August 12, 2019 / 10:38 PM / 4 months ago

UPDATE 1-Colombia's Ecopetrol 2nd-qtr net profit edges down to $1 bln

(Adds CEO quote, details of results, background)

BOGOTA, Aug 12 (Reuters) - Colombia’s state-run oil company Ecopetrol SA said on Monday its second-quarter net profit fell 0.9% to 3.48 trillion pesos ($1.03 billion) from the year-ago quarter on lower prices for its products.

Net profit in the first half rose 1.6% compared with the first half of 2018 to 6.23 trillion pesos, the company said in a statement to the country’s financial regulator.

The results show “financial and operational strength” in the face of challenges, Chief Executive Felipe Bayon said in the statement. “The financial results for this period continue to be impacted unfavorably by the international price environment, principally naphtha and gasoline, combined with the appreciation of heavy crude that serves our refineries.”

Earnings before interest, taxes, depreciation and amortization fell 3.5% in the quarter which ended in June from the same period in 2018, to 8.3 trillion pesos.

Crude production rose in the first half to 726,000 barrels per day (bpd), Ecopetrol said, from 711,000 bpd in the first half of 2018. That met its 2019 target output of between 720,000 and 730,000 bpd.

Ecopetrol has said it will invest $3.5 billion to $4 billion in 2019, more than the previous year, as part of an ambitious plan to boost production and exploration to replenish dwindling oil reserves.

But Ecopetrol invested just $1.39 billion between January and June, according to Monday’s statement.

Some 80% of the investment will be focused on upstream projects, mostly in Colombia, Ecopetrol has said, while another portion will be spent in the United States, Brazil and Mexico.

In July Ecopetrol announced it had formed a drilling partnership with Occidental Petroleum Corp to develop its acreage in the Midland portion of the Permian shale field for up to $1.5 billion.

Ecopetrol’s efforts to invest some $500 million in exploration of unconventional deposits hit a snag last month when Colombia’s environmental authority suspended its evaluation of the company’s request to start a fracking pilot project until an administrative court reinstates rules for tapping unconventional deposits.

The company is plagued by the regular bombing, attributed to leftist rebels, of various of its pipelines. The most recent attack took place over the weekend.

$1 = 3,382.71 Colombian pesos Reporting by Julia Symmes Cobb and Nelson Bocanegra Editing by Tom Brown and Richard Chang

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