Security Assistance: Efforts to Secure Colombia's Cano		 
Limon-Covenas Oil Pipeline Have Reduced Attacks, but Challenges  
Remain (06-SEP-05, GAO-05-971). 				 
                                                                 
Oil is one of Colombia's principal exports. The Cano		 
Limon-Covenas oil pipeline transports almost 20 percent of	 
Colombia's oil production. The pipeline originates in the	 
Department of Arauca in northeast Colombia. It carries oil nearly
500 miles to the Caribbean port of Covenas. The pipeline has been
a principal infrastructure target for terrorist attacks by	 
Colombia's insurgent groups. During 2001, attacks on the pipeline
cost the Colombian government an estimated $500 million in lost  
revenues for the year. The United States agreed to assist	 
Colombia in protecting the first 110 miles of the pipeline where 
most of the attacks were occurring. We examined how the U.S.	 
funding and resources provided to Colombia have been used, and	 
what challenges remain in securing the pipeline.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-971 					        
    ACCNO:   A35699						        
  TITLE:     Security Assistance: Efforts to Secure Colombia's Cano   
Limon-Covenas Oil Pipeline Have Reduced Attacks, but Challenges  
Remain								 
     DATE:   09/06/2005 
  SUBJECT:   Crude oil pipeline operations			 
	     Federal aid to foreign countries			 
	     Federal funds					 
	     Foreign aid programs				 
	     Foreign governments				 
	     Foreign military assistance			 
	     Funds management					 
	     International relations				 
	     Losses						 
	     Military training					 
	     Police training					 
	     Program evaluation 				 
	     Terrorism						 
	     Government/business relations			 
	     Blackhawk Helicopter				 
	     Colombia						 
	     UH-60 Helicopter					 

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GAO-05-971

                 United States Government Accountability Office

                     GAO Report to Congressional Requesters

September 2005

SECURITY ASSISTANCE

Efforts to Secure Colombia's Cano Limon-Covenas Oil Pipeline Have Reduced
                         Attacks, but Challenges Remain

                                       a

GAO-05-971

[IMG]

September 2005

SECURITY ASSISTANCE

Efforts to Secure Colombia's Cano Limon-Covenas Oil Pipeline Have Reduced
Attacks, but Challenges Remain

                                 What GAO Found

Since fiscal year 2002, the United States has provided about $99 million
in equipment and training to the Colombian Army to minimize terrorist
attacks along the first 110 miles of the Cano Limon-Covenas oil pipeline,
mostly in the Arauca department. U.S. Special Forces have provided
training and equipment to about 1,600 Colombian Army soldiers. However,
the delivery of 10 helicopters purchased for the program was
delayed-arriving mid 2005. Without the helicopters, the Colombian Army's
ability to respond rapidly to pipeline attacks has been limited.
Additionally, some equipment, such as night vision goggles, has not
arrived due to the long lead-time required to obtain these items because
of U.S. military operations in Afghanistan and Iraq.

Despite the delays in equipment deliveries, the number of attacks on the
Cano Limon-Covenas oil pipeline has declined and security in the area has
improved. In addition, the Colombian Army and Colombian National Police
have improved relations with the civilian population and new oil
exploration is occurring in the area due to the improved security.
However, challenges to securing the pipeline remain. More attacks are
occurring on the Cano Limon-Covenas oil pipeline outside the 110-mile long
area originally addressed. Most of the Colombian Army stationed in these
other areas has not received U.S. training. In addition, the insurgents
have attacked the electrical grid system that provides energy to the Cano
Limon oilfield. Without electricity, oil cannot be pumped. Because the
U.S. funds provided for the program will be depleted by the end of
September 2005, sustainability of the progress made is uncertain. Colombia
cannot fully operate and maintain the helicopters provided without
continued U.S. support; and due to U.S. commitments in other parts of the
world, U.S. Special Forces will be reducing personnel in Colombia, which
will limit future training.

Cano Limon-Covenas Oil Pipeline Attacks, 1996-July 2005 180 Attacks 170
160

140

120

100

80

60

40

20

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 July 2005

Year

                   Source: Occidental Petroleum Corporation.

                 United States Government Accountability Office

Contents

     Letter                                                                 1 
                                          Results in Brief                  3 
                                             Background                     4 
                            Helicopters and Other Equipment Were Delayed   10 
                              Improved Security and Governance in the     
                                       Department of Arauca,              
                                       but Challenges Remain               14 
                                            Conclusions                    20 
                                Recommendation for Executive Action        20 
                                 Agency Comments and Our Evaluation        20 
Appendixes                                                             
               Appendix I:             Scope and Methodology               22 
              Appendix II:     Comments from the Department of State       24 
                           Table 1: U.S. Support for Protecting the Cano  
     Table                                Limon Pipeline,                 
                                     Fiscal Years 2002 and 2003           
                              Figure 1: Map of Colombia and Cano Limon        
    Figures                  Pipeline Figure 2: Oil Spill from Pipeline   
                                               Attack                     6 8
                            Figure 3: State-Constructed Facilities on an  
                                         Army Base near the               
                                          Town of Saravena                 12 
                               Figure 4: Cano Limon Pipeline Attacks,      15 
                                           1996-July 2005                 
                           Figure 5: Electrical Grid System Attacks that  
                                           Have Affected                  
                                     Occidental, 2000-July 2005            17 

Abbreviations

MilGroup Military Group, U.S. Embassy, Bogota
NAS Narcotics Affairs Section, U.S. Embassy, Bogota

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
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copyright holder may be necessary if you wish to reproduce this material
separately.

