Ecopetrol SA, Colombia’s largest oil company, said first-quarter profit rose 37 percent as an $80 billion investment plan this decade increased production and oil prices advanced.
Profit climbed to 4.27 trillion pesos ($2.42 billion) from 3.11 trillion pesos a year earlier, the Bogota-based company said today in an e-mailed statement. The result compared with the average forecast of 4.10 trillion pesos by three analysts surveyed by Bloomberg.
“Oil was well over $100 a barrel and there have been strong production increases,” said Valeria Marconi, an analyst at Correval SA brokerage in Bogota.
Ecopetrol is scouting for oil in Colombia, Brazil and the U.S. Gulf of Mexico as part of the investment effort to increase output to 1.3 million barrels of oil a day in 2020. Production rose to 743,400 barrels a day of equivalent oil and natural gas in the quarter from 686,300 barrels a year earlier, the company said in the report released after the close of regular trading.
Ecopetrol rose 2.2 percent to 5,700 pesos at the close in Bogota. The shares have climbed 36 percent this year, outpacing a 14 percent gain in Colombia’s benchmark COLCAP stock index.
Rebel attacks on pipelines increased in the first quarter in Colombia, slowing gains in Ecopetrol’s production, said Mauricio Restrepo, an analyst at brokerage Bolsa y Renta in Medellin, Colombia. Sabotage of energy towers, pipelines, roads and bridges rose last year for the first time since 2008, according to government statistics.
“Security has again become a challenge,” Restrepo said. “Oil companies are visible targets.”
Production was little changed from the fourth quarter, when output was 741,700 barrels a day. Chief Executive Officer Javier Gutierrez said in March that guerrilla attacks won’t derail plans to increase the company’s production this year to 800,000 barrels of oil and natural gas a day.
The government is making additional investments to guarantee security, Mines and Energy Minister Mauricio Cardenas told oil executives in March in Cartagena, Colombia. In February, oil output from all companies producing in Colombia fell 4.8 percent to 896,000 barrels a day after pipeline sabotage.
The nation is the largest oil supplier in South America after Venezuela and Brazil.