Colombia's Ecopetrol Shines in Third Quarter

---

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Ecopetrol (Bogota, Colombia) reported positive third-quarter 2022 financial results, with high net income and strong oil production and refining amid government calls for the phase-out of fossil fuels.

The energy company reported this month that it obtained revenues of COP 43.4 trillion (US$8.7 billion) and a net income of COP 9.5 trillion (US$1.9 billion) in the third quarter.

This financial result is the outcome of the increase in crude and natural gas prices due to international geopolitical developments and a positive exchange rate. Additionally, stronger sales volumes due to higher demand for refined products and oil production helped prompt up revenues.

On the exploration front, Ecopetrol reported six new discoveries across Colombia in the eastern plains, the lower Magdalena valley and offshore. New discoveries are key for the South American nation as its oil reserves have dwindled over the last few years, raising doubts about the industry's long-term survival.

Meanwhile, Ecopetrol's overall oil production averaged 545,400 barrels per day (BBL/d). The number includes not only Ecopetrol's output but also that of its subsidiaries in Colombia and abroad, such as Ecopetrol America (Houston, Texas) and Ecopetrol Permian (Houston). This volume is about 2.2% higher than in the same period last year.

For its part, natural gas output stood at 175,000 BBL/d oil equivalent and about 16.9% higher than in 3Q21. Combining both volumes, Ecopetrol produced 720,000 BBL/d oil equivalent in 3Q22, representing the strongest production pace since 1Q20.

Ecopetrol's production in its Permian asset was one of the biggest successes for the company, with an oil production of 28,500 BBL/d, about 68% higher than in 3Q21. Additionally, the recovery of the Cupiagua and Apiay oil fields, following maintenance works, also allowed the company to increase production in the last quarter.

Elsewhere, downstream operations likewise recorded significant gains and positive results in the last quarter. According to the Colombian company, Ecopetrol's combined throughput stood at 395,000 BBL/d, "the highest ever recorded" based on the financial reports.

The 200,000 BBL/d Cartagena refinery was operating at full capacity by mid-September, following the end of works that increased its refining throughput by 50,000 BBL/d. This allowed Colombia to have a refining average of 422,000 BBL/d in September.

Additionally, the 250,000 BBL/d Barrancabermeja refinery also reached historical refining rates in the last quarter, with 231,000 BBL/d processed in those three months. The higher refining output resulted from the maximization of the availability of local and imported crude, as well as increased operational availability, which stood at 96.2%.

Yet, Ecopetrol's positive results contrasts the government's energy vision, as the president has recently called for the "disconnection of hydrocarbons." Colombian President Gustavo Petro has said at the COP27 conference in Egypt that the world should "stop consuming oil and coal in the short term" and that the world should "devaluate the economy of hydrocarbons."

Since being elected, Petro has been critical about fossil fuels, setting a cloud of doubt over new hydrocarbon projects. It remains to be seen what will be the government's domestic policies on the hydrocarbons sector.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).