The company, MinHacienda and those sympathetic to the government quickly blamed Ecopetrol’s 43% drop in Net Income in 2023 on oil prices. Petro attributed it to the end of fossil fuels. The opposition blamed government mismanagement. Who is right or perhaps, what is the right balance between the various partial explanations?
With Colombian President Gustavo Petro now nominated for a Nobel Peace Prize, his desperation level has risen considerably while the counterparties have no intention or, indeed, pressure to concede on any point.
MinHacienda Ricardo Bonilla created a minor kerfuffle this week by saying Colombia’s oil production hit 788,000 barrels a day in 2023. It didn’t. As the graph shows it only got to 777,000 barrels a day, 1.4% less but still the highest since “The Plague Year” of 2020.
The major Colombian-focused publicly traded oil and gas companies have communicated their 2024 guidance. With the president talking down the industry every chance he gets and few or no friends in the public sector, one would not be surprised to see much negative sentiment. How do they really feel or, at least, what did they share with investors?
Last week we published an article about the surge in LNG imports in the second half of 2023. That mirrored a surge in electricity generated by imported natural gas that we discussed in ePower Colombia, our sister website. El Niño caused much of the increased demand for gas but we wanted to check how Colombian production fared last year. Were really imports necessary?
January was supposed to end with an extension of a ceasefire with the ELN. New head of the peace process, Otty Patiño even announced they had an agreement. But in an eerie repeat of last January’s debacle, whatever deal had been worked out was dismissed by alias Antonio Garcia, head of the guerrilla group. Near midnight on the 31st, they agreed to keep talking but only until February 5th.
Former Ecopetrol CEO Juan Carlos Echeverry has written what might be considered a best seller in Colombian non-fiction terms, creating a minor sensation in social networks like X. Saving Ecopetrol: Leadership in times of crisis is part management self-help, part corporate history, part diatribe against Petro, part manifesto for a post-Petro energy policy.
Despite uncertain future cash flows as President Gustavo Petro dismantles everything the NOC has accomplished in the past 20 years and the whiff of scandal around CEO, Ricardo Roa, Ecopetrol’s share price is higher than it was when Petro was sworn in on August 8th, 2022. What do minority investors see that we poor mortal scribes do not?
Whatever Gustavo Petro’s strengths as a politician might be (and we will leave that for another day), I would not hire him as a marketer. Who came up with “Empresa Integral de Energía de Colombia” as the new name for Ecopetrol? And what will it mean for the Colombian industry?
Theoretically, production should be up by an additional 0.3% thanks to an extra day in February. For crude that could be another 775,000 barrels and over US$60M in additional industry revenue! This and other more useful forecasts in our annual review.