Arauca

Caño Limón made Arauca and nearly broke it. When Occidental Petroleum struck oil in 1983, the field returned Colombia to net-exporter status and transformed this border ranching territory into a petrostate in miniature. The 771-kilometer pipeline to Coveñas on the Caribbean opened in 1986; over thirty years, it has carried 1.5 billion barrels. At peak, 90% of departmental government revenue came from oil royalties. But the pipeline also became a target—guerrillas bombed it over 1,000 times, and the department became a theater of armed conflict that continues today.

Eighty percent of Arauca remains under oil concession, with 25 new blocks programmed for exploration. In 2020, the Carlyle Group acquired Occidental's Colombian assets, and SierraCol Energy now operates Caño Limón. Meanwhile, Venezuelan migration has reshaped demographics: 10-15% of residents are Venezuelan nationals, fleeing crisis across a porous border just 10 kilometers from the oilfields. Agriculture offers diversification potential—cacao, African palm, rice—but lacks the infrastructure investment that oil royalties promised but rarely delivered to rural communities.

By 2026, Arauca will test whether resource dependence can yield to economic diversification before reserves decline. SierraCol is investing in enhanced recovery to extend field life, but the long-term math is clear: oil wealth that funded conflict must eventually fund transition. If agricultural exports grow and royalty funds finally reach smallholders, Arauca could model post-petroleum development. If not, 90% royalty dependence becomes a stranded-asset problem for an entire department.