Economy of Colombia - Mining and Energy

Mining and Energy

Colombia is well-endowed with minerals and energy resources. It has the largest coal reserves in Latin America, and is second to Brazil in hydroelectric potential. Estimates of petroleum reserves in 1995 were 3.1 billion barrels (490,000,000 m3). It also possesses significant amounts of nickel, gold, silver, platinum, and emeralds.

The discovery of 2 billion barrels (320,000,000 m3) of high-quality oil at the Cusiana and Cupiagua fields, about 200 kilometres (120 mi) east of Bogotá, has enabled Colombia to become a net oil exporter since 1986. The Transandino pipeline transports oil from Orito in the Department of Putumayo to the Pacific port of Tumaco in the Department of Nariño. Total crude oil production averages 620 thousand barrels per day (99,000 m3/d); about 184 thousand barrels per day (29,300 m3/d) is exported. The Pastrana government has significantly liberalized its petroleum investment policies, leading to an increase in exploration activity. Refining capacity cannot satisfy domestic demand, so some refined products, especially gasoline, must be imported. Plans for the construction of a new refinery are under development.

While Colombia has vast hydroelectric potential, a prolonged drought in 1992 forced severe electricity rationing throughout the country until mid-1993. The consequences of the drought on electricity-generating capacity caused the government to commission the construction or upgrading of 10 thermoelectric power plants. Half will be coal-fired, and half will be fired by natural gas. The government also has begun awarding bids for the construction of a natural gas pipeline system that will extend from the country's extensive gas fields to its major population centers. Plans call for this project to make natural gas available to millions of Colombian households by the middle of the next decade.

As of 2004, Colombia has become a net energy exporter, exporting electricity to Ecuador and developing connections to Peru, Venezuela and Panama to export to those markets as well. The Trans-Caribbean pipeline connecting western Venezuela to Panama through Colombia is also under construction, thanks to cooperation between presidents Álvaro Uribe of Colombia, Martín Torrijos of Panama and Hugo Chávez of Venezuela.