Colombia was a charter member of the Washington Consensus and although some “true believers” of former-president Álvaro Uribe might disagree with me, the country has followed the liberal economic order for more than 25 years, certainly as long as I have been here. Now that consensus is almost certain to change.
Juan Pablo Ruiz is my favorite Colombian environmentalist because he is completely rational, completely pragmatic without losing one bit of his passion and commitment. Recently, he wrote a pair of columns directed at Colombia’s future president that touched on the strategy of reducing demand or supply of fossil fuels. I might have written them or at least something like them.
It is only the first quarter so our simple projections are highly suspect, and we will concentrate on relative measures. Conclusion: higher prices are a good thing even for Ecopetrol’s feeble Refining Line-of-Business (LoB). There. You don’t have to read the article. Except to look at the graphs.
Here we are again. A Manichean contest between left and right with both sides casting the other in the role of Satan. On Sunday, May 29th, Gustavo Petro and Rodolfo Hernández won the right to a runoff on June 19th to see who will be the president of Colombia.
The first chart may be hard to read but it shows that Colombia-focused E&Ps are controlling costs even as prices rise, so netback is rising meaning more profit for the shareholders.
The ACP issued a press release on the last day of its Grand Forum which covered events of the day but also wrapped up the major themes. We have already covered Day 2 so here we translate the broader ideas and provide our own commentary.
On May 1st2021, the Colombian government lifted most restrictions related to Covid-19. It also stopped issuing daily statistical bulletins. Two years and two months after it began, the pandemic seems to be over in Colombia. We assume (hope) that this will, therefore, be our last publication of these statistics and we only do so because they show the complete course of the disease in Colombia.
New presidential election polls have come out and, once again, they predicts that Gustavo Petro will win in a runoff on June 19th. We also recently published a roundup of the leading candidates opinions of the oil and gas industry and all were in favor except Petro. That paints an unpleasant future for the industry but this may be exaggerating the risks.
We updated our Ecopetrol Line-of-Business (LoB) financial charts for fully year 2021, which now include ISA broken out separately. The effect on Income Statement numbers is only from September so about 1/3 of what we should see in 2022.
Oil prices were up again last week, Brent closing Friday at US$111.70 (according to FT.com). This is not a record or even a record for the period since Russia’s invasion of the Ukraine on February 22nd. But the 13-week Moving Average hit US$102.36 for the first time in almost 8 years and the 52-week moving average was US$81.52 for the first time since 2015, nearly seven years. These signals may mean some changes in producer and consumer behavior. But probably not yet in Colombia on the consumer side.
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