Ecopetrol faces trouble as slump continues

The Colombian government has lost more than USD 100 billion in revenues after the country’s oil boom did not deliver, and the low oil price wiped out 90% of state-owned Ecopetrol’s value.

At its peak in 2012, Ecopetrol was the world’s fifth-most-valuable oil company. Its market capitalisation has fallen to USD 14.5 billion, from USD 136.7 billion in 2012. Its shares have also fallen 74% since 2013, when the company sold a stake in its electricity-producing arm, Isagen.

The company’s original production target for 2015 of 1 million barrels of oil equivalent per day was changed to 760,000. Investment spending will be USD 7.86 billion, a 26% drop from last year.

Ecopetrol bought 10% stakes in two blocks in Angola’s offshore Kwanza Basin in July 2014, but the wells turned up dry. Domestic output, meanwhile, has been hit by attacks from the Revolutionary Armed Forces of Colombia on pipelines and infrastructure, as well as a dispute with the indigenous group U’wa living in the northeast, who forced Ecopetrol to dismantle its gas drilling operations in their area in May.

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