state-owned
Since 1974 Colombia has applied a system of association contracts, in which the profits from oil exploration are divided in half between the national government and private investors, both national and foreign. Within that framework, Colombia's oil production increased significantly in 1986, when the
In 1999 this loss of private investors' interest led to a reduction in the share of the income accrued by the state, from 50 percent to 30 percent of the total oil income. In 2000 the government modified the royalties system, with variable coefficients based on output and ranging from 5 percent to 25 percent. Although the tax system changed to encourage exploration, private-sector investment has been slow to rebound, among other reasons because the oil sector has been a direct target of insurgent groups. Although no new major discoveries have been announced and no new capacity was expected to be produced before 2010, oil production increased in 2008.[1]
The outlook for the oil supply is complex (as of 2010) because of the trend of decreasing oil reserves and the sharp increase in international oil prices in 2008. The government was considering a variety of options to ensure an appropriate supply of energy for the nation as a whole. In 2003 important changes in oil policy were introduced that led to an increase in exploration, production, and reserves of oil and gas. Among those changes is the separation of state roles: Ecopetrol assumed a role as an operator with greater autonomy and more ability to compete. The new National Hydrocarbons Agency (Agencia Nacional de Hidrocarburos, ANH) became a resource administrator. A contingency tax should give the government a share of profits when prices of oil are higher than a given threshold price. Compressed natural gas, biodiesel, and ethanol are also being promoted as options to increase the nation's domestic supply of energy resources.[1]
In 2007 Ecopetrol began a public stock offering in order to finance its growth, increase accountability, and improve its capacity to compete with other oil companies. In the initial sale of 10.1 percent of the firm, almost 500,000 Colombian investors bought shares in the company, which was listed on the Colombian stock exchange that same year and is expected to sell an additional 9.9 percent of its shares before the end of the decade. As Colombia's largest firm, Ecopetrol should provide a significant boost to the overall level of transactions on the Colombian stock exchange.[1]
The
Refining capacity cannot satisfy domestic demand, so some refined products, especially gasoline, must be imported. Plans for the construction of new refineries are under development.[citation needed]
Natural gas
Colombia's production of
The Trans-Caribbean pipeline connecting western Venezuela to Colombia was inaugurated in October 2007.[3]
See also
References
- ^ a b c d e f g Roberto Steiner and Hernán Vallejo. "Mining and energy". In Colombia: A Country Study (Rex A. Hudson, ed.). Library of Congress Federal Research Division (2010). This article incorporates text from this source, which is in the public domain.
- ^ "BOST project". UNCO United Refineries. Retrieved 2008-06-08.
- ^ "Colombia gas-links with Venezuela and joins Bank of the South".