A long-awaited peace deal between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC) has been sealed by President Juan Manuel Santos and FARC official Timoleon Jimenes.
The deal will hopefully put an end to a decades-long and bloody conflict in the country, which is very good news for Colombia’s troubled oil industry.
The country has been at a disadvantage to local and international rivals because of its rough terrain and limited reserves, and foreign investment has been hard to come by, not least because of the guerilla activity of FARC.
Recently, the head of Colombia’s oil industry association Jose Lloreda said that the business needs some US$70 billion in fresh funding to survive over the next decade. Now, with the peace deal, getting at least part of this amount seem much more likely.
According to the EIA, Colombia has 600 million barrels of recoverable tight oil reserves and 54.7 trillion cubic feet of recoverable shale gas reserves.
The Marxist organization, acting on inspiration from the Cuban revolution, has been for five decades seeking to redistribute the wealth of Colombians to the benefit of poorer ones. At least that was its original purpose. Over time, FARC guerillas got involved with the drug trade in the country. The conflict, which was resolved with the help of billions of dollars in counterinsurgency funding from Washington, led to the death of almost a quarter of a million people, leaving another five million displaced.
Now that the peace deal has been agreed, FARC will lay down their arms and start reincorporating into Colombian society. Training programs will be provided by the government to this end. There is also the question of repatriation for the families of victims of the war, land reform, and the trial of people who are suspected of abusing human rights.
FARC itself is considering a transformation into a political party and competing for seats in the Colombian parliament.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.