Bloomberg
Business published an in-depth article analyzing the situation of
Ecopetrol, the Colombian state-owned oil company. Bloomberg explains that
Ecopetrol’s share price in US$ has fallen by 54% in the last year, worst among
its peers, despite simultaneously being the most profitable company. According
to Bloomberg, Ecopetrol owes this disparity to its lack of exploration success
in recent years, and its proven oil reserves are just 50% of its peers. Greg
Lesko, an investor in emerging-market equities, warned, “There
have been a lot of headlines about awesome projects in Colombia over the last
five years. Many haven’t turned out to be so great.”
The article went on to trace the
history of Ecopetrol, from its IPO in 2007 when its shared sold for 1,400 pesos
per share, to its peak at 5,850 pesos in 2012. It then recounted the impact of
attacks by illegal armed groups and social conflicts on the company’s oil
production. Observers of Colombia’s oil industry are now waiting on the company’s
new president, Juan Carlos Echeverry, to detail Ecopetrol’s new corporate strategy.
In related news, Canadian oil
company Canacol announced
that it would reduce its investment in Colombia and Ecuador by 44%, or $84
million, in 2015, as a result of lower oil prices. Canacol expects to produce
between ten and twelve thousand barrels equivalent per day.
In mining-related news, El
Colombiano reported on the fragility of Colombia’s unique paramo
ecosystems. According to the article, 40% of the mining titles issued by the
Colombian government are for municipalities that contain the paramo ecosystem.
The article stresses the need for a balance between environmental and economic
concerns in this vital Colombian ecosystem.
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