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.
The end of December and time for our monthly review of how the peace process has evolved. Frankly, poorly, but it was a light month as everyone got ready for the holidays: even guerrilla want to be home for Christmas it seems. But I also thought it time to look back at the year leveraging a statistical analysis by Indepaz as well as our own database.
We assume investors view royalties as a cost-of-doing business without regard to value judgements like positive or negative or, as the title suggests, kind or unkind. In fact, our heading for this quarter’s review of company financial results is a play on words. For a number of fields, the ANH changed the way royalties are collected (in kind versus in cash) and this changes results presentations for many companies.
A tumultuous month starts with a high-profile kidnapping, passes through suspension of talks with both ELN and alias Mordisco, but ends with everyone back at the table. In the middle, Petro finally realized what everyone in Colombia already knew: that Danilo Rueda was not the right person for High Peace Commissioner. Government Chief Negotiator for the ELN process, Otty Patiño now has the hot seat.
This question seems at the very least premature. While most Colombians (it appears but maybe not) are counting down the days (984 as of time of writing), oil and gas companies have long-term investments. Committing to them today means living with the consequences beyond August 6th, 2026. Who will be making the decisions on August 7th or, if “who” is too complicated, what kind of government will we have?
Just as we were about to write about the impact of taxes on Ecopetrol’s 3Q23 results, the Colombian Constitutional Court decides to undo the royalty no-deductibility rule from last December’s tax reform. Instead, we will briefly discuss the tax impact and then focus on ECP’s results, which got the press’s negative attention. Very happy to have to reorient this article in return for what we estimated as US$2B of less tax.
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