The oil municipalities of the country receive five times more income compared to the headwaters that do not develop hydrocarbon activity.
This follows from a report developed by the Colombian Oil and Gas Association (ACP), in which the economic conditions and quality of life of the urban centers with these extractive tasks are compared, compared to those that do not develop it.
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The basis for the study was 41 municipalities, located in five departments and concentrate 85% of crude oil production of the territory: Meta, Casanare, Santander, Arauca and Boyacá, product of taxes, royalties and the General System of Participations.
Likewise, the municipal capitals with hydrocarbon development contribute 11 times more to the GDP of their departments than those that do not.
“This analysis was carried out based on the variables of the Municipal Typology Index (ITM) calculated by the National Planning Department (DNP) to measure the level of development of the country’s municipalities, and which evaluates the economic, institutional, environmental, urban, quality of life and security for each municipality”, highlights the report.
The ITP takes as a sample the years from 2005 to 2015, in which the municipalities of these five departments received $7.7 billion in royaltiesof which 90% was captured by the oil municipalities.
In addition, the report emphasizes that there is a multiplier effect in municipal taxes associated with the chain of goods and services.
The foregoing, without taking into account that crude oil production increased by 48%, and led to a 70% increase in income of the headers that carry out the activity. And it adds that, the collection of ICA and Predial has been significantly higher vs. non-oil ones.
It is also added that they have better conditions in their homes and in access to public services; with significant differences compared to those who do not carry out the hydrocarbon activity in access to drinking water (35% better) and sanitary provisions (30% better).
In health matter, The study highlights that the oil municipalities have better conditions, with a difference of 50% in fewer barriers to access this type of service.
And in education, childhood and youth conditions, the capitals that develop the operation stand out for having a higher level of schooling, and fewer households with illiteracy, school absenteeism and child labor; with a difference close to 4%, 2%, 11% and 25%, respectively.
Finally, the report indicates that the oil municipalities have 2% less informal work in households compared to those that do not, measured as a percentage of families with at least one employed person without contributing to social security. “Informality in the oil regions decreased by 17%, reaching the national average (80%)”, he underlines.
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With or without operation
This report is complemented by another economic study of the oil industry called: ‘Energy policy scenarios and their impact on Colombians’, on the contributions that the sector could make to the country in the next four years, and even by 2032.
Thus, it presents two scenarios, one of sustaining oil and gas exploration and production (Future A), which contrasts with one of weakening oil and gas exploration and production (E&P) (Future B).
In the case of the first scenario, the study indicates that it is estimated that the sector would generate income for the Nation of $105 billion in the next four years and $227 billion until 2032, contributing to the financing of social development programs, economic reactivation, diversification production and energy and the fiscal balance of the country.
Likewise, it would contribute COP 38 billion in royalties in the next four years (2022-2026), and COP 80 billion until 2032, which, with the coordination of optimal public policies, would contribute to improving the quality of life in the country’s regions, especially those with greater unsatisfied basic needs (benefited with royalties) and the producers.
In contrast, in the second scenario, for slump in production a loss of $18 billion of tax contributions and royalties from E&P companies to the Nation and the regions is projected.
The study highlights that a producing department, such as Meta, would stop receiving $412,000 million in royalties, resources that are equivalent to the income allocated to the department’s health and tourism funds; and a non-oil sector like Chocó would stop receiving $70,000 million, which today is equivalent to half of the income of the local Chocó health fund.
On the other hand, in Future A or industry sustainability scenario, the positive impact is also reflected in the economic and social dynamics of the regions, since it would allow the contracting of goods and services for $109 billion between 2022-2026, maintain at least 95,000 jobs, and promote socio-environmental investments in the regions for at least $1.7 billion in this same period.
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“This sector can be a great ally in the fight against poverty, since the resources it generates would support the financing of the main development programs of the next government, and would make it possible to leverage energy and productive diversification.”, affirmed Francisco José Lloreda Mera, president of the ACP.
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