Colombia’s government said it’s doing its best to invest in the exploration of oil and mining. Since 2010, about $20 billion in oil and mining royalties have been pumped into the Colombian economy. CCTV’s Michelle Begue reported on what’s ahead.
Colombia's coal production could hit record high in 2015, hurt economyColombia's government said it's doing its best to invest in the exploration of oil and mining. Since 2010, about $20 billion in oil and mining royalties have been pumped into the Colombian economy. CCTV's Michelle Begue reported on what's ahead.
Colombia’s Ministry of Mining and Energy announced coal production could reach a record high in 2015 with the extraction of 100 million tons, which is five percent more than projected last year. Officials said the increase will only come if projected infrastructure projects were completed along with other investments.
However, one economist said the potential growth will benefit few and produce little employment in Colombia.
“This economic profile is not beneficial, because the mining and oil services sector are much less productive than the agriculture and industrial sectors. Instead, it makes the economy unstable,” economist Eduardo Sarmiento said.
Colombia’s economy, which was heavily dependent on hydrocarbons and mining, could take a hit with a global surplus in coal and a large drop in crude oil prices.
The country’s finance ministry said declining revenue from oil, which was Colombia’s biggest export, has not only been affected by the fall in prices, but also by rebel attacks on infrastructure.
The head of one oil association said the future of energy projects in the country depended on more internal than external obstacles, such as long waits for environmental licenses, community approval, and security issues.
“If we can change those three elements that we can control, not the international market, we can makes things better for investors, but also make our work more effective and competitive,” Ruben Dario Lizarralde, the minister of Agriculture and Rural Development of Colombia, said.
But falling global crude prices were having an impact. Last week, Colombia’s state-run oil company Ecopetrol announced it was evaluating whether to delay investments in some projects after another drop.
However, Lizarralde said exploration was needed more than ever as Colombia’s current oil reserves were only estimated to last another six years. “There is no reason why investments in exploration and industrialization should lessen. If that happened, it would be a grave mistake,” he said.
Colombian President Juan Manuel Santos said the search for alternative energy production would continue in the coming year including the controversial drilling technique known as fracking.