Andean Development May Finance Colombia Oil Pipeline

The Andean Development Corporation, or CAF, may finance construction of an oil pipeline in Colombia, a representative for the Caracas-based institution said in a report in Portafolio newspaper Friday.

Victor Traverso, the Colombian delegate for CAF, didn't indicate a timetable or other details on the possible pipeline loan, but said CAF aims to lend a total of about $6 billion to Colombia over the next four years on a variety of projects.

"We're exploring the possibility of an oil pipeline as well as financing for other airports and some oil companies," Traverso told the financial news daily.

Colombia's booming oil sector produced a record 884,000 barrels a day of crude oil last month and is aiming to reach 1 million barrels a day by the end of this year.

But a top official said earlier this week that a lack of transportation options for getting the oil from fields to shipping ports for export threatens to halt the rise in output.

Oil companies in Colombia currently use a combination of pipelines and tanker trucks to deliver crude to shipping ports, but analysts say more pipelines are needed as a long-term solution to transportation bottlenecks.

However, construction and operation of pipelines in Colombia is a risky business as they are often blown up by the country's leftist guerrilla groups that have been waging war with the government for nearly half a century.

CAF, with 18 partner countries, is the main source of financing for infrastructure projects in Latin America.

In the last six years CAF has approved about $40 billion in support for sustainable development and regional integration in Latin America.

Berny Polanía

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