Colombia is looking to extend a decade-long oil expansion by improving Ecopetrol SA (ECOPETL)’s community relations and environmental permitting as shares of the state-run producer slump to a four-year low.
Ecopetrol is creating regional operational centers run by a vice president with managerial and decision-making powers, Mines and Energy Minister Amylkar Acosta, who sits on Ecopetrol’s board, said. The changes include strengthening the company’s VP office with environmental responsibilities, partially aimed at speeding up permitting, Acosta said.
“The board asked the administration to give this top priority,” he said in a telephone interview yesterday. “Delays are often because companies don’t carry out their tasks.”
Colombia’s oil output has been rising since 2005 as companies such as Ecopetrol and Pacific Rubiales Energy Corp. tap areas once overrun by guerrillas. Now an increase in rebel attacks on infrastructure, community protests and permitting bottlenecks threaten to crimp production.
The Cano Limon-Covenas pipeline restarted operations May 25 after a two-month shutdown caused when the forest-dwelling Uwa group prevented repairs following a rebel attack. The Uwa say the pipeline has polluted their indigenous homeland.
Shares in Ecopetrol fell 0.9 percent to 3,340 pesos in Bogota yesterday, the lowest since August 2010. The stock is down 17 percent in the past year, the only oil producer among 15 global peers tracked by Bloomberg to decline in that period.
Colombia produced an average of 1,019,000 barrels a day in the first half of June, with the mines and energy ministry now forecasting 1,007,000 barrels a day on average this year, Acosta said. The finance ministry, which Acosta said is more conservative in its estimates, is targeting 981,000 barrels a day this year from 1,006,000 last year, according to a June 17 report published on its website.
Production fell below one million barrels a day in March, April and May of this year, according to the hydrocarbon agency.
The changes at Ecopetrol don’t include replacing Chief Executive Officer Javier Gutierrez, Acosta said.
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