Ecopetrol SA, Colombia’s largest crude producer, dropped the most among major oil companies on concern it will struggle to meet output targets amid rebel bombings, community protests and failure to make significant discoveries.
State-owned Ecopetrol, the world’s 17th-largest producer by market value, fell 0.3 percent to 3,150 pesos at 1:55 p.m. in Bogota, heading for a three-day drop of 5.8 percent. Over the past month, Ecopetrol has slid 13 percent, the worst performance among oil companies worth more than $50 billion.
Guerrilla attacks have hurt the company’s output, with June production close to 770,000 barrels of oil equivalent per day, the company said in reply to e-mailed questions. Ecopetrol, which targets output of 819,000 barrels per day this year, is seeking to offset the loss with a boost from its Castilla and Chichimene fields in the Meta province, Hector Manosalva, Ecopetrol’s vice president of exploration and production, told reporters in Bogota July 9.
“As you start seeing bits of news of how the production could be under, and you get closer to when they have to report earnings, you see the noise is getting louder,” said David Santos, a senior analyst at Compass Group SA, a money manager in Bogota. “You see lots of reasons to go out and sell but few reasons to go buy.”
Ecopetrol is scheduled to report earnings on July 31 according to its website.
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.
There were 57 attacks on Colombian pipelines in the first five months of this year, according to Ministry of Defense data, as Colombia’s largest rebel group, the Revolutionary Armed Forces of Colombia, or FARC, seeks to strengthen its position in peace talks with the government. Colombia’s government has started exploratory talks with the National Liberation Army, or ELN, to reach a peace deal with the nation’s second-largest guerrilla group.
The company reached a price-to-earnings ratio of 9.9 after the sell-off, compared with 11 for Petroleo Brasileiro SA, according to data compiled by Bloomberg.