A

United States Government Accountability Office Washington, D.C. 20548

September 6, 2005

The Honorable Tom Davis Chairman, Committee on Government Reform House of
Representatives

The Honorable Mark E. Souder

Chairman, Subcommittee on Criminal Justice, Drug Policy, and Human
Resources Committee on Government Reform House of Representatives

The Honorable Charles E. Grassley Chairman, Caucus on International
Narcotics Control United States Senate

Oil is one of Colombia's principal export commodities. The Cano
Limon-Covenas oil pipeline1 originating in the Department of Arauca
transports almost 20 percent of Colombia's oil production, approximately
100,000 barrels of oil per day. Since 1986, however, the Cano Limon
pipeline has been a principal infrastructure target for terrorist attacks2
by Colombia's insurgent groups.3 During 2001, attacks on the pipeline
reduced production by an estimated 70,000 barrels of oil per day, and cost
the Colombian government an estimated $500 million in lost revenues for
the year. This loss crippled the Arauca department's government, which
receives 90 percent of its revenue from the pipeline oil royalties. In
response to these attacks, Colombia developed an infrastructure security
strategy. For the first phase of the strategy, Colombia requested
equipment and military training from the United States to secure the first
110 miles of the Cano Limon pipeline primarily in Arauca, which was the
portion most often

1For the purpose of this report, we refer to the Cano Limon-Covenas oil
pipeline as the Cano Limon pipeline or simply the pipeline.

2The Cano Limon pipeline is approximately 3 meters underground. Usually
when the pipeline is attacked, a hole must be dug and explosives placed
near the pipeline, which results in a dent or rupture.

3The Revolutionary Armed Forces of Colombia, the National Liberation Army,
and the United Self-Defense Forces of Colombia are designated as terrorist
organizations by the United States.

attacked.4 Prior to 2001, the Arauca department, a remote and sparsely
populated area, held little interest for the Colombian government. As a
result, insurgent groups infiltrated all aspects of the department,
threatening its governance and security.

In 2002, the United States agreed to assist Colombia in phase one of its
infrastructure security strategy. The Department of State's (State) Bureau
of Western Hemisphere Affairs and State's Bureau for International
Narcotics and Law Enforcement Affairs, and various components of the
Department of Defense (Defense)5 developed a program to assist the
Colombian Army in regaining control of Arauca; defending the pipeline and
civilian population; and preventing, interdicting, and disrupting
insurgents before they attack the pipeline and nearby communities. The
pipeline security program called for the delivery of helicopters,
equipment, logistical and infrastructure support, and training. Since
fiscal year 2002, the United States has provided $99 million for this
program.

In response to your request, we examined (1) how the U.S. funding and
resources provided have been used to secure the first 110 miles of the
Cano Limon pipeline and (2) what progress has been made in securing the
pipeline and what challenges remain. In order to address these objectives,
we examined State and Defense project information and budget documents,
and interviewed knowledgeable officials involved in the program. We
traveled to Colombia and met with cognizant officials from the U.S.
Embassy in Bogota; the Government of Colombia; and Ecopetrol and
Occidental Petroleum Corporation, which operate the Cano Limon pipeline
and oilfield. We traveled to Arauca and met with the local commanders of
the Colombian Army and Colombian National Police, and spoke with U.S.
Special Forces who were training the Colombian Army. We also toured a
State-constructed facility in Arauca that will house helicopters to help
the Colombian Army move more rapidly throughout the area. We conducted our
review from January 2005 to July 2005 in accordance with generally
accepted government auditing standards.

4The strategy originally consisted of three phases. Phase two was to
protect the rest of the pipeline and phase three was to secure other
infrastructure throughout Colombia. However, State officials told us the
infrastructure security strategy has been incorporated into Colombia's
National Security Strategy, which was finalized in June 2003.

5U.S. Southern Command and the Military Group at the U.S. Embassy, Bogota.

Results in Brief 	In 2002, the United States agreed to provide equipment
and military training to the Colombian Army to help minimize terrorist
attacks along 110 miles of the Cano Limon pipeline. Since fiscal year
2002, the United States has provided about $71 million for 10 helicopters6
and related logistical support and ground facilities, and about $28
million for training and other equipment.

o 	To station the helicopters in Arauca, State built facilities on a
Colombian Army base near the town of Saravena. The helicopters, which were
to arrive in Colombia as early as May 2004, started arriving in April 2005
and the last delivery occurred in June 2005. State attributed some of the
delay to negotiations over the type of helicopters to purchase and
transportation problems. Without the helicopters, the Colombian Army's
ability to respond rapidly to pipeline attacks has been limited and has
put them at risk for ambushes.

o 	Defense also provided U.S. Special Forces training and equipment for
about 1,600 Colombian Army soldiers. Because the helicopters only arrived
recently, U.S. Special Forces have extended training through fiscal year
2005 to overlap with their arrival. Additionally, some equipment, such as
ammunition, night vision goggles, and medical supplies, has not arrived
due to the long lead-time required to obtain these items because of U.S.
military operations in Afghanistan and Iraq.

