ELN Attacks Another Colombian Pipeline As Ceasefire Ceases

Colombia’s Transandino pipeline stopped operating on Sunday after a bomb planted by ELN rebels caused a crude spill into a nearby river, according to a joint announcement by Ecopetrol and the military.

The National Liberation Army (ELN) is reported to be restarting its militancy against state forces and oil infrastructure after the end of a critical ceasefire to facilitate talks that would end 53 years of war.

The bomb on the 306-kilometer pipeline exploded late Saturday in the Narino provice, but has not affected exports so far. Crude production near the Colombian border is also steady despite the attack on the 85,000-bpd line, the government said.

Official estimates say ELN still has the backing of 2,000 fighters, who have killed two police officers and a soldier since January 9. An Ecopetrol contractor repairing damage to the Cano-Limon pipeline has also been missing since Saturday. The military suspects that the ELN was behind the kidnapping, since they were behind the attack as well.

President Juan Manuel Santos recently recalled his negotiating team to Bogota from Quito to revise his regime’s strategy in ending the ELN conflict.

Colombia’s oil and gas industry is in the process of expanding, which makes the new turmoil difficult to swallow for key energy investors. Ecopetrol announced four oil discoveries in Colombia last year. “[These discoveries show] that we are on the right track to our objective of increasing reserves,” Ecopetrol CEO Felipe Bayon said in November.

Usually, twenty percent of government revenues come from the exploration, production, and taxation of petroleum products in the country, but three years of low oil prices have lowered that proportion to almost zero. Colombia’s oil and gas is difficult to extract, and it trades at a significant discount to Brent. Ecopetrol and foreign field operators need prices to be higher than $50 to turn a profit, which has only been the case over the past three months or so.

By Zainab Calcuttawala for Oilprice.com

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