Colombian protests thwart Ecopetrol’s operations
Colombian energy company Ecopetrol said May 26 ongoing demonstrations in the country have caused disruptions across its entire value chain.
Strikes across Colombia greeted an April tax reform proposal. Working to alleviate chronic debt, Colombian president Ivan Duque proposed a higher tax for middle- and high-income earners, sparking a major public backlash.
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Ecopetrol said its upstream, midstream, downstream and commercial and marketing segments were all impacted by the social unrest. Apart from road blockades, the company said there have been isolated incidents involving its infrastructure.
Upstream, the company said the most significant impact was on natural gas, primarily at its Cusiana and Florena fields. Midstream, Ecopetrol said some pumping systems have been idled, while refinery throughput was lower because of the lack of crude oil production.
On demand, the company said diesel was 33% lower, gasoline was 15% lower and jet fuel was 1% lower than it expected for the month.
As a result of the disruptions, the company said it was working to make adjustments to offset the negative impact of the situation.
“As of the date of this release, Ecopetrol currently estimates that these adverse consequences should not have a material impact on Ecopetrol's ability to fulfill its business plan targets for 2021,” the company said. “Nonetheless, Ecopetrol cannot offer any assurance as to when the social unrest will end and whether it will not continue to have a negative impact on its operations.”
In December, the company said it was ready to invest as much as $4bn during 2021, with the bulk of spending set to go towards its domestic business.
Around 80% of investment will be allocated to projects in Colombia and the rest mainly to ventures in the US and Brazil. The company aims to produce 700,000-710,000 barrels of oil equivalent (boe)/day in 2021, 81% of which will be oil and 19% natural gas. That compares with 663,000 boe/day last year.