Despite the delays in the arrival of the helicopters and other equipment,
the number of attacks on the pipeline has declined and governance and
security in Arauca has improved. State and Defense officials attributed
the decrease in attacks to strong Colombian leadership; U.S. Special
Forces training; and better coordination among the Colombian Army, police,
and Colombian Ministry of Justice prosecutors (known as fiscalia). In
addition, the Colombian Army and police have improved relations with the
civilian population, and arrests and prosecutions of insurgents have
occurred. New oil exploration is also occurring due to improved security
in the area. However, several challenges remain. Attacks on the pipeline
continue- though at a reduced rate-and the insurgents have changed their
tactics.

6The helicopters are State assets and are provided under a no-cost lease
to the Government of Colombia.

o 	Attacks have increased on the Cano Limon pipeline in the neighboring
Department of Norte de Santander, which is outside the 110-mile range of
the first phase of the original infrastructure security program. Most of
the Colombian Army stationed in Norte de Santander has not received U.S.
training.

o 	The nature of attacks on oil production in Arauca has changed. In
recent years, the insurgents have attacked the electrical grid system that
provides energy to the Cano Limon oilfield. Without electricity, the oil
wells cannot operate.

Finally, the Colombian Army does not have the capacity to fully operate
and maintain the helicopters it possesses without continued U.S. support.7
According to the U.S. Embassy, Bogota, Colombia will not have a sufficient
number of trained pilots and mechanics to operate all the U.S.-provided
helicopters it has until fiscal years 2008 and 2010, respectively. In
addition, due to U.S. commitments in other parts of the world, U.S.
Special Forces will be reducing training in Arauca and throughout
Colombia.

We recommend that the Secretary of State, in consultation with the
Secretary of Defense, develop a plan for transitioning the pipeline
security program to Colombia. The plan should delineate (1) how the
helicopters will be used and maintained, (2) how progress to date will be
sustained, and (3) an expected completion date for U.S. involvement. In
commenting on a draft of this report, State said it was an accurate
assessment of the program and concurred with our recommendation, but
expressed some concern that the report overemphasized the time required to
deliver the helicopters.

Background	In 2004, Colombia was the fourth largest Latin American
supplier of crude oil and petroleum-related products to the United States
and the 16th leading supplier worldwide. One of Colombia's largest
oilfields-Cano Limon-was discovered in 1983 in the Department of Arauca
and today accounts for almost 20 percent of Colombia's oil production. The
oilfield is

7In 2000 and 2003, we reported that Colombia has limited capacity to
absorb the U.S. assistance. See GAO, Drug Control: U.S. Assistance to
Colombia Will Take Years to Produce Results, GAO-01-26 (Washington, D.C.:
Oct. 17, 2000) and GAO, Drug Control: Specific Performance Measures and
Long-Term Costs for U.S. Programs in Colombia Have Not Been Developed,
GAO-03-783 (Washington, D.C.: June 16, 2003).

located in north-central Arauca about six miles south of the Venezuelan
border. The Cano Limon pipeline carries oil from the oilfield northwest
about 477 miles, though seven departments8 to the Caribbean port of
Covenas (see fig. 1). The Cano Limon oilfield is operated by an
association comprised of Colombia's state-owned oil company, Ecopetrol; a
United States company, Occidental Petroleum Corporation; and a Spanish oil
company, Repsol. Between 1986 and 2002, the Cano Limon oilfield generated
$800 million in national royalties and another estimated $1.2 billion in
regional royalties for the seven departments it traverses. In particular,
the oilfield provides Arauca with 90 percent of its total revenues-about
$40 million a year.

8The Cano Limon pipeline traverses the Departments of Arauca, Boyaca,
Norte de Santander, Cesar, Magdalena, Bolivar, and Sucre.

Figure 1: Map of Colombia and Cano Limon Pipeline

Sources: Occidental Petroleum Corporation (data); Map Resources (map).

Throughout Colombia's history, the Department of Arauca has been a remote
area that held little interest for the Colombiangovernmentand lacked an
effective police presence. Over the past 25 years, the discovery of oil
and the establishment of the illegal drug trade have brought the
department a measure of wealth and attracted the attention of Colombia's
insurgent groups. These groups had infiltrated all aspects of the Arauca
government and conducted a variety of illegal activities, such as
extortion of oil revenues; terrorist attacks on economic infrastructure;9
drug trafficking; and attacks against citizens, department officials, and
military and police forces.10 Civilians caught between the insurgent
groups and government forces, often sided with the insurgent groups out of
fear.

