HomeNewsBriefOngoing Guerrilla Attacks Cost Colombia Oil Sector Hundreds of Millions of Dollars
BRIEF

Ongoing Guerrilla Attacks Cost Colombia Oil Sector Hundreds of Millions of Dollars

COLOMBIA / 7 JUL 2014 BY JAMES BARGENT EN

Attacks on Colombia's oil infrastructure have cost the sector well over $400 million so far this year, as guerrilla groups remind the government they can still strike where it hurts and prompt oil companies to consider that it would be cheaper to meet extortion demands.

According to the Colombian Petrol Association (ACP), there have been 64 attacks on oil infrastructure so far in 2014, costing the industry $460 million in lost sales and profits, and repair costs, reported El Pais. The figure does not include money spent on recovering oil and environmental cleanup operations following attacks.

According to Colombia's Minister for Mines and Energy, Amylkar Acosta, the government successfully foiled another 64 attacks over the same period thanks to the presence of 94 military platoons dedicated to guarding infrastructure combined with the use of surveillance drones.

InSight Crime Analysis

The oil industry is seen as a soft target by Colombia's leftist rebel groups, and an easy and effective way to exert pressure on the government while also boosting their ideological credentials by taking on foreign companies seen as exploitative by many on the political left. The Revolutionary Armed Forces of Colombia (FARC) are currently engaged in peace talks with the government in Havana, Cuba, while the second rebel group, the National Liberation Army (ELN), has been promised a seat at negotiations.

Guerrilla cells can easily launch damaging hit and run attacks on infrastructure, which not only have a high financial cost but also damage Colombia's international image as an investment destination for the extractive industries -- a key strategic sector for the government's economic policies.

This ability to inflict considerable damage on the Colombian economy and image has strengthened the hand of both the FARC and their smaller cousins of the ELN, even as they have lost the military capacity to take on army units in traditional guerrilla attacks.

SEE ALSO: FARC, Peace and Criminalization

However, targeting the oil sector also has a revenue raising objective for the rebels. As ACP's figures show, the cost of the attacks runs into the hundreds of millions of dollars so for oil companies it can be cheaper and easier to pay the guerrillas off. Sources inside the FARC have told InSight Crime that some international oil companies have already opted for this route and are meeting rebel extortion demands.

Although the figures recently reported suggests 2014 is on course to see substantially lower numbers of attacks than 2013, there are few signs that peace talks now underway with both groups will prompt the rebels to abandon this tactic. Whether the attacks have military, political or criminal motivations they look set to be a prominent feature of the guerrillas' tactics throughout negotiations.

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