annual rate of 4 percent through the year 2000, reaching 108,800 boe/d, or 642 NMcf/d.
One of the most important issues facing the Colombian hydrocarbons industry is the development of the Cusiana field. Despite decreasing production of the Caño Limón field, if Cusiana reserve estimates of at least 1.5 billion barrels of medium to light crude oil and condensate are confirmed, Colombia could significantly increase production above the present level of 440,000 b/d. Furthermore, the associated gas produced with the Cusiana crude could supply the projected increase in energy consumption.
Another important policy issue facing the Colombian hydrocarbons industry is the systematic sabotage of transportation and production facilities and the kidnapping of oil executives carried out by guerrilla groups. These attacks have cost the government a 21 percent decline in oil export revenues and may have a long-term impact on foreign investment in the country. Originally, the reason for such violent activity was the intention of the guerrillas to nationalize the country's oil industry. However, most recently, their nationalistic political ideology has been replaced with an espousal of their "business terrorism," a lucrative activity which earned them US$250 million in 1991. In order to pay for the anti-insurgency activities, the government has raised taxes on the operations of foreign oil companies from 30 percent to 37.5 percent and instituted a "war tax" of US$1.00 per barrel of oil produced. While a series of negotiation rounds has taken place, attacks continue. These guerrilla attacks, which have already caused occasional electricity blackouts in the country, will pose a threat for Ecopetrol's development plans as additional installations and transportation facilities will increase the targets available for guerrilla attack.
Finally, the issues at stake are Colombia's tax and fiscal reforms. As the Colombian government strives to open its oil industry to foreign investment, better incentives in domestic financial and tax policies are needed in order to entice foreign oil companies to invest in the promising oil sector.