Ecopetrol reported that it will allocate 80% of its investments scheduled for 2020 to Colombia, which as a whole would total between 2,500 and 3,000 million dollars.
Before the global Covid-19 pandemic, the company had planned to spend a range of $ 4.5 to $ 5.5 billion.
Ecopetrol is a vertically integrated oil and gas company with a presence mainly in Colombia and with activities in Peru, Brazil, Mexico and the United States.
Currently, the Colombian nation owns 88.49% of the company’s voting capital.
For now, in the first quarter of 2020, the company’s investments amounted to $ 940 million, an increase of 45% year-on-year, mainly due to the payment of contractual obligations derived from the agreement signed with Shell for the Gato do Mato project in Brazil.
For the current year, the plan includes investments in blocks that are active or that have been assigned for the development of exploration and development activities.
Ecopetrol and its adjustments
Of the investments in the first quarter of this year, 87% was assigned to the ascending segment. Likewise, 83% of the investment was destined to growth opportunities focused on increasing production and reserves.
Finally, 57% of the investment was allocated in Colombia and the remaining 43% abroad.
Ecopetrol: financial results
During that quarter, the execution of investments did not report significant impacts due to the fall in crude oil prices and the measures taken by the government to prevent the spread of COVID-19.
With the adjustment in its investment plan, the new stage includes: the postponement of projects that are not profitable under the new market conditions, until international oil prices recover; and deferral of business continuity investments that can be optimized or shifted over time without compromising the integrity and reliability of assets.
This stage also takes into account the impacts on the execution of projects based on the measures taken as a result of the COVID-19 pandemic.
The new investment plan prioritizes profitable growth projects in the new market conditions (67%) and operational continuity to guarantee integrity, efficiency and reliability throughout the value chain (33 percent).
Investments will continue to focus on Colombia (80%), protecting regulatory projects, social investment, unconventional reservoir studies and gas production projects that guarantee supply to Colombian regions.
Investments abroad will ensure compliance with the company’s contractual obligations outside of Colombia.
In November 2019, the company’s Board of Directors approved between 4,500 and 5,500 million dollars for the 2020 investment plan.
At that time, Ecopetrol planned to produce between 745,000 and 760,000 barrels of oil equivalent per day during 2020. It also hoped to allocate 78% of these investments to projects in Colombia and the rest to the positioning and development of operations in the United States, Mexico and Brazil.