In Arauca, the pipeline has been the principal economic infrastructure
target of attacks. During 2001, the Cano Limon pipeline was attacked 170
times,11 resulting in the pipeline shutting down for over 200 days,
costing Colombia approximately $500million in lost revenues and
considerable environmental damage (see fig. 2). For example, in early
November 2001, one attack resulted in 7,000 barrels of oil spilling over a
50-mile area- including the Arauca River-whichgreatly affected
agriculturalproduction in the area. However, despite the frequency of
attacks, between 1986 and 2001 Colombia's fiscalia-prosecutors-arrested
only three people of attacking the pipeline.

9Economic infrastructure includes roads, bridges, power lines, telephone
towers, reservoirs, and pipelines.

10For example, according to Defense, insurgent groups killed more than
40municipal legislators andninereporters in the department in 2002.

11When the pipeline is attacked, Occidental's instrumentation will sense a
drop in the pipeline's pressure. It then notifies theColombian Air Force,
which flies over thelocation to confirm the attack. Once confirmed,the
Colombian Armyis notified andsoldiers are sentto the location to sweepthe
area oflandmines andmakeit secure for Occidentalemployees to repair the
damage.

                    Figure 2: Oil Spill from Pipeline Attack

To regain control of Arauca and decrease economic infrastructure attacks,
the Government of Colombia developed a three-phased infrastructure
securitystrategy. The initialphase focused on securing the first 110 miles
of the pipeline, which was the section most often attacked. The second
phase was proposed to protectthe remaining 367 miles of thepipeline, and
phase three called for protecting 338 other critical economic
infrastructure targets throughout the country.12To help implement the
first phase of the strategy, Colombia asked the United Statestoprovide
military training and equipment to its army, and a memorandum of agreement
was signed between the two countries in 2003. As stipulated in the
agreement, a bilateral working group was formed, and it developed a plan
to protect the Cano Limon pipeline. The Narcotics Affairs Section (NAS) in
the U.S. Embassy, Bogota, administers the day-to-day aviation components
of the

12According to State officials, Colombia incorporatedthe infrastructure
security strategy into itsNational Security Strategy, which was finalized
in June2003.

                  Sources: State (photo); GAO (presentation).

Infrastructure Security Strategy

program, and the Military Group (MilGroup) in the U.S. Embassy, Bogota,
administers the day-to-day nonaviation components of the program.

U.S. assistance was directed toward Colombia's 18th army brigade
headquartered in the Department of Arauca, whose area of responsibility
includes allof Arauca and parts of the Boyaca and Norte de Santander
departments to the northwest. The 18th army brigade is charged with
providing roadway security, controlling Colombian-Venezuelan border
traffic, conducting counternarcotic operations, ensuring public order, and
securing the Cano Limon pipeline and other infrastructure.

In addition to U.S. assistance in Arauca, Ecopetrol and Occidental have
contributed financial support to the Colombian armed forces, as well as
community programs. In particular, each year Ecopetrol and Occidental
contribute about $8.65 million to help secure the Cano Limon pipeline,
according to Ecopetrol. This money supports the army, air force, and
fiscalia in the department and has been usedfor housing, food, land and
air transportation, communication equipment, gasoline, and medical
assistance. In addition, Occidental has built barrack facilities for
soldiers on an army base near the town of Saravena, and has established a
foundation to promote community development programs throughout the
region.

Future of Colombia's Oil Production

From 1999 to 2004, Colombia's oil production steadily declined. Much of
this was due to the depletion of Colombia's mature oilfields and thelack
of new major oilfield discoveries. Security for Colombia's oil industry
infrastructure, however, is an ongoing concern due to the threats posed by
insurgent groups operating in Colombia's oil production areas. With a
decreasing pool of proven oil reserves, industry experts have stated that
Colombia may become a net importer of oil by 2008. In an effort to attract
private investors to Colombia, the Colombian government implemented
regulatoryand institutional reforms to create a more conduciveclimate for
the exploration of oil reserves.13

13For example, in 2003 it moved regulatory responsibilities from the
state-owned oil company,Ecopetrol, to a newlycreated agency.Under the new
arrangement, Ecopetrol no longer has a mandatory share in joint
ventures,and oil companies may nowassume up to 100percent of investment
and riskactivities in all exploration and production contracts. In 2003,
Colombia surpassed its exploratory goal to drill 28 wells, but in 2004
drilled only 21, short ofits targetof 25.

  Helicopters and Other Equipment Were Delayed

In fiscal year 2002, the Congress provided $6 million to initiate training
of the Colombian Army units in Arauca, and in fiscal year 2003 an
additional $93 million was provided.14 Of this funding, State used $71
million to acquire two UH-60 Black Hawk helicopters, eight UH-II
helicopters, and related logistical support and ground facilities.
However, the helicopters were not delivered on schedule. The lack of
airlift capabilities has put the army at-risk for insurgent attacks and
limited the Colombian Army's ability to quickly respond to infrastructure
attacks. Defense used the remaining $28 million for U.S. Special Forces
training and equipment for the Colombian Army (see table 1); however, much
of this equipment has not arrived.

