Colombia's Ecopetrol Narrowly Avoids Loss in Q2

Colombia's state oil firm Ecopetrol posted a 99% year-on-year decline in net profits in the second quarter to pesos 25bn ($6.6mn), it reported on August 4, while core earnings (Ebitda) slumped 76% to pesos 2 trillion.

The company, which has upstream, midstream and downstream operations, suffered a 54% decline in sales revenues to pesos 8.44 trillion. This decline was on the back of weaker prices for most of its products and steep falls in sales volumes for gasoline, petrochemicals and other refined fuels, due to the Covid-19 pandemic's impact on markets. Its crude oil exports surged 20% year on year to 475,000 barrels of oil equivalent/day, however.

Ecopetrol was also supported by a 7.7% growth in domestic gas sales to 80,800 boe/d, which it attributed to the launch of a liquid petroleum gas plant in Cupiagua and the acquisition of Chevron's stake in the Guajira fields by its subsidiary Hocol. Gas prices were also stable, as they are mostly fixed in dollars under long-term contracts that do not take oil prices into account.

"Gas continues to be a strategic pillar for the Ecopetrol group," the company said. "During May and June, it was key in guaranteeing energy security in Colombia through the sale of natural gas for thermal power generation, proving to be a flexible business option during the crisis situation."

Production averaged 677,500 boe/d in the second quarter, down 6.3% yr/yr. Oil extraction was down 8.4% at 545,000 boe/d, but this was partly offset by a 3.4% increase in gas output to 132,500 boe/d. Ecopetrol aims to boost production to 700,000-720,000 boe/d by 2022.

Ecopetrol's results were notably stronger than its Latin American counterparts Petroleos Mexicanos and Brazil's Petrobras, however, which swung to net losses of $1.9bn and $525mn respectively in the quarter.