By Dan Molinski
BOGOTÁ--A protest by U'wa Indians that has shut down Colombia's
second-longest oil pipeline for a month and cost the government
more than $130 million will continue after Friday talks aimed at
ending the standoff failed.
The 480-mile Caño Limón pipeline can transport, to Colombia's
Atlantic coast, up to 220,000 barrels a day of oil, or more than
one-fifth of the country's total daily production. But it hasn't
pumped a drop of oil since March 25, the day the Colombian military
said Marxist rebels blew up a section of the pipeline in the remote
northeastern state of Norte de Santander, near the Venezuelan
border.
The bombing attack happened on land belonging to the U'wa
Indians, a 7,000-member tribe that is as strongly opposed to
exploitation of natural resources through oil exploration and
drilling as the Marxists rebel groups that allegedly attacked the
pipeline. The pipeline is used by state oil company Ecopetrol SA
and California-based Occidental Petroleum Corp.
Following the bombing, more than two dozen members of the
indigenous group, angry over what they say are repeated spills from
the pipeline, surrounded the area where the pipeline was damaged,
and, 30 days later, are yet to allow Ecopetrol workers into the
area to repair it so oil pumping can resume.
With the pipeline turned off, the 72,000-barrel-a-day Caño Limón
field, jointly owned by Occidental and Ecopetrol, has had to shut
down all production because the pipeline is the only way it can
send oil to the coast for export, and the field's storage tanks are
full. Caño Limón's production represents 7% of all oil production
in Colombia, Latin America's fourth-largest producer.
The government has made repeated efforts to resolve the dispute
and get the oil flowing again, and, Friday morning, top officials
traveled from Bogotá to the cloud forest region to meet with some
300 U'wa members.
The meeting didn't go well, said Aura Tegria, an U'wa
spokeswoman.
"The proposals they offered weren't close to what we were
demanding," said Ms. Tegria, who said the tribe is preparing a
formal statement for later Friday. "We will continue to not
authorize the repair of the oil pipe."
A spokesman at Ecopetrol confirmed no deal was reached, adding
that this is the longest period "in many years" that the Caño Limón
pipeline and field have been shut down. Colombian rebels bombed
pipelines 259 times last year, but most of those times the damage
was repaired in a matter of days.
Representatives at Occidental weren't immediately available for
comment.
The administration of Colombian President Juan Manuel Santos is
in peace talks with the top guerrilla group, the Revolutionary
Armed Forces of Colombia, or FARC, and, if a deal is reached, the
rebel fighters would lay down their weapons. But U'wa
representatives said it wasn't the FARC, bur rather Colombia's
second-largest rebel group, the National Liberation Army, or ELN,
that was responsible for the attack on the pipeline in late
March.
The ELN isn't involved in any formal peace talks.
Both Ecopetrol and Occidental have had to declare at least
partial force majeures on some of their oil cargoes out of Colombia
due to the U'wa protest. This removes the companies from legal
obligations to deliver shipments they previously agreed to in a
contract.
While the pipeline was only transporting 72,000 barrels a day of
oil at the time of the attack, it normally carries nearly 200,000
barrels a day, which includes oil coming from another pipeline, the
new Bicentennial pipeline that connects to the Caño Limón in the
state of Arauca.
The Bicentennial pipeline has also been attacked by rebels
several times this year, so oil producers in the Eastern plains
that use the pipeline have had to use tanker trucks or smaller
pipelines to deliver their oil from the fields to the coast.
One of those oil companies, Pacific Rubiales Energy Corp., said,
in a news release Wednesday, that its transportation costs during
the first quarter of this year rose to $2.50 a barrel from $2.00 a
barrel "as a result of the use of additional trucking and alternate
pipeline transportation costs following terrorist attacks on the
Bicentennial pipeline."
Officials at Rubiales weren't immediately available for further
comment.
Write to Dan Molinski at dan.molinski@wsj.com
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