Table 1: U.S. Support for Protecting the Cano Limon Pipeline, Fiscal Years
2002 and 2003

                              Dollars in millions

                        Items purchased Cost Helicopters

                          Two UH-60 Helicopters $26.8

Eight UH-II Helicopters

Helicopter facilities

Helicopter maintenance and equipment

                                    Training

Equipment, ammunition, and parts

U.S. Special Forces training

Aerial eradication programa

                                  Total $99.0

Sources: State and Defense (data).

aFunds were used for converting the building contractors' living quarters
and related facilities for use by State's aerial eradication program.

142002Supplemental Appropriations Act for Further Recovery From and
Response to Terrorist Attacks onthe UnitedStates,Pub. L. 107-206, 116
Stat.820,855, and Consolidated Appropriations Resolution, 2003,Pub. L.
108-7, 117 Stat. 11, 176.

Helicopter Facilities Were Built, but the Helicopters Arrived Late

State built helicopter and barrack facilitiesona Colombian Army base near
the town of Saravena to support the 10 helicopters. The facilities were
completed in December 2004, but remained vacant for 5 months awaiting the
arrival of the helicopters. The UH-60Black Hawks and four of the UH-II
helicopters were delivered to Colombia in April 2005. They were moved to
Arauca in Mayfor training and air operations. In late June 2005, the
remaining fourUH-II helicopters arrived in Colombia and were moved to
Arauca in August.

The helicopter facilities include helicopter pads, a hangar, training
rooms, equipment storage, and building security. State also built barracks
with exercise rooms, kitchen and laundry facilities, and conference rooms
(see fig. 3). While the 10 helicopters will be stationed at the new
facilities and routine maintenance will occur at this location,
depot-level15 maintenance willbe done at the Colombian Army base in
Tolemaida.16

15Depot-level maintenance primarily entails rebuilding and overhauling
equipment.

16Tolemaida is approximately50 miles from Bogotaand the headquarters for
the Colombian Army AviationBattalion.

Figure 3: State-Constructed Facilities on an Army Base near the Town of Saravena

Heliport facility.

                         Barracks and helicopter pads.

Source: GAO.

Although the helicopters recently arrived in Colombia, they were expected
to arrive as early as May 2004.17However, some State officials said the
helicopters were always planned to arrive in December 2004. They noted
that the lead time to order the helicopters precluded an earlier delivery

17Several State and Defense documents listeda numberofdatesforthe
scheduled arrival of the helicopters, withthe earliest beingMay 2004.

date. State officials did not provide any planning documents that detailed
timeframes and milestones associated with the helicopter delivery, but did
provide documents coordinating the construction of facilities with the
arrival of the helicopters in late 2004. According to State officials,
negotiations over what type of helicopters to purchase caused some delay,
and problems with transportation and delivery accounted for the 4 to 6
month delay from the December 2004 timeframe.

Nevertheless, in the absence of the helicopters, the Colombian Army did
not move any of its other air assets, including similar helicopters, to
Arauca to assist in infrastructure security training18 and operations. As
a result, the army in Arauca responded to pipeline attacks using the
roads, placingthem at greater risk for ambushes by insurgents and taking
more timeto reach an area of an attack. Accordingto Defenseofficials,
Colombian Armysoldiers have been killed traveling on the roads in the
Arauca department.

U.S. Special Forces Provided Training, but Much ofthe Equipment Is Delayed

U.S. Special Forces provided training and equipment for about 1,600
Colombian Army soldiers to improve their abilityto act quickly in
minimizing terrorist attacks along the Cano Limon pipeline. In November
2002, a team of U.S. Special Forces traveled to Arauca to assess the area
and determine the training needs of the Colombian Army. In January 2003,
U.S. Special Forces started training in Arauca and planned for training to
continue through December 2004.19 U.S. Special Forces focused on helping
the Colombian Army take a more proactive and aggressive approach to defend
the pipeline; regain control of the area around the pipeline; and prevent,
interdict, and disrupt the insurgents before they attack the pipeline.
Training included developing quick reaction capabilities, small unit
tactics, planning and conducting operations, reconnaissance, collecting
and analyzing timely intelligence, and medical support.

U.S. SpecialForces also facilitated joint and combined operations between
the Colombian Army and police to restore public confidence and security
throughout Arauca. The U.S. Special Forces' civil affairs and
psychological operations officers helped the Colombian Armyimprove
relationships with the civilian population by hosting local events and
developing radio

18In April and November 2004, about 75Colombian Army soldiers
fromAraucawentto Tolemaida to conduct air assault training, however, it
was only for a 2-week period.

19Additionally, prior to training, the army unit wasvetted for human
rights issues.

broadcasts and leaflets. For example, officers assisted in providing
medical and dental exams and vaccinations to over 1,760 individuals during
a 2-day event.

Because the helicopters did not arrive untilmid-2005, U.S. Special Forces
extended their training in Arauca to overlap with their arrival. In a
March 2004 cable from the U.S. Embassy in Bogota, officialsrecognizedthat
ifthe U.S. trainers did not overlap withthe arrival of the helicopters in
Arauca, the Colombian Army units would not receive the appropriate
training. According to a MilGroup official, to extend the original
training funds through September 2005, the U.S. Special Forces had to
reduce the number of trainers and support staff in Arauca. Since the
helicopters have just arrived, U.S. Special Forces will only have 3 months
to provide the necessary operational training. AMilGroup official saidthey
would have liked to have had 6 to 9 months of training to ensure the
Colombian Army was fully capable of employing the helicopters to support
infrastructure protection and related combat operations. Again, however,
State could not provide us any documentation that coordinated the planned
arrival of the helicopters with the necessary training.

