Ecopetrol’s (NYSE:EC) board of directors voted in the government’s official candidate for the role of company president. Former Finance Minister Juan Carlos Echeverry takes the wheel of the NOC at one of its most complex moments.
The graph shows Ecopetrol’s attributed Net Income to its Refining and Petrochemicals line of business for the full year 2014 and prior years. The good news is that things are not as bad as last year. The bad news is fairly obvious: it still lost nearly US$450M.
Ecopetrol posted a steep drop in profits in 2014 as the fall in the price of oil and a rise in costs took a hit on the company’s financial results.
Ecopetrol (NYSE:EC) grew its P1 reserves to 2,084mmboe in 2014, an increase of 5.7% compared to the previous year. Growth mainly came from revisions in existing fields and its reserves/production ratio is now 8.6 years.
Ecopetrol (NYSE:EC) has deeply cut its 2015 Capex and wants to reduce its operational costs by 30% as well, but it will still destine US$200M to offshore development and drilling.
Ecopetrol has secured a US$1.925B load to focus on its 2015 investment on pipeline development and developing production in its aging fields, while some are questioning the reason if not the need.
Despite enacting a cost cutting program, Ecopetrol (NYSE:EC) says it is planning to keep its production at the projected level of 710,000 bd, assuming an international oil price of US$40-US$50.
Ecopetrol (NYSE:EC) has been hit hard by guerrilla attacks, a poor discovery record and now the fall in oil prices. But it is a similar fate for other Latin American NOCs, if not worse. Petrobras (NYSE:PBR) has been rocked by corruption scandals and Pemex’s ability to function in a privatized market is questionable as the oil price slide cuts into its budget. Let us not even mention PDVSA.
Ecopetrol (NYSE:EC) outgoing president Javier Gutiérrez says that the NOC saw the price slide coming, and that the company is in good standing to endure even worse conditions.
The general manager of the Barrancabermeja Refinery shot back at critics saying that the project has not been frozen nor canceled, but still awaits definitions from the Ecopetrol (NYSE:EC) board of directors.
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