COLOMBIA: INDIANS PROTESTS

A protest by U'wa Indians that has shut down Colombia's second-longest oil pipeline for a month and cost the government more than $130 million will continue after Friday talks aimed at ending the standoff failed.

The 480-mile Caño Limón pipeline can transport, to Colombia's Atlantic coast, up to 220,000 barrels a day of oil, or more than one-fifth of the country's total daily production. But it hasn't pumped a drop of oil since March 25, the day the Colombian military said Marxist rebels blew up a section of the pipeline in the remote northeastern state of Norte de Santander, near the Venezuelan border.

The bombing attack happened on land belonging to the U'wa Indians, a 7,000-member tribe that is as strongly opposed to exploitation of natural resources through oil exploration and drilling as the Marxists rebel groups that allegedly attacked the pipeline. The pipeline is used by state oil company Ecopetrol SA and California-based Occidental Petroleum Corp. 

Following the bombing, more than two dozen members of the indigenous group, angry over what they say are repeated spills from the pipeline, surrounded the area where the pipeline was damaged, and, 30 days later, are yet to allow Ecopetrol workers into the area to repair it so oil pumping can resume.

With the pipeline turned off, the 72,000-barrel-a-day Caño Limón field, jointly owned by Occidental and Ecopetrol, has had to shut down all production because the pipeline is the only way it can send oil to the coast for export, and the field's storage tanks are full. Caño Limón's production represents 7% of all oil production in Colombia, Latin America's fourth-largest producer.

The government has made repeated efforts to resolve the dispute and get the oil flowing again, and, Friday morning, top officials traveled from Bogotá to the cloud forest region to meet with some 300 U'wa members.

The meeting didn't go well, said Aura Tegria, an U'wa spokeswoman.

"The proposals they offered weren't close to what we were demanding," said Ms. Tegria, who said the tribe is preparing a formal statement for later Friday. "We will continue to not authorize the repair of the oil pipe."

A spokesman at Ecopetrol confirmed no deal was reached, adding that this is the longest period "in many years" that the Caño Limón pipeline and field have been shut down. Colombian rebels bombed pipelines 259 times last year, but most of those times the damage was repaired in a matter of days.

Representatives at Occidental weren't immediately available for comment.

The administration of Colombian President Juan Manuel Santos is in peace talks with the top guerrilla group, the Revolutionary Armed Forces of Colombia, or FARC, and, if a deal is reached, the rebel fighters would lay down their weapons. But U'wa representatives said it wasn't the FARC, bur rather Colombia's second-largest rebel group, the National Liberation Army, or ELN, that was responsible for the attack on the pipeline in late March.

The ELN isn't involved in any formal peace talks.

Both Ecopetrol and Occidental have had to declare at least partial force majeures on some of their oil cargoes out of Colombia due to the U'wa protest. This removes the companies from legal obligations to deliver shipments they previously agreed to in a contract.

While the pipeline was only transporting 72,000 barrels a day of oil at the time of the attack, it normally carries nearly 200,000 barrels a day, which includes oil coming from another pipeline, the new Bicentennial pipeline that connects to the Caño Limón in the state of Arauca.

The Bicentennial pipeline has also been attacked by rebels several times this year, so oil producers in the Eastern plains that use the pipeline have had to use tanker trucks or smaller pipelines to deliver their oil from the fields to the coast.

One of those oil companies, Pacific Rubiales Energy Corp. PRE.T +2.18% , said, in a news release Wednesday, that its transportation costs during the first quarter of this year rose to $2.50 a barrel from $2.00 a barrel "as a result of the use of additional trucking and alternate pipeline transportation costs following terrorist attacks on the Bicentennial pipeline."

Officials at Rubiales weren't immediately available for further comment.

wsj.com