news.bbc.co.uk Wednesday, 5 March, 2003, 23:36 GMT

A bomb has ripped through a busy shopping centre in north-eastern Colombia, killing at least seven people and injuring more than 60.

Police are blaming left-wing rebels for the blast, which happened around 0940 local time (1440 GMT) in the city of Cucuta.

The bomb went off in the underground car park of one of the city's busiest shopping malls, igniting a huge fire that forced shoppers to flee in panic.

The blast brought terror to a city that has one of the highest murder rates in Colombia, itself one of the most dangerous countries in the world.

Rescue services, including some from just over the border in Venezuela, rushed to the scene as frightened passers-by looked on.

"We heard a very strong explosion and then flames burst out. Then there was a fire and some parts of the building caved in," said a man who escaped unharmed, quoted by Reuters news agency.

Security

Initially police believed they were dealing with a car bomb, but they later said it was an explosive device placed close to a parked car.

The governor of Norte de Santander province, Juan Santaella, said the blast was "a real tragedy" for the city, the French news agency AFP reported.

During the last few months there has been a wave of bomb attacks in Cucuta.

The city lies some 450 kilometres (280 miles) north of the capital, Bogota, close to the border with Venezuela.

Local police believe the blast is the work of guerrillas from the National Liberation Army (ELN), although the larger Revolutionary Armed Forces of Colombia (FARC) also operate in the region.

Both groups are fighting right-wing paramilitaries for control of the drug crops which proliferate in the area.

Whoever was behind the bombing, the BBC's Jeremy McDermott in Bogota says, it further undermines the security strategy of President Alvaro Uribe, who has pledged to crush the rebel insurgency.

biz.yahoo.com Tuesday March 4, 2:20 pm ET By Dan Molinski, Of DOW JONES NEWSWIRES

BOGOTA (Dow Jones)--One day after Colombia's state oil company Ecopetrol said it found an estimated 200 million barrels of "high quality" crude on what is ancestral land of the U'wa Indians, tribal officials said they plan to oppose further drilling on the site.

But, unlike in the past, the U'wa aren't talking about group suicide.

"We are going to ask to meet directly with the national government on this issue because we do not accept drilling here," tribal spokesman Trinidad Cobaria said Tuesday in a telephone interview with Dow Jones Newswires.

He added: "But as far as threatening to join hands and run and jump off a cliff, no, we won't be doing that."

The U'wa gained notoriety in 1999 when they threatened exactly that - mass suicide - if the original contract holder for the Gibraltar I well, Occidental Petroleum Corp. (NYSE:OXY - News) , began drilling.

A legal dispute with the U'wa ended with Occidental receiving the green light to explore, as the well, located near the border with Venezuela in the state of Boyaca, is outside the official boundaries of the U'wa reserves.

The Los Angeles-based firm began drilling in 2000 and the U'wa never followed through with its suicide threat.

Occidental originally said the well may hold up to 1.2 billion barrels of reserves, which would put it on par with the nation's top two fields, BP PLC's ( BP) Cusiana-Cupiagua and Occidental's Cano Limon, which when discovered had reserves of more than 1 billion barrels each.

But the drilling failed to produce results and Occidental stopped looking in July 2001.

After Occidental handed the contract back over to Ecopetrol, the state-run firm decided to try its hand at the well. It began looking for oil at Gibraltar last November.

The U'wa, meanwhile, said Ecopetrol would never find a drop of oil, claiming its ancestral gods would hide what it calls "the blood of the earth."

After Ecopetrol's President, Isaac Yanovich, announced Monday that oil has, in fact, been found at Gibraltar, U'wa spokesman Cobaria said with a slight chuckle that the gods simply didn't hide all of it.

"Yes, Ecopetrol found some oil, but from what I've just seen on the television news, it's a tiny amount compared to what (U.S. firm) Occidental had originally expected to find there," he said.

Occidental Didn't Dig Quite Far Enough

The discovery at Gibraltar, if confirmed by upcoming final tests, would be the largest ever for Ecopetrol, albeit much less than earlier estimates of the well's potential.

The find was made at a depth of 12,050 feet, after an investment of about $9.5 million, Yanovich said Monday.

An Occidental official told Dow Jones Newswires in 2001 that the company gave up looking for oil on the same well at a depth of 12,000 feet, after spending $ 60 million and only finding traces of gas and water.