Defense also purchased equipment for the Colombian Army for use in Arauca,
but much of it has not arrived. Equipment purchased includes night vision
goggles, ammunition, weapons, helmets, and medical supplies. According to
the MilGroup,the delivery timefor some items is now almost 2 years because
of the demand for supplies created by U.S. military operations in
Afghanistan and Iraq. For example, night vision goggles for the Colombian
Army were ordered in late 2003 and a partial shipment arrived in July
2005.

  Improved Security and Governance in the Department of Arauca, but Challenges
  Remain

Despite the delays in the arrival of the helicopters and other equipment,
attacks on the Cano Limon pipeline have declined. Additionally, governance
and security in Arauca has improved, and new oil exploration is also
occurring due to improved security conditions. However, despite these
improvements, challenges remain, particularlyas more attacks on the
pipeline are occurring in the neighboring Department of Norte de
Santander. In addition, insurgents are attacking the electrical grid
system that provides energy to the Cano Limon oilfields. Finally, because
nearly all the $99 million in U.S. assistance will be obligated or
expended by the end of September 2005, and Colombia's capability to
operate and maintain the helicopters without U.S. support is limited,
sustainability of the progress made is uncertain.

Attacks onthe CanoLimon Attacks on the pipeline have declined since 2001,
until recently. As

Pipeline Have Decreased
illustrated in figure 4, attacks on the Cano Limon pipeline reached a high
of 170 in 2001. In 2002, the attacks dropped to 41; and in 2004, dropped
even further to17. However, in the first 7 months of 2005, attacks on
thepipeline are almost equal to all of 2004. State and Defense officials
said they were not sure why pipeline attacks were apparently increasing.

Figure 4: Cano Limon Pipeline Attacks, 1996-July 2005

                                  Attacks 180

                                      170

While attacks are decreasing on the Cano Limon pipeline in Arauca, more
attacks are occurring in the neighboring Department of Norte de Santander.
In the first 7 months of 2005, of the 13 attacks that occurred along the
pipeline, 9 were in Norte de Santander. About 200 miles of the pipeline
passes through Norte de Santander, and much of it is in rough mountainous
terrain. This makes getting to the affected areas difficult, which delays
repairs. Occidental officials said that in some cases, it takes up to 8
days to access, secure, and repair the damaged pipeline. In addition,
according to Occidental, attacks on the pipeline in the mountains are hard

                                      160

                                      140

                                      120

                                      100

                                       80

                                       60

                                       40

               20 0 1996 1997 1998 1999 2000 2001 2002 2003 2004

July 2005

Year

                   Source: Occidental Petroleum Corporation.

Attacks in Norte de Santander Have Increased

to contain as spilled oil runs down the mountains, causing environmental
problems.

Additionally, most of Norte de Santander is secured by a different
Colombian Army brigade, which has not received U.S. infrastructure
securitytraining. According to the MilGroup, U.S.Special Forces are trying
to determine if they can train additional soldiers in Norte de Santander.
However, no military training facilities exist in the department. In
commenting on this report, the MilGroup stated that NAS is studying the
feasibility of deploying some of the helicopters to this region to support
operations as required.

Insurgents Are Attacking the Electrical Grid System

In addition to pipeline attacks, insurgents are attacking the electrical
grid system that provides energy to the Cano Limon oilfield. Occidental is
able to produce 50 percent of its energy requirements; however, the
remaining 50 percent is purchased from the nation's electrical grid
system. According to a Colombian Army official, attacking the electrical
grid can shut down oil pumping completely.20 In 2002, eight towers were
destroyed within Arauca. Attacks on the electrical grid system spiked
upwards in 2003 to 23 and are increasing again as the electrical attacks
in the first seven months of 2005 have surpassed attacks in all of 2004
(see fig. 5). According to Occidental, as of July 2005 the attacks on the
electrical grid system have cost $117 million in lost production since
2002.

20When the Cano Limon oil pipeline is shut down because of an attack on
thepipeline, oil canstill be pumped intostorage tanksthat have a
7-dayholding capacity. However,when the electrical grid systemis attacked,
theoilwells cannot pump oil into the storage tanks, shutting down oil
production.

Figure 5: Electrical Grid System Attacks that Have Affected Occidental,
2000-July 2005

                                   Attacks 25

                                       23

The Colombian government has made security and the re-establishment of
state presence in Arauca a priority. According to a State official, before
the United States provided any equipment or training to the Colombian Army
in Arauca, many changes were already occurring due to interventions by the
Colombian government. For example, in January 2003, the Colombian
government stripped the Arauca department of controlover its oil royalties
to restore fiscal responsibility to the department. Additionally, in order
to disrupt systemic corruption, in November 2003, the government arrested
about 30 public officials, including a city mayor, who were connected to
insurgent groups.

