Foreign direct investment in oil and gas in Colombia: qualitative research of main barriers

Abstract

This research aimed to identify the main investment barriers for Foreign Direct Investment (FDI) in Oil and Gas in Colombia. The first part of the research was the literature review in which the Survey from the Fraser Institute was selected as the primary source of information. This Survey had global coverage and measured 16 factors that are consider critical for investment decisions. Among them, five factors were selected Security, Infrastructure, Disputed Land Claims, Labor Regulation/Employment Agreement and Protected Areas which had negative responses over 50 %. Through interviews with six high executives, one from each Oil Associations of Colombia (Acipet, ACP, ANDI and Campetrol ), one from an Regional Oil Company and one from Oil Service Company, it was possible to get opinions about trends and improvement actions to eliminate investment barriers in the country. Using the content analysis from Bardin, the interviews were reviewed to identify similarities and differences about trends and actions that the government could take to become an effective enabler of FDI in Oil and Gas in Colombia. Main similarities of the interviews were regarding the importance of social development in Oil areas in the country. Most of the barriers in the sectors have as a root cause extreme poverty and poor education. There will not be sustainability on oil exploration and production on those areas if the people do not have basic needs cover and when they depend 100% on non-renewal resource. The government should develop initiative that promote agricultural development in oil areas through education and productivity program. This will have a significant impact on security and facilitate previous consultation project.