FACTBOX-Key political risks to watch in Colombia

By Jack Kimball

BOGOTA, March 4 (Reuters) - Peace talks with Marxist rebels, clashes between rival crime gangs, early maneuvering for the 2014 elections and growing demands on oil and mining companies from workers and rural communities are the key political risks to watch in Colombia.

PEACE TALKS

President Juan Manuel Santos is taking the biggest gamble of his career by negotiating with rebels of the Revolutionary Armed Forces of Colombia, or FARC.

While the talks have reportedly been cordial so far, statements show a wide breach that may be hard to bridge.

Both sides traded barbs in February, with Santos saying rebels should compensate thousands of farmers who were forced to flee their lands, and the FARC charging that Santos' statements were hampering the delicate talks.

Santos says peace can only be achieved if negotiators stick to the agreed agenda - land issues, the drug trade, ending the war, the rebels' future participation in politics, and compensation for victims. He has opened the door to a popular vote on any accord but rejected a guerrilla demand for a constitutional assembly.

The last serious attempt to negotiate peace with the FARC was from 1999 to 2002. That ended in failure and the government at the time was fiercely criticized for allowing rebels to regroup in a demilitarized region the size of Switzerland.

The collapse of those talks paved the way for Alvaro Uribe to become president in 2002 and unleash a U.S.-backed military offensive over two terms that more than halved the number of FARC fighters through killings, desertions and arrests.

Santos was elected in a landslide in 2010 after promising to keep up Uribe's tough stance on security. But his approval ratings have fallen in recent polls with many Colombians believing that security gains under Uribe were being reversed.

Uribe has become the most vocal critic of Santos - his former defense minister - and accused him of being too soft on the FARC. Santos is irritated by the criticism, saying that Colombia is now a safer country than when he took office.

Santos has vowed to step up military operations to try to pressure the FARC to sign a deal. Since the end of a unilateral FARC ceasefire on Jan. 20, fighting has heated up.

What to watch:

- Whether peace talks move forward.

- Renewed attacks by an energized FARC.

- Growing criticism of Santos' security policies.

2014 ELECTION

Santos, 61, has been coy about whether he will seek another four-year term at the election in May 2014, saying he will not discuss it until the second half of this year. The tone of his appearances in the last few weeks, however, suggests he will run again.

He must declare his candidacy six months before the election, but weak poll numbers mean he probably needs to start gaining momentum now. The outcome of peace talks will be a decisive factor in whether he can win.

Names are already being thrown around in case he doesn't stand again. Santos has said he has talked with German Vargas Lleras about the 2014 elections and many analysts saw the current housing minister's lateral move from the interior ministry last year as setting the stage for a possible presidential bid.

In the coming months, public officials who want to run for elected office must start quitting to be eligible to stand.

Opponents will try to capitalize on whatever comes out of the peace process, the slowing economy, social problems such as poverty, and a ruling by a Hague-based U.N. court that removed resource-rich fishing areas from Colombian waters.

The main challenger next year will likely be an ally of Uribe, who is still popular. But Uribe's support does not guarantee a win - in local elections in October 2011, Uribe's candidates for mayor of Bogota and Medellin both lost.

What to watch:

- Signs that Santos gives on possible re-election bid.

- Which, if any, ministers step down ahead of poll.

CRIMINAL GANGS

A new generation of criminal gangs - created in part by the demobilization of drug-linked, right-wing paramilitaries over a decade ago and the remnants of traditional cocaine cartels that were crushed in the 1990s - are a growing threat and could pose a fundamental risk to long-term stability.

The groups are consolidating. There were about 13 gangs in 2011, down from 43 in 2006, according to the Indepaz think tank.

Colombia has recognized that the bands, believed to operate in most of the country's provinces, may be a greater threat than the FARC, and Santos has made defeating them a priority.

More than a decade of U.S.-funded anti-narcotics operations have reduced cocaine output in Colombia, but it is still believed to be the world's top producer. FARC rebels team up with drug-trafficking gangs and ex-paramilitaries in some areas, and battle for control over smuggling routes in others.

Security forces have dealt major blows to the criminals, including the capture of a leading Colombian drug trafficker in neighboring Venezuela with the help of Venezuela's government as well as British and U.S. agencies. But the decentralized nature of the gangs makes them difficult to fight.

What to watch:

- Growing influence of criminal gangs.

- More blows to major drug lords.

OIL AND MINING - PROTESTS AND ATTACKS

Improved security has led to billions of dollars in investment by oil and mining companies. Colombia is thought to have attracted as much as ${esc.dollar}16 billion in foreign investment in 2012, up from around ${esc.dollar}2 billion in 2002. Now that the country is safer, rural communities are demanding more jobs, repairs to damaged infrastructure and better living standards.

Protests coupled with continued attacks on oil and mining operations by rebels are a headache for the scores of foreign investors in Latin America's No. 4 oil producer, although the government continues to encourage further energy exploration throughout the country and off its Caribbean coast.

Although production shutdowns have usually been short-lived, they have started to weigh more on companies' bottom lines.

At the end of December, Colombia reached its production target of 1 million barrels of oil a day. At the same time, Finance Minister Mauricio Cardenas lowered the government's average output goal for 2013 to 981,000 barrels a day, in part because of increased rebel attacks.

The coal and coffee sectors have also faced problems.

The world's fourth-largest coal exporter lost an average of around 180,000 tonnes of production and about ${esc.dollar}1.5 million in royalties daily in February as a result of a walkout at Cerrejon and a loading suspension at Drummond, the two top producers.

Thousands of Colombian coffee growers blocked roads and prevented beans from getting to port late last month to demand more government aid after being hit by years of poor weather.

What to watch:

- More attacks on oil and mining operations.

- Government reaction to increased rebel assaults. (Reporting by Jack Kimball; Editing by Kieran Murray and Eric Beech)