To strengthen the army in Arauca, the Colombian government changed its
leadership. Historically, according to the MilGroup, the army had been
passive and reactive in part because Colombia'smilitary structure holds
leaders personally responsible for the loss of soldiers and equipment. The
MilGroup and State officials noted that President Uribe replaced some of
the army commanders in Arauca with others who were more aggressive

                                       20

                                       15

                                      10 5

                           0 2000 2001 2002 2003 2004

July 2005

Year

                   Source: Occidental Petroleum Corporation.

Strong Colombian Leadership and U.S. Special Forces Training Contributed
to Increased Security in Arauca

and proactive against the insurgent groups, and he extended the current
Brigadier General's term in Arauca because of his strong leadership
abilities.

In addition to improvements made by the Colombian government, U.S.
SpecialForces training has improved the Colombian Army's capabilities. In
the past, the Colombian Army lacked tactical and operation planning,
civilian-military programs, and ground mobility. According to the
Colombian Army Colonel in Saravena, due to U.S. Special Forces training,
his troops are better able to infiltrate areas, react to situations, and
work withthe civilian population while respecting human rights. For
example, in April2005, the Colombian Army unit near the town ofSaravena
captured 18 insurgents, and an additional 5 insurgents turned themselves
in during the first 4 months of 2005.

Moreover, better coordination exists among the Colombian Army, police, and
the fiscalia. Both army and police officials acknowledged they have
established a good working relationship, which has helped in neutralizing
the insurgent groups. The Colombian Army and police perform daily foot
patrols and carry out joint missions. Because of this teamwork, the army
and police have been able to seize rockets and landmines, and capture
insurgents. In 2001, the fiscalia were incorporated into the Colombian
Army operations and now accompany units on investigations. Since 2002, the
fiscalia have prosecuted597 individuals, compared to only three arrests
between 1986 and 2001.

Finally, interactions between the Colombian Army and the civilian
population have dramatically improved. In 2001, neither the civilian
population nor the army would travel along the roads or in the town of
Saravena because it was not safe. Today, however, the Colombian Army holds
meetings with various communities, provides entertainment, administers
medical care, and performs daily foot patrols in Saravena.

New ExplorationIs Occurring

New oil exploration is occurring in Arauca due to increased security.
Prior to 2004, Occidental did not look for additional oilreserves due to
safety concerns, even though the Cano Limon oilfield will probably only
produce oil near its current rate for a few more years. Today, Occidental
is able to increase its exploration within Arauca, by working with the
Colombian Army and police. According to Occidental, it drilled 40 new
wells in the Cano Limon oilfield this year and is making an effort to find
new oil reserves. Additionally, according to Occidental, the Colombian
Army's

protection of the Cano Limon pipeline makes it possible for their
employees to safely repair the pipeline and get it operational quickly.
The safety of Occidental employees has been a concern in the past. For
example, in2002 a bus carrying 30 Occidental employees was attacked by
insurgents, leaving 2 dead, 12 injured, and 3 missing.

Occidental acknowledged that while exploration is becoming more attractive
in Colombia, challenges remain. For instance, according to Occidental,
some of the best prospective locations for oilin Arauca are located in
coca-growing areas controlled by insurgents. The U.S. Embassy, Bogota also
reports that although oil companies have stated they are concerned about
the financial losses and damage caused by ongoing attacks to the oil
sector, the problem is now being contained, and security concerns no
longer outweigh profit possibilities in the country.

Sustainability of Progress Uncertain

As we reported in 2000 and 2003, the Colombian Army did not have the
capability to fully operate and maintain the U.S.-provided helicopters it
had. At that time we recommended that the Secretary of State, in
consultation with the Secretary of Defense, examine U.S. assistance
programs to the Colombian Army to (1) establish clear objectives for the
programs and (2) estimate future funding requirements for U.S. support.21
The Secretary has not addressed our recommendation. We added that this
analysis should designate specific performance measures for assessing
progress, define the roles of U.S. personnel and contractors, and develop
a timeline for achieving the stated objectives. On our visit to Colombia
in April2005, a NAS official told us Colombia will not have a sufficient
number of trained helicopter pilots until fiscal year 2008, and this
assumes that noneleave or failthe training program.22 In addition, NASand
Defense officials estimate Colombia willnot have enough trained mechanics
until at least 2010.

Additionally, the reduction in U.S. Special Forces trainers will slow
training. Due to commitments in Iraq and Afghanistan, U.S. Special Forces
willbe reducing personnel throughout Colombia by over 50 percent

21See GAO-01-26 and GAO-03-783. In 2003, we noted the start of the
infrastructure security program and discussedthe implications of providing
additional helicopters to Colombia.

22According to a U.S. Embassy, Bogota, cable to State, the helicopters
providedto help protect the pipeline require 50 pilots and additional
mechanics tomaintain them.

starting in October 2005. According to a MilGroup official, training
willbe suspended in Arauca until early 2006 when U.S. Special Forces is
planning to deploy a training team to Arauca for about 10 weeks. The
MilGroup told us that training for the Colombian Army units in Arauca
ideally should occur through fiscal year 2010.

