Ecopetrol announces steep losses for 2015

On Sunday, Colombian state-owned oil company Ecopetrol reported losses of $1.26 billion during 2015, a decline of 170% from the profits Ecopetrol recorded in 2014. The Colombian oil company blamed the collapse in global oil prices, attacks on the country’s oil infrastructure, and new accounting standards, for the losses.  It goes without saying then that Ecopetrol will not be paying dividends for 2015 to the 400,000 shareholders of the company. The oil company will defend this decision and present its 2015 financial results during a March 31 shareholder meeting.

Semana noted that the losses reported by Ecopetrol are much worse than markets had expected. Nonetheless, Ecopetrol president Juan Carlos Echeverry was quick to stress that the El Niño weather phenomenon, the devaluation of the Colombian peso, and the closing of Colombia’s border with Venezuela, also contributed to Ecopetrol’s difficulties in 2015.

It will come as a relief to Ecopetrol that the world’s oil markets rose more than 5% on Monday, driven by talk in Latin America and among OPEC producers about seeking a higher base price for crude oil. The Brent crude oil price rose above $40 per barrel.

Given the tenuous status of the Colombian oil industry as it tries to weather this global oil crisis, Juan Carlos Echeverry called on the guerrilla groups the ELN and the FARC not to attack Colombia’s oil infrastructure. These appeals came off as both desperate and yet also a tacit recognition that the asymmetrical nature of these attacks means that Ecopetrol is powerless to prevent them.