COLOMBIA REBELS VOW OIL ATTACKS AHEAD OF CLINTON VISIT

BOGOTA (Reuters) - Just days ahead of President Clinton's visit to Colombia,
Marxist ``petro-guerrillas'' have vowed to continue their biggest-ever
offensive against one of the Andean nation's top oil fields and main
pipelines in protest at ``U.S. intervention''.

In an undated communique, obtained by Reuters on Monday, the rebels appeared
to link the sabotage to Clinton's Aug. 30 visit but also pledged to continue
attacks after that trip.

``The National Liberation Army rejects outright Plan Colombia and will
maintain its offensive before and after Aug. 30 against the Cano Limon
pipeline in protest at U.S. intervention,'' the communique said, referring
to U.S. aid to a $7.5 billion plan to combat drug trafficking and leftist
guerrillas in Colombia.

State-run oil company Ecopetrol said Monday that production at the country's
second largest oil field, run by U.S. multinational Occidental Petroleum
Corp (NYSE:OXY - news), remained paralyzed after three weeks.

The 490-mile (780 km) pipeline that pumps crude from the 105,000 barrel per
day Cano Limon field in northeast Arauca province to the Caribbean coast
port of Covenas also remained crippled after being blown apart by more than
20 rebel bombs since July 23, most recently on Saturday.

Oil is Colombia's top export earner, bringing in $2.28 billion revenues in
the first half of this year and more than one-third of the total value of
exports.

The oil industry, which produces some 710,000 bpd, is also one of the main
magnets for foreign investment in this nation ravaged by three-decades of
civil conflict.

A unit of the National Liberation Army (ELN), Colombia's second main rebel
group, has claimed responsibility for the longest sustained offensive on the
pipeline since it opened in the mid-1980s.

Bad For Oil Investment

``Plan Colombia'' is the name given by President Andres Pastrana to a
U.S.-backed carrot-and-stick strategy designed to fight the booming drug
trade and force the country's estimated 22,000 Marxist guerrillas to
moderate their radical socialist demands at slow-moving peace talks.

Last month, Clinton signed off on a record $1.3 billion package of mostly
military aid which forms the backbone of Plan Colombia, whose total cost is
estimated at $7.5 billion over three years.

Pastrana launched peace negotiations with the larger, Soviet-inspired
Revolutionary Armed Forces of Colombia (FARC) in January 1999 but has still
not agreed terms for the start of talks with the Cuban-influenced ELN.

The Cano Limon-Covenas pipeline has been blown up at least 57 times this
year, according to Ecopetrol. Last year, it was dynamited a record 76 times.

The current wave of attacks is, however, by far the most serious in the
15-year history of the pipeline and the field.

Three weeks ago, Occidental declared force majeure on production, a legal
move allowing temporary suspension of contract obligations. The measure has
only been declared five times since the field opened in 1985 and any
previous force majeure declaration had lasted eight days at most.

``This is a very complex situation. It's a bad sign for investors. If this
situation persists then oil companies will not invest in Colombia,'' Senator
Hugo Serrano, a leading member of the Senate Energy Commission, told Reuters
Monday.

According to government figures issued earlier this month, foreign oil
companies pulled out more than $424 million investments from Colombia's oil
industry in the first quarter this year.

Reserves Running Low

Ecopetrol chiefs, however, highlight the more than 20 association contracts
signed with foreign companies in the year so far, compared with just one in
the whole of last year, as evidence of an upturn in the oil industry's
fortunes.

Almost all those contracts are for six-year exploration contracts followed
by 22-year production contracts.

Colombia, which currently has around 2.3 billion barrels of proven reserves,
is set to become a net oil importer by 2005 if no major new finds come on
stream before then. Experts estimate Colombia may have some 37 billion
barrels of potential oil reserves but much of that lies in the 50 percent of
the country controlled by the FARC and ELN.