October 9, 2019 / 5:33 PM / 5 days ago

Protests, red tape have frozen $700 million in Colombia oil investment: industry group

BOGOTA (Reuters) - Some $700 million in investment spending by oil companies operating in Colombia is frozen because of contract delays caused by community protests and consultations, slow environmental licensing and court orders, the Colombia Petroleum Association (ACP), an industry group, said on Wednesday.

The figure is part of the $4.95 billion the group said companies planned to invest this year, as the Andean country seeks to increase its oil and gas reserves after years of industry stagnation.

Some 50 projects are currently delayed, ACP head Francisco Lloreda told journalists. Of the stymied projects, 32% are halted because of disagreements with local communities, 22% due to delayed environmental permissions, another 22% because of security issues, 16% because of court rulings and the remaining 8% due to prior consultations procedures with nearby residents.

Though the sector is beginning to reactivate, delays have kept it from reaching expected levels of expansion, Lloreda said.

“The ACP proposes complementary measures to increase exploration, related to attending to the risks that affect the competitiveness of the country, issuing economic and contractual incentives in both free and contracted areas and speeding up permissions,” he said.

The association is looking at each case individually in hopes of helping companies move them forward, he said.

Thirty oil wells have been drilled so far this year, the association said, a figure that will likely reach 48 by the end of 2019, the same as the number drilled last year.

“If we could return to exploration levels like the ones registered in 2012, we could increase the fiscal income provided by the sector by 30%,” Lloreda added.

Though a 2016 peace deal with leftist rebels improved security in Colombia, the oil sector continues to be hit by blockades, protests, legal uncertainty, crude theft and pipeline bombings.

Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Julia Symmes Cobb and Steve Orlofsky

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