Yanovich noted that Occidental has no rights to the find, since it abandoned the project.

The possible discovery of 200 million barrels of crude at Gibraltar is by no means the answer to the country's oil or economic problems, however.

The administration of Uribe says it needs to find a total of 1 billion in reserves by the end of his four-year term, which began in August, in order to avoid becoming a net importer.

Oil and its derivatives are Colombia's main export, accounting for more than 25% of total foreign revenues.

As Latin America's fourth-largest producer, the country produced about 580,000 barrels a day of crude in 2002 - about half for export - but total production will fall to about 535,000 barrels per day this year.

The country produced a total of 210 million barrels last year, while adding only 114 million barrels to its proven reserves. The country's estimated total reserves were 1.8 billion barrels at the end of 2001.

The search for oil in Colombia has been hurt by a long-running rebel conflict that has scared off many would-be investors.

Marxist rebels blew a hole in the No. 2 Cano Limon oil pipeline 40 times last year.

-By Dan Molinski, Dow Jones Newswires; 571-600-1980; colombia@dowjones.com

news.bbc.co.uk Last Updated:  Tuesday, 4 March, 2003, 23:24 GMT

A prospective new oil find in Colombia could reignite a battle over land that indigenous campaigners thought they had won.

The president of Colombia's state-owned oil company, Ecopetrol, announced that exploratory drilling close to the country's north-eastern border with Venezuela has located reserves of approximately 200 million barrels of light crude oil.

The well was abandoned in May 2002 by a US oil company Occidental Petroleum, after almost a decade of legal wrangling and international campaigning to halt the drilling.

The area is the ancestral territory of 5,000 U'wa Indians. They believe oil is the blood of the earth and have previously threatened mass suicide if drilling went ahead.

After Occidental left, Ecopetrol took over exploration.

'High quality'

Colombia produces about 590,000 barrels of oil a day.

But last year Isaac Yanovich, Ecopetrol's president, warned last year that reserves would begin to run out within five years.

But on Monday he said he was hopeful.

US special force have been deployed in the oil rich area

"There's a good chance that this is of very high quality," he told reporters, according to news agency Associated Press.

And while Colombia stood to take 85% of any profits realised through Occidental exploration, "Gibraltar I is a 100% Ecopetrol project, which means the reserves and the production belong exclusively to the nation," he said.

But there remain manifold problems in extracting oil from the region.

In addition to the U'wa Indians' objections to drilling, left-wing guerrillas often bomb oil pipelines and installations as part of their 38-year war against the state.

The US Government recently agreed to provide $98m - including US special forces - to help protect a lucrative oil pipeline in Colombia which has been attacked 200 times in the last two years alone.

www.upi.com By Owain Johnson UPI Business Correspondent From the Business & Economics Desk Published 3/4/2003 1:55 PM

CARACAS, Venezuela, March 4 (UPI) -- Colombia's state-owned oil producer Ecopetrol has announced a record discovery of crude oil deposits, which amounts to up to 200 million barrels of light crude in the north of the country near the Venezuelan border.

The Minister of Mines and Energy, Luis Ernesto Mejia, hailed the find and said Tuesday that it would be "extremely positive" for the economy.

U.S.-based multinational Occidental Petroleum, or Oxy, had done several joint surveys with Ecopetrol in the region, known as the Samore Exploration Block, in recent years, but recently abandoned the project after failing to locate any oil.

Ecopetrol later decided to proceed on its own and was rewarded with the large find.

Ecopetrol President Isaac Yanovich did warn that "it is still impossible to determine the size of the deposit" but confirmed the company expected reserves of about 200 million barrels.

It will take about two weeks to confirm the size of the deposit and the quality of the crude.

"The most important aspect of this discovery is that this is 100 percent an Ecofuel project," Yanovich said. "That means that the reserves and the production based on those reserves will belong entirely and exclusively to the nation."

The government gave Ecopetrol and Oxy joint rights to exploit the Samore Exploration Block in 1991, when analysts estimated the region could hold up to 1.4 billion barrels of crude.

The project proved a costly failure for the U.S. company, which faced enormous hostility from the local U'wa indigenous community and constant security threats from leftist rebels in the area.

These factors prevented Oxy from beginning drilling in the area for close to a decade. By May 2002, the company had invested $100 million and drilled a 12,000-foot well known as Gibraltar 1, but had only discovered gas deposits.

