Colombia's Cocaine Boom Is Fueling An Unprecedented Spike In Oil Theft

Colombia is facing a major issue with cocaine production, as it is the world’s largest producer of the drug. The United Nations Office on Drugs and Crime (UNODC) reported that the amount of land used for cultivating coca, the raw ingredient of cocaine, has increased by 13% to 230,000 hectares in 2022. This has the potential to produce a record 1,738 metric tons of cocaine. The high demand for gasoline to process coca leaves, combined with soaring cocaine production and rising oil prices, is leading to an increase in petroleum theft in Colombia. This is negatively impacting the country’s oil industry, which is already facing uncertainty and geopolitical risk.

The regions of Colombia that dominate the cocaine trade also hold significant elements of the country’s hydrocarbon sector. The departments of Nariño, Norte de Santander, and Putumayo account for 65% of all coca crops in the country. Putumayo, in particular, is known for its large reserves of oil as well as its strong presence in the cocaine trade. The increasing cocaine production, especially in the southern part of the country, is affecting operations in the petroleum industry.

The growing demand for gasoline and chemicals needed to produce cocaine is leading to an incentive for criminal groups to steal oil from Colombia’s pipeline network. Strict government controls on the sale of large volumes of gasoline also contribute to this. The pipeline system is vital for transporting crude oil across Colombia’s challenging terrain, and it passes through remote areas where cocaine production is dominant.

The Caño Limon and Transandino pipelines are the main targets for petroleum theft. Criminal groups tap into the pipelines using primitive valves, which not only extract the oil but also cause environmental damage. The Caño Limon pipeline has been a target for attacks by leftist guerrillas for many years, and it has experienced over 1,600 attacks since it began operations in 1986. The pipeline was also at the center of a major scandal in 2023, where a criminal coalition stole large quantities of oil and sold it on international markets. The OTA pipeline, which connects oilfields in Putumayo to the Pacific Coast, is also experiencing an increase in petroleum theft.

The stolen oil is processed into a low-quality gasoline known as “pategrillo” or “cricket foot” in crude jungle refineries. These refineries have caused severe environmental damage in the region, with oil contaminating the soil and water bodies.

The rising petroleum theft in Colombia is negatively impacting the country’s vital oil industry, which is already struggling to recover from the COVID-19 pandemic. Insecurity in rural and remote areas, as well as policy decisions to limit exploration contracts and ban hydraulic fracturing, are further deterring investment in the sector. The estimated daily volume of stolen oil has tripled since 2018, further exacerbating the challenges faced by Colombia’s oil industry.