Conclusions
Colombia's original plan to secure a 110-mile portion of the Cano Limon
pipeline is nearing completion. The helicopters have arrived, the
Colombian Army protecting the pipeline has received training, and the
Colombian government has improved security and governance in Arauca.
Pipeline attacks in Arauca have decreased since 2001 and new oil
exploration is occurring.

Despite these improvements, more attacks are occurring on the pipeline in
Norte de Santander and on the electrical grid system in Arauca, and State
has not addressed how it will help Colombia sustain the progress made. As
we reported in 2003, Colombia does not have the capacity to sustain the
U.S. helicopters provided to the Colombian Army without continued U.S.
support. The 10 helicopters providedfor the pipeline security program will
exacerbate this problem. Moreover, because the U.S. Special Forces are
reducing the number of trainers throughout Colombia, training additional
personnel for infrastructure security and sustaining the training already
provided to units in Arauca will be problematic.

  Recommendation for Executive Action

Because Colombia continues to face serious obstacles in its long-standing
insurgency and in protecting the Cano Limon-Covenasoil pipeline, we
recommend that the Secretary of State, in consultation with the Secretary
of Defense, develop a plan for transitioning the pipeline security program
in Arauca to the Government of Colombia. The plan should delineate (1) how
the helicopters provided for pipeline security will be used and
maintained,(2) how theprogress madeto datewill be sustained, and (3) an
expected completion date for U.S. involvement.

Agency Comments and
State provided written comments on a draft of this report (see app. II).
State commented that the report provided an accurate assessment of the

Our Evaluation
program and agreed that challenges remain and the Government of Colombia
will need continued assistance to support the program. State concurred
with the report's recommendation to develop a plan for

transitioning the pipeline security program to the Government of Colombia,
including the aviation component. State stated this plan should be
incorporated into a larger United States government strategy to transition
responsibilities for key U.S. funded programs to the Colombian government.

However, State expressed some concern that we overemphasized the time
required to deliver the helicopters, but it did not provide any additional
information for us to modify our discussion. The point is that the planned
rapid reaction capability for the pipeline security program was not
available until almost 2-1/2 years after the program began.

Defense did not comment on this report, but along with State, provided
technical comments, which we incorporated as appropriate.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from
the date of this letter. We are sending copies of this report to
interested congressional committees and the Secretaries of State and
Defense. We willalso make copies available to others upon request. In
addition, this report willbe available at no charge on the GAOWebsite at
http://www.gao.gov.

If you or your staff have any questions concerning this report, please
call me at (202) 512-4268 or [email protected]. Key contributors to this
report were Al Huntington, Hynek Kalkus, Kerry Lipsitz, and Summer
Pachman. Contact Points for our Offices of Congressional Relations and
Public Affairs may be found on the last page of this report.

Jess T. Ford, Director International Affairs and Trade

Appendix I

Scope and Methodology

To determine how the U.S. funding and resources provided to secure the
first 110 miles of the Cano Limon pipeline were used, we reviewed
Departments of State and Defense project information, reports, budget
documents, memoranda, cables, and related documents. We assessed budget
and funding documentation regarding the uses of the assistance, and found
the data sufficiently reliable for our purposes. We interviewed
knowledgeable officials involved in the program in State's Bureau for
International Narcotics and Law Enforcement Affairs and Bureau of Western
Hemisphere Affairs. We also interviewed officials from the Defense
Security Cooperation Agency and U.S. Southern Command.

To determine what progress has been made and the challenges that remain
for securing the Cano Limon pipeline, we examined reports, cables, and
related documents prepared by cognizant State and Defense officials.
Specifically,

o
To determine the reliability of the data provided on pipeline and
electrical grid system attacks, we interviewed officials from the U.S.
Embassy, Bogota; Ecopetrol; and Occidental Petroleum Corporation to
determine how they collected and verified the data. We also reviewed
State, Ecopetrol, and Occidental documents related to infrastructure
attacks and cross-referenced the information with comments made by
officials. We found the documents and officials reported similar numbers.
Based on this review, we concluded that these data were sufficiently
reliable for the purposes of this report.

o
We discussed challenges of the program with officials in State's Bureau
for International Narcotics and Law Enforcement Affairs and Bureau of
Western Hemisphere Affairs. Wealso spoke with Defense officialsfrom the
U.S. Southern Command. On our visit to Colombia in April 2005, we
interviewed Colombian government officials from the Ministries of Defense
and Justice, and the National Planning Department. We also interviewed
officials from Ecopetrol and Occidental Petroleum Corporation, which
operate the Cano Limon pipeline and oilfield.

o
We traveled to Bogota in April2005 and met with State and Defense
officialsat the U.S. Embassy,includingthe Narcotics Affairs Section and
the Military Group. We also spoke with the Ambassador, the Deputy Chief of
Mission, and staff from the economic and political affairs offices.

Appendix I Scope and Methodology

o
Finally, we also traveled to Saravena, Arauca, and toured the
Stateconstructed facility for stationing the helicopters and met with
various U.S. officials involved in the pipeline security program.We
interviewed the local commanders of the Colombian Army and Colombian
National Police, and spoke with U.S. Special Forces trainers who were
conducting training.

                                  Appendix II

                     Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix II
Comments from the Department of State

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