At that point, Oxy, which had faced repeated guerrilla attacks on its crucial Cano Limon pipeline, cut its losses and handed the prospecting rights back to the Colombian authorities.

Ecopetrol restarted exploration in the area in November with an additional investment of about $10 million. The company hit crude at Gibraltar 1 at 12,050 feet, just 50 feet further down than Oxy had drilled.

Mejia said that it would cost about $150 million to begin production at the site.

The discovery couldn't have come at a better time for Colombia. Experts had warned recently that the country would be forced to import hydrocarbons within 14 months, as falling productivity and exploration meant Ecopetrol's output wasn't keeping pace.

Colombia was a net importer of hydrocarbons between 1975 and 1986 -- when it became self-sufficient. By reducing the need for imports, the find will help the trade balance and the profits its generates for the state-owned firm will help the fiscal balance.

Although oil is Colombia's top export commodity, the industry has often been overlooked internationally, partly because of its vulnerability to rebel groups.

Colombia's leftist guerrillas consider oil companies legitimate targets. Foreign oil workers run the risk of kidnap and companies frequently pay "taxes" to prevent damage or destruction of their installations and pipelines.

But as Ecopetrol's find demonstrates, there's great potential for major discoveries in Colombia. Unlike its neighbor Venezuela, about 70 percent of Colombia's sedimentary areas have yet to be properly explored. Only seven of its 18 sedimentary basins are being commercially exploited.

If the authorities can improve security, the country would be well-placed to benefit from the U.S. government's desire to diversify oil imports, particularly as Colombia isn't an OPEC member and faces no output ceiling.

www.forbes.com Reuters, 03.04.03, 2:59 PM ET By Ibon Villelabeitia

BOGOTA, Colombia, March 4 (Reuters) - Colombia and Ecuador inaugurated a $45 million power line linking the two nations on Tuesday; a move that Bogota-based electricity distributor ISA <ISA.CN> said would pave the way for a common power market across the Andean region. State-controlled ISA, Colombia's largest distributor, and Ecuador's Transelectric, have completed work on a 130 mile (210 km) transmission line with a 260-megawatt capacity across the countries' shared border, ISA President Javier Gutierrez said. "We are taking one step at a time. A year ago we were not in Ecuador and now we are going after Peru. We think it is perfectly possible to become an energy provider in an integrated Andean region market," Gutierrez told a news conference in the Colombian capital Bogota. Last December, energy officials from Colombia, Ecuador, Bolivia, Venezuela and Peru signed a regionwide regulatory structure for energy connection. With control of more than 80 percent of Colombia's high voltage network, ISA plans to build by September 2004 an $18 million power line hooking up transmission lines of Peru and Ecuador through Red Electrica Peruana, a unit of ISA. ISA, which is eyeing agreements to hook up lines with Venezuela and Bolivia, is also studying a $200 million project to connect Colombia's national grids via a cable crossing the inaccessible jungles of the Darien Gap, Gutierrez said. Speaking to Reuters, Gutierrez said the Andean common electricity market could become a springboard for ISA's future incursions into the energy market of southern South America. "We don't have any expansion plans into the south at the moment. But once we get into Peru we can get into Chile or the Mercosur trade block. We are constantly evaluating market opportunities," Gutierrez said. Mercosur includes Brazil, Paraguay, Uruguay and Argentina. In 2002, ISA posted net profits of 23.92 billion pesos, down 76.4 percent from net profits of 101.1 billion pesos in 2001, as a depreciating peso currency greatly increased the costs of the company's debt, which is largely tied to multilateral banks. ISA sales in 2002 jumped 10.2 percent to 555.58 billion pesos, up from 504.05 billion pesos in 2001. The government has a majority 58-percent stake in ISA, which has 13,000 energy pylons and nearly 5,000 miles (8,000 km) of high-and medium-tension lines in Colombia. ISA's network in Colombia has been badly hit by a sabotage campaign by Marxist rebels fighting in a four-decade guerrilla war. In 2002, rebels blew up 458 energy pylons, of which 258 belonged to ISA, Gutierrez said. ISA, which last year issued 120 million shares on the local stock market to raise $58 million for fresh investments, is mulling a listing on an international stock exchange such as New York or Madrid. ($US 1 = 2,959 pesos) Copyright 2003, Reuters News Service