Colombia’s Ecopetrol Cuts 2015 Output Goal 7.2% From This Year

Ecopetrol SA has cut next year’s output target as Colombia’s state-controlled crude producer struggles to make major discoveries amid a slump in prices, and suffers from pipeline attacks and community blockades.

The company aims to produce a daily average of 760,000 barrels of oil equivalent next year, down 7 percent from this year’s target, the company said today in a regulatory filing. In 2013, the producer predicted that output would reach an average of 1 million barrels per day in 2015.

Investment spending next year will total $7.86 billion, down 26 percent from this year’s projected budget as the company implements a cost-cutting program, Ecopetrol said. Spending will be concentrated on production, finishing the modernization of its Cartagena refinery and strengthening transport capacity, according to the filing.

Some of the funding for the investments will come from the sale of non-strategic assets, Ecopetrol said. Shares in the Bogota-based company have fallen 61 percent in dollar terms over the last year, making it the world’s worst performing oil and gas producer with a market capitalization over $10 billion.

The company’s board of directors said Dec. 12 that it will search for a new chief executive officer to replace Javier Gutierrez, 63, who has led the company since 2007.

Marxist rebels have continued to attack oil pipelines this year as Colombia’s largest guerrilla group, the Revolutionary Armed Forces of Colombia, or FARC, conduct peace talks with the Colombian government in Havana. Output this year was also hit when an indigenous group blocked Ecopetrol personnel from entering their area to repair a pipeline.

Crude oil dropped to the lowest level in more than five years today after the United Arab Emirates said OPEC won’t rein in production in response to the fall in prices.