Colombia's Ecopetrol Continues to Seek Renewable Sources in 2023

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Researched by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Colombia's majority state-owned oil company Ecopetrol S.A. (NYSE:EC) (Bogota, Colombia) released its financial results for the fourth quarter of 2022, reporting record net income, stable oil production, and plans to focus on renewable energy.

Ecopetrol said it had registered a net income of 6.85 trillion Colombian Pesos (US$1.4 billion) in the fourth quarter, about 12.7% more than in the same quarter of 2021.

Additionally, the company closed 2022 with a total net income of 33.4 trillion Colombian Pesos (US$6.9 billion), amounting to the best financial results in its history and double the amount generated in 2021.

The key factors that helped achieve this outcome were high hydrocarbon prices globally, stronger oil output from the company's assets, and robust refinery runs.

Meanwhile, oil production stood at 720,100 barrels per day (BBL/d) in the fourth quarter, on par with the previous quarter and about 3.7% higher than in fourth-quarter 2021. Throughout 2022, crude output averaged 709,500 BBL/d, some 30,500 BBL/d more than in 2021.

The higher output was partly due to stronger oil flows from Ecopetrol's Permian operations, which were 32,900 BBL/d in the fourth quarter, a 101.8% increase from the same period in 2021.

Nevertheless, Ecopetrol expects to continue increasing its production in the Permian and Caño Sur in 2023, launching projects to raise output from the Rubiales, Piedemonte, Quifa, Arauca and Akacias fields.

In the downstream sector, Ecopetrol registered a refining pace of 344,000 BBL/d in the fourth quarter and 357,500 BBL/d throughout 2022, the highest volume in the last three years.

In 2022, the 200,000-BBL/d Cartagena Refinery processed oil at a pace of 139,800 BBL/d, about 2% lower than in 2021. Meanwhile, the 250,000-BBL/d Barrancabermeja Refinery processed 217,700 BBL/d in 2022, its highest volume in three years.

Ecopetrol also is focusing heavily on the renewable sector and its environmental targets. By the end of last year, Ecopetrol exceeded its annual emission-reduction target, with a 416,672 tons of carbon dioxide-equivalent (tCO2e) cut, about 59% higher than expected.

Additionally, the company has been developing its hydrogen capacity. In March 2022, Ecopetrol launched a pilot project to produce green hydrogen "under industrial conditions, and the acquisition of knowledge for the development of the first industrial-scale projects that are expected to begin operating between 2025 and 2026."

The "industrial-scale projects" are two megaprojects, each of which will produce 9,000 tons per year using 60 megawatts (MW) of electrolysis.

Ecopetrol also started construction on two hydrogen generation and refueling stations, one with 165 kilowatts (kW) of electrolysis for the production of 22 tons per year, and another with 50 kW of electrolysis for the production of 7 tons per year. The hydrogen produced will be used to refuel buses and light vehicles.

Ecopetrol also is identifying potential "white hydrogen" resources across Colombia by conducting surface and subsurface sampling in three basins, where it found positive results. For more information on white hydrogen, see February 27, 2023, article - Hydrogen from Natural Sources? 'White' Hydrogen Lurks Under the Ground and Under the Radar.

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