Colombia's oil sector will weather price slump

Subject

The Colombian oil sector.

Significance

Colombia's oil industry has been a success story, with crude oil production running at close to 1 million barrels per day (b/d) and playing an important part in the country's economy. However, that very success and its positive economic impact is now creating real challenges for the country, following the precipitate fall in the global oil price.

Impacts

• As the transition to peace reduces pipeline vulnerability, infrastructure investment may increase.
• Improved refining capacity will reduce Colombia's reliance on diesel and petrol imports, and may enable higher-value exports.
• An extended period of low oil prices could encourage more diversification and investment in other sectors.