BP Operations in Colombia
According to former CEO Tony Hayward, as of 2010 BP had been involved in Colombia for over 20 years and 'played a major role in finding and developing the country's major oilfields'. The assets of BP's wholly owned subsidiary, BP Exploration Company (Colombia) Limited (BPXC), included five producing fields in four association contracts, interests in four pipelines and two offshore exploration blocks. Their net reserves in 2010 totalled 60 million barrels of oil equivalent (boe) and net production was approximately 25,000 barrels per day (bpd).
Upstream, BPXC was operator at Cusiana and Cupiagua fields near Taumarena in the central-eastern Casanare province. Midstream, BPXC had interests in the Cuasiana gas processing facility and interests in four pipelines totalling some 1,600 km of oil and 400 km of gas pipelines, including a 24.8% share in the Ocensa crude oil pipeline.
According to a leaked US diplomatic cable from December 2008, BP announced that its recently completed seismic data from two blocs one mile offshore of Cartagena strongly indicated the presence of commercially viable gas deposits. BP Colombia President Guillermo Quintero announced that the company intended to begin drilling exploratory wells in 2009 and that BP had invested $35 million in mapping and studying offshore blocs.
In November 2009 the Guardian reported that 95 Colombian farmers were suing BP in the high court in the United Kingdom, BP's headquarters, alleging that the construction of the Ocensa oil pipeline caused serious damage to their land, crops and animals. The farmers claimed damages for breach of contract and negligence. According to the claimants, an environmental impact assessment (EIA) conducted by BP prior to the construction of the pipeline acknowledged significant and widespread risks of damage to the land, but the mostly illiterate farmers were not informed. BP officials deny any long-term damage had been caused.
The region where the pipeline was laid had been plagued by paramilitary activity and Marta Hinestroza, one of the farmer's laywers, was forced to flee Colombia for Britain when she discovered that her name was on a paramilitary hit list. As of early 2012 no reports were found of results of the case.
In 2006, BP had agreed an out-of-court settlement with a group of farmers over the Ocensa pipeline, rather than to allow the case to be heard in London's High Court.
Termination of Activities
However in August 2010 BP announced that it had agreed to sell its exploration, production and transportation business in Colombia to a consortium of Ecopetrol (51%) and Canadian Talisman Energy (49%). The two companies were to pay BP a total of $1.9 billion for 100% of the shares in BPXC . This formed part of BP's plan to divest up to $30 billions of assets globally in order to help pay the bill for the Deepwater Horizon spill. It was expected that the majority of BP's 470 staff would transfer with BPXC to the new owners.
- BP Agrees to Sell Colombian Business to Ecopetrol and Talisman" BP 3 August 2010.
- Colombia Courts Oil Interests" Chicago Tribune, 27 March 1995.
- Colombia Energy Update: More Blocs, Gas Prospects, And Biofuels" Wikileaks, 17 December 2008.
- BP faces damages claim over pipeline through Colombian farmland" Guardian, 11 November 2009.
- Colombian farmers win BP payout" BBC, 11 November 2009.