The National Government, through its National Planning Department published in 2005 the ‘Colombia Bicentenary 2019 Document’. Its goal was to propose meaningful objectives Colombia should reach by 2019, the 200 anniversary of the battle of Boyacá that sealed Colombia´s independence of Spain.
In this proposal, the strategic role of the energy sector was pivotal as to the point that other documents were written in order to trace the path of the “new state policies.” Among these documents are the National Energy Plan 2006-2025, the ‘National Development Plan 2006-2010’ and the ‘Internal Agenda for Competitiveness of the Energy Sector’ and studies like the ‘Formulation of a National Strategy for Energy Supply’ and ‘Design for an Integrated Policy for Energy Prices’.
These documents have traced the two major goals of this strategy.
The first has been to maximize the energy sector’s contribution to the sustainable development of the country through the availability and the full supply of energy resources needed to attend and guarantee domestic demand.
The second has been to transform Colombia into the regional energy cluster through the consolidation of regional integration of energy and the development of an infrastructure that allows achieving this goal.
The private sector would play a vital role within the development of the energy policy’s framework. However, the policy itself has begun through companies where the government has a majority of the stake, such as Interconexión Eléctrica S.A. y Ecopetrol.
The first document to formulate this policy was the National Energy Plan 2003-2020. It stated that was in Colombia´s interests to expand and become the regional energy cluster. The government used its majority stake at ISA in order to implement this policy.
Since 2004, ISA developed a broad role in promoting and strengthening this policy by actively bidding in regional energy tender offers through its subsidiaries in Bolivia, Ecuador and Peru. In 2006, it finally hit its biggest jackpot with the acquisition of Brazil’s Companhia de Transmissão de Energia Elétrica Paulista-Cteep.
In 2008, Cteep won the bidding for the collector transmission line Porto Velho (Rondônia) – Araquara II (São Paulo), which has a strategic importance for Brazil. This project is part of the ‘Acceleration of Infrastructure Growth’ promoted by the Brazilian government and supported by the Brazilian Development Bank.
At the same time, the oil Company Ecopetrol began to proactively participate in the development of a strategy that promotes the achievements of the objectives as outlined in this policy both internally as externally.
Since 2006, the national government, through Ecopetrol, has proactively been promoting investment in the exploration and
production of hydrocarbons, specially oil and coal, within the Colombian territory. Furthermore, the company has been seeking opportunities abroad to expand and consolidate itself as a major player within the region.
Both objectives have been achieved satisfactorily.
First, the foreign investment in the hydrocarbon sector has increased and has benefited exponentially by the investment´s inflow of small and medium-sized oil companies from the U.S. and Canada mainly. The major oil discovery was found at the Rubiales field by the small Canadian oil company Pacific Rubiales. It was the first major achievement in the treacherous oil sector by the government.
Second, Ecopetrol has launched itself in a buying spree taking over companies companies such as Petro Tech, Propilco and the Refinería de Cartagena. Moreover, the company has been participating in association contracts in exploratory fields in Mexico and Brazil, which is potentially beneficial to both securing domestic demand and positioning Colombia as a major regional power. Even though it is a risky move, the benefits will overcome the risks if the company is able to pull out a new oil discovery overseas.
In conclusion, the strategy outlined by the national government five years ago will allow Colombia to play a pivotal economic role in the region. The vision and the strategic development of the conceptual framework clearly demonstrate that this government has a long-term structural approach that the nation can develop itself in a sustainable way to become both a better place for its citizens and a regional power.
Author Luis J.Rodríguez is CEO of e-Bursatil.com.co, a website focused on Colombia’s financial market