Ecopetrol SA (ECOPETL) and Pacific Rubiales Energy Corp. (PREC), Colombia’s two largest crude producers, fell the most in almost two months as the country cut its oil production forecast on rebel bombings and licensing red tape.
State-owned Ecopetrol, the world’s 14th largest producer by market value, fell 3.8 percent to 3,505 pesos at 12:55 p.m. in Bogota and earlier declined 5.1 percent, the biggest intraday loss since April 22. Pacific Rubiales retreated 6.5 percent to 38,780 pesos and was down as much as 11 percent.
Pipeline interruptions caused by rebel attacks and community blockades as well as environmental bottlenecks are behind a cut in the government’s 2014 production estimate. Colombia probably will produce an average of 981,000 barrels a day, according to a plan published on the Finance Ministry’s website, compared with a 1.1 million-barrel projection a year ago. Government dividends from Ecopetrol probably will fall 22 percent, it said.
“For Ecopetrol, it’s the announced reduction in dividends expected for 2015” that’s pushing down the stock, Maria Velasquez, an analyst at Medellin-based brokerage Serfinco, said by telephone. “The reduction in the production forecast for 2014 may also be affecting Pacific.”
The government’s take from Ecopetrol is set to fall to 8.4 trillion pesos ($4.4 billion) in 2015 from 10.8 trillion pesos this year, according to Finance Ministry estimates.
The drop reflects “the expected decrease in production this year, the decrease in Colombia’s crude price basket and greater production costs, which will impact profit in 2014 and will be distributed in 2015,” it said in the financial plan.
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