Oil in Colombia: History, Regulation and Macroeconomic Impact

Juan Echeverry, Jaime Navas, Verónica Navas and María Paula Gómez

No 5428, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: Colombia´s oil history began in 1918 and reached its golden era at the end of the 1980s. Regulation in the oil industry changed several times since 1974, mainly responding to the discoveries made. Although agreed contract terms have been honored for oil fields allocated in the past, regulation instability has affected long term the relationships with private investors, since new conditions were imposed for future contracts. Once too onerous conditions, too low prices and international competition drove investors away from the country, regulation was softened. Recently, the Colombian government has improved contractual terms and made tributary and royalty conditions more attractive to private investors. The important discoveries made in the last two decades led Colombia to an expenditure spiral, paired with a huge fiscal deficit and a high public debt, drastically changing a seven decade long record of fiscal stability.The cycle of cheap-expensive oil has exhibited a full swing, and although exploration contracts and investment have increased, no important discoveries have been made, revealing a complicated geology that might pose a challenge to the country´s hydrocarbons´ self-sufficiency.

Keywords: oil; government policy and regulation; deficit; debt (search for similar items in EconPapers)
JEL-codes: H62 M48 Q32 Q38 (search for similar items in EconPapers)
Pages: 36
Date: 2009-03-12
New Economics Papers: this item is included in nep-dev, nep-ene, nep-his, nep-mac and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://repositorio.uniandes.edu.co/bitstream/handle/1992/8105/dcede2009-10.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000089:005428

Access Statistics for this paper

More papers in Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE Contact information at EDIRC.
Bibliographic data for series maintained by Universidad De Los Andes-Cede ().