Ecopetrol Drops Most Since 2007 on Colombian Oil SelloffMatthew Bristow and Andrew Willis
Colombia’s state-controlled oil company Ecopetrol SA fell the most in seven years as a sell-off by crude producers led the country’s biggest stock market rout in more than a year.
Ecopetrol, the Andean nation’s biggest company, tumbled 9.6 percent to close at 1,880 pesos in Bogota, the biggest drop since November 2007, as crude prices continue to slide. The company’s 55 percent decline over the last 12 months makes it the world’s worst performing oil company with a market value of more than $10 billion.
“Everyone is affected by prices but, on top of that, they have production issues and their exploration record year to date is not that special either,” said Rupert Stebbings, managing director of equity sales at Bancolombia SA, speaking by phone from Medellin. “They’ve had problems with security and the indigenous population, on top of everything else.”
Of 23 exploratory wells drilled by the company in the first nine months of the year, three were successful while four are still under evaluation. The fall in oil prices has coincided with continued attacks on pipelines by Colombia’s Marxist guerrillas and community protests that have reduced oil output for the first time in almost a decade.
Colombia’s benchmark Colcap index fell 3 percent, its biggest drop this year, led by the selloff in oil companies. Shares in Pacific Rubiales Energy Corp. dropped 6.3 percent to the lowest level since 2009 while Canacol Energy Ltd. fell 17 percent.
Brent crude slid below $65 a barrel today for the first time in five years as OPEC cut the demand forecast for its crude oil to a 12-year low. Oil accounts for about half of Colombia’s exports as well as about half of its foreign direct investment.