Colombia's Ecopetrol Shows Highest Annual Hydrocarbon Output Since 2015

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Colombia's Ecopetrol (NYSE:EC) (Bogota) scored positive results in fourth-quarter 2023 despite the drop in oil prices. Oil production and refining remained solid throughout the year.

Ecopetrol reported net income of 4.2 trillion Colombian pesos (US$1.07 billion) in the fourth quarter and 19.1 trillion Colombian Pesos (US$4.9 billion) for all 2023. However, these financial results were 38.3% and 42.9% lower than the ones scored for the respective periods of 2022.

Lower oil prices were among the main reasons behind the income drop, with an annual price drop of US$17.5 per barrel. Despite this, the company obtained the second-best financial results in its history in 2023.

This was the outcome of higher oil production and robust refining. During Q4, Ecopetrol produced 758,000 barrels of oil equivalent per day (boe/d), about 5.2% more than during the same period in 2022. Meanwhile, the company's total output in 2023 stood at 736,600 boe/d, the strongest volume going back to 2015.

Higher oil production was backed by the start of operations of the first fluid treatment train in the Caño Sur field and stronger flows from Ecopetrol Permian. The latter is the Colombian company's subsidiary in the United States, which in 2023 registered an output of 66,400 boe/d, a 75.7% increase compared to the previous year.

These achievements offset losses caused by Colombian security issues and unrest, such as attacks on the Caño Limon pipeline, which impacted the Gibraltar field, and road closures.

For this year, the company has set a production guidance between 725,000 and 730,000 boe/d.

New exploration campaigns accompanied the efforts in production. In 2023, the company drilled 23 new exploratory wells, of which 11 have been declared successful. Together, they could add between 100 million to 150 million barrels of oil equivalent. Among the discoveries made last year is Glaucus-1, an offshore gas field, operated by Shell plc (NYSE:SHEL) (London, England), in which Ecopetrol holds a 50% stake.

On the downstream front, the oil company had a refining throughput of 429,000 barrels per day (BBL/d) in Q4 and 419,600 BBL/d in 2023, about 84,000 BBL/d and 62,000 BBL/d more than compared to the same periods in the previous year, respectively. Refining average operational availability was 95.3% throughout 2023, marking the highest level in the past five years.

Among the downstream enhancements launched last year were the commissioning of the new sour water management system at the Barrancabermeja refinery and the decarbonization and production of sustainable aviation fuel (SAF) at the Cartagena refinery.

Finally, Ecopetrol continues to expand its renewable energy solutions. By the end of last year, the company accumulated 472 megawatts of non-conventional renewable energy sources in operation, construction, and execution. Non-conventional renewable energy sources include solar, wind, biomass and hydrogen.

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