Ecopetrol reports drop in reserves

On Tuesday, Colombian NOC Ecopetrol released a report it had filed with the US Securities and Exchange Commission containing key reserves figures.

According to the document, its 1P hydrocarbons reserves fell 14% in 2016 compared to 2015, down from 1.849 billion boe to 1.598 billion boe. The figures take into consideration its assets in Colombia and Peru, as well as those of its subsidiaries and affiliates Hocol, Savia, Equión and Ecopetrol Ámerica.

The drop in total reserves occurred despite Ecopetrol having made discoveries in 2016, as well as boosting its recovery rates in some areas. New reserves amounting to 186 million boe were not enough to cover the decline.
The company stated that low oil prices played an important role in the shrinking of its reserves, causing an estimated decrease of up to 202 million boe. The price used for the valuation was USD 44.49 per barrel.

Considering the fall in per-barrel prices by 20% in 2016 compared to 2015, Ecopetrol reported its reserves replacement ratio at -7%. However, without taking the effects of prices into account, the NOC’s reserves replacement ratio is 79%, and its reserves-to-production ratio is just 6.8 years.

The assets that performed the best in the review were Colombia’s Chichimene and Rubiales fields, both directly operated by the NOC.

DeGolyer & MacNaughton and Ryder Scott Company audited 99% of Ecopetrol’s reserves, using US Securities and Exchange Commission methodology and standards.