Colombia
Legal reforms to allow privatization of Colombian energy resources are underway. Colombia's
government, noting the importance of oil exports, is taking steps to improve the attractiveness of
oil and gas exploration and development to foreign investors. The first step was the elimination
of a hydrocarbon production tax. Previously, Colombia had one of the highest rates of petroleum
taxation in the world {see Endnote 71}. Recent changes in its
tax laws have reduced both some loopholes and some fees on investment in the hope of enticing
more foreign investment the oil and gas
remittance tax {see Endnote 72} may be reduced to 7
percent,
which is the rate charged other Colombian industries {see Endnote
73}.
The most significant energy privatization contemplated is the sale of the state's 50-percent share
of the Carrejon coal mine. However, reports of privatization of some or all of the state oil
company Ecopetrol, the 40th-largest producer of petroleum and 57th-largest refiner in the world,
have been denied by the country's energy minister {see Endnote
74}.
Recent privatization efforts created numerous new foreign investment opportunities in Colombia.
British Petroleum discovered 2 billion barrels of proved reserves in the Cusiana and Cupiagua oil
fields, which will be developed by a joint venture with Triton Energy (United States), Total
(France), and Ecopetrol. This joint venture also will spend $2 billion upgrading Colombia's
pipelines to transport the additional production. Another joint venture, which includes Ecopetrol,
British Petroleum, Total, Triton Energy, and others, will build an oil export pipeline from the
Cusiana Field. British Petroleum also purchased Maxus' 53-percent share of a block adjacent to
the Cusiana Field, augmenting the 10-percent share it already held.
Recent foreign company activity in Colombia's petroleum industry include the following:
- Amoco's Colombian subsidiary has obtained a 60 percent interest in a 45-million cubic feet
natural gas field and plans to drill a second well in this field during 1995. Chevron and Exxon also
have ongoing petroleum exploration and development operations.
- Enron and Ecopetrol have a joint venture to develop a 200-megawatt oil-fired electricity
generating plant. Enron also leads a consortium that will build, own, and operate a 200-megawatt
cogeneration plant in Cali.
- Exxon has a 50-percent share in the soon-to- be-privatized Carrejon coal mine.
- Conversely, Texaco reduced its Colombian heavy oil production by selling five heavy oil fields
during 1994. Texaco plans to expand its natural gas operations in Colombia through the addition
of a second offshore platform during 1996 and plans to engage in new exploration in the Middle
Magdalena Valley.