Caño Limón: From an Oil Field to a Border Military Base

Not only oil springs out of Caño Limón, but also serious labor problems, and geopolitical uneasiness that involved U.S. military forces in Colombia, only a few kilometers from the Venezuelan border.

Not only oil springs out of Caño Limón, but also serious labor problems, and even geopolitical uneasiness. Oscar Cañas Fajardo, an industrial relations technician for the oil industry and advisor of the Central Union of Workers, warns over rapidly increasing military presence in the Colombian side of the Arauca river, with the pretext of protecting the oil pipelines (from Caño Limón) against continual sabotage.

Cañas assures that there are uniformed marines from the U.S. army, as well as war equipment, just a few kilometers from our borders; and accuses the transnational Occidental de Colombia Inc., a transnational oil company, of promoting a labor conflict at all costs with the intention of reducing the number of unionized workers on the payroll. “Occidental de Colombia intends to apply the same plan recently carried out by Ecopetrol, that is, promoting an artificial conflict with its employees, with the purpose of reducing the number of unionized workers on the payroll.”

Cañas comments that the oil industry labor union USO presented a set of petitions which, more than just a project of collective contracting “is a list of social benefits that represents less than 0.8% of their earnings. And this company is not really interested in discussing these issues. Its intention is to go beyond that.”

Commercial oil extraction in Caño Limón started in 1983. But the extraction of hydrocarbons had started in Colombia in 1905, upon the granting by the Colombian state of the Mares de Barranca Bermeja concession. The first transnational company, the Tropical Oil Company arrived in 1916. The USO was created in 1923; and in 1924, the first oil strike broke out. Nevertheless, this workers union had to wait 10 years to be officially acknowledged.

There are 264 wells under operation, with a yield of 98,000 barrels per day. Each barrel is enough to produce 21 gallons of gasoline, 4 of kerosene, 2 of asphalt, 1 of petrochemical derivatives, lubricants, fuel oil and motor fuel.

Under a contract named Cravo Norte, Occidental de Colombia and Ecopetrol participated in the activities in the Caño Limón field under the form of associations. The associations were 40 % for the U.S. company, 40 % for the Colombian state company, and 20% for the state. Participation was structured through royalties. At the same time, the state participation was also distributed: 47% for the regional government, 32% for the National Royalty Fund, 12% for the municipality, and 8% for the municipality of the port where the production is shipped.

But this contract, which stipulated that the field, as well as the infrastructure, would be turned over to the Colombian state upon its expiration in 2008, was modified last year with the signature of a new agreement called Chipirol agreement.

“And not only was the participation structure altered in that contract. At this moment, Occidental de Colombia owns 70% of the property against 30% owned by Colombia. The worst part is that the reservoir has been granted for good. But furthermore, after a negotiation by the National Hydrocarbon Agency, royalty payments were reduced to from 20% to only 8%, which means we are walking a in a direction that is totally opposite to the trend followed by Venezuela, which increased royalty payments from 1% to 16 2/3 %.”

Oil field, military base

Cañas reassures his warning: “there is a military build up going on in Caño Limón with the excuse of protecting the oil pipelines against constant sabotage explosions. But what is not mentioned is that these actions almost always take place in the same area and that there seems to be only a deal going on.”

Moreover -he comments- we have information that the U.S. government invested $92 million in the Caño Limón oil project, an amount that is not within Plan Colombia. And the National Congress has not assumed any position in the face of this situation. On the contrary, it has been silent in this issue.

According to the advisor of the USO “the greatest number of military and police officers are now in the Arauca Department, a region where there had not been serious cases of paramilitary action; and now we can see how their presence is being promoted in the area. And coincidentally, three members of the directive board of the Central Union of Workers (Central Unica de Trabajadores) were assassinated a couple of months ago.”

Cañas says that not only are there runways for military planes in Caño Limón but also tanks, artillery, reconnaissance planes, a strong Colombian military contingent, and a group of U.S. marines. “And who is to guarantee that all this, the reconnaissance planes; for instance, are not being used against Venezuela?” the interviewee wonders. The process against that country., -he points out- is not going to be directly carried out by U.S. military, but by their paramilitary aides; and maybe that’s why they are transforming the Caño Limón facilities into a small military fort.

This spokesman for the USO assures that Occidental de Colombia aims to wipe out the presence of a labor union “because it doesn’t want the presence of U.S. marines in the oil field to become public”.

Nevertheless, the labor conflict seems imminent, since last October 8th , the strike was approved by vote. If it is carried out, its effects will be felt beyond our borders, because it will be yet another straining factor on a market already subjected to uncertainty and speculators. Cañas also asserts that the multinational oil companies have imposed their will, regardless of the law; and even worse, he says that the controlling government agencies have either gone along, or been lenient with all this looting.

As for the behavior of the oil companies in the Indigenous areas, community spokesmen of the Uwa Indigenous community have put it in these words: “The rowa (the whites) that accumulate money are not willing to accept the justice of time and of our gods. And they want to drive us out of the last pieces of land we have left. Since the beginning of the last century, the oil companies, in alliance with the government, have become the new colonizers of all these territories; they want to offer trinkets to us in exchange for our lands and our lives.

Published in Quantum N.39

Alfredo Carquez Saavedra
Periodista venezolano experto en temas petroleros