Attempting a comeback

Colombia's new investment terms are attracting renewed attention from foreign investors, but output will continue to decline in the near term until fresh exploration yields new discoveries, writes Robert Olson

AT A TIME when energy liberalisation has stalled or is even being reversed in other parts of Latin America, Colombia's decision to slash petroleum taxes and curb its regulation of the sector has come as a pleasant surprise to investors in the region. There is a widespread belief that Colombia's under-explored territory must hold more major new fields. Yet a dearth of large discoveries and surprising decline rates at some older fields point towards the country becoming a net oil importer by the end of the decade. The loss of oil export earnings, which are Colombia's largest source of foreign exchange, would have a devastating impact on the country's balance of payments and threaten the stabil