Pipeline attacks in Colombia hit Ecopetrol production

Colombia’s state-owned oil and gas company Ecopetrol SA (NYSE:EC) he revealed that its operations were adversely affected by the attacks on the Cano Limon-Covenas and Bicentenario pipelines, as well as a nationwide truckers’ strike. According to the company, hydrocarbon production could be affected in the coming days, paralyzing fuel supplies.

“The unavailability of the aforementioned pipelines due to the attacks, added to the difficulty in moving hydrocarbon and LPG tankers, may affect the production of crude oil and gas in the coming days, as well as the supply of refineries and fuels in Barrancabermeja and Cartagena. in different parts of the country,“, the company said in a statement on Wednesday.

Last month, Ecopetrol reported a 17% drop in second-quarter net profit, citing difficult market conditions. Ecopetrol’s Q2 2024 net profit was 3.38 trillion pesos ($830.9 million), while H1 net profit fell 24% to 7.39 trillion pesos, up from 9.75 trillion pesos in the first six months of 2023.

“Ecopetrol faced a challenging environment, which remains affected by various external variables such as the revaluation of the Colombian peso and inflationary pressures,” CEO Ricardo Roa said in the report.

Ecopetrol is not alone, however, with several Latin American energy companies reporting losses: Mexico’s Pemex reported a swing to a net loss of $14 billion, while Brazil’s Petrobras (NYSE:PBR) reported first quarterly loss from the third quarter of 2020.

A week ago, Ecopetrol lost two members of the board following the company’s decision to withdraw from a $3.6 billion offer to buy a stake in Texas shale assets from Occidental Petroleum (NYSE:OXY). According to the two members, the deal was considered “fundamental” to the company’s future, and its finances would deteriorate without the resources it would have secured.

Ecopetrol shares are down 21% year-to-date, despite the company paying a very generous dividend yield of 38%.

By Alex Kimani for Oilprice.com

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