As Ecopetrol flounders, so too does the Colombian Peso

The bad news just keeps on coming for Colombian state oil company Ecopetrol. On Monday, Ecopetrol announced a massive reduction in its planned investments for 2015, down 25.8% from this year, to a total of $7.86 billion. Its production targets, though also down year-on-year, are more stable: a drop from 770,000 barrels per day to 760,000 barrels per day. Even the company’s press release implied that Ecopetrol is figuring things out on the fly, “The investments approved for 2015 are aligned with the new long-term (2030) corporate strategy, which is currently being developed, focused on generating value and sustainability.” Ecopetrol, under pressure from its board, will also implement a plan to cut operational expenses by $3.565 billion.

In a related news item, Ecopetrol has started selling off some of its Brazilian assets. The company’s General Manager in Brazil, John Clark, told Petronoticias that the Colombian oil company is already fielding bids. Ecopetrol’s activity in Brazil is focused primarily on exploration.

Business Insider reported on the various shocks that the Colombian peso and the broader Colombian economy are undergoing. The report mentioned the latest news concerning Ecopetrol, the largest company in Colombia, but it mostly focused on the damage done to the Colombian peso. The opening line put it best: “Falling oil prices are crushing a golden child of Latin America, Colombia.” It only gets worse, as Business Insider went on to say that the only currency experiencing anything similar is Russia. The report noted that Colombia’s trade deficit has ballooned from $66.2 million in September 2013 to $449.6 million in September 2014. Despite calming words from Colombian Finance Minister Mauricio Cardenas, Business Insider predicted that the Colombian Central Bank will act soon to curb the volatility in the country’s currency.