Labor protests against Pacific Rubiales Energy Corp. ended Wednesday with a tentative agreement brokered by the government between the company and workers.
The deal puts an end to a labor protest against Toronto-based Pacific Rubiales that turned into bloody clashes between workers and riot police, the latest episode in a series of labor conflicts that could derail a surge in Colombian oil output.
As the protests on Tuesday turned violent and erupted into clashes with police forces, the company was forced to halt output at its Rubiales and Quifa oil fields, which together represent nearly a quarter of Colombia’s 953,000 barrels a day in total oil production.
The government stepped in to mediate talks between the company and the protesters, while the police secured the oil fields. Late Wednesday a deal was brokered by the government, with the workers agreeing to end the protests while negotiations with the firm continued.
A company official said Pacific Rubiales would restart production immediately, although it may take three days for the firm to return to full output.
The protest pushed Pacific Rubiales late Tuesday to declare a “force majeure” on its oil shipments, allowing the firm to break the conditions of its supply agreements because of factors beyond its control. The company said it would end the “force majeure” declaration on Thursday.
Although it mediated the talks, the government condemned the protests. “These violent actions are unacceptable for the government,” Deputy Interior Minister Aurelio Iragorri said Wednesday.
The halt in output also hurt state-run oil firm Ecopetrol SA, which receives a large share of the oil pumped by Pacific Rubiales.
Tuesday’s protests were the latest in series of clashes between oil firms and labor unions that have prompted brief halts in production. Earlier this month, disgruntled workers placed roadblocks that forced Petrominerales Ltd., another Canadian oil firm, to close its operations for nearly a week, stopping production of 30,000 barrels a day.
The impact of the protests against Rubiales is likely to be much greater for Colombia’s overall oil production. Nearly 225,000 barrels of oil a day have been shut in because of the protests. If other clashes erupt, it could slow Colombia’s advance toward its target of 1 million barrels a day this year.
“These protests will definitely affect the country’s production figures for this month,” said Alejandro Martinez, president of the Colombian Oil Association. Oil production in August stood at 953,000 barrels per day, a 21% increase from a year earlier.
The protests are usually geared at demanding more jobs for local residents and better working conditions.
The oil firms say many of the protesters are employed by contractors and have no direct links to the oil companies. Additionally, some oil executives maintain that the protests are used to galvanize support for local political campaigns ahead of regional elections in October.
“These protests have nothing to do with working conditions on the ground,” said Pacific Rubiales Chief Executive Ronald Pantin in a phone interview. “The motivations are purely political.”
Tarcisio Mora, the president of Colombia’s largest union, which has been leading the protests, disputed the suggestion that the demonstrations are related to next month’s elections. “What we want are better contracts for our workers,” he said.
Mora conceded the protesters are employed by contractors, but contended that Rubiales still needed to be held accountable for their working conditions and labor contracts. He warned that protests against Rubiales or other oil firms could resume if workers’ demands aren’t met.
Colombia has posted a dramatic surge in output in recent years as a result of improved security in areas that were once dominated by Marxist insurgents. Rubiales is a prime example of the recent success of Colombia’s efforts to increase production.
Eight years ago, the country’s oil industry was near a standstill, with output around half of today’s level because oil fields such as Rubiales’s were too risky to operate. They were often surrounded by insurgents from the Revolutionary Armed Forces of Colombia, Latin America’s oldest and largest guerrilla group, also known as FARC.
A military offensive started in 2002 by then-President Alvaro Uribe, helped secure much of the countryside, driving the FARC deep into the mountains. Pacific Rubiales was one of the first companies to take advantage of the improved security.
The company, led by Venezuelan oil executives, secured control of the Rubiales field in 2007 and brought in technical expertise that was missing in Colombia for extracting its goopy, sulfur-laden crude.