Colombia's Ecopetrol Eyes $3.5-4.0bn in 2021 Investments
Colombia's EcoPetrol is preparing to invest between $3.5bn and $4.0bn next year, with the bulk of spending set to go towards its domestic business, the state oil and gas producer reported on December 14.
Under the plan, approved by EcoPetrol's board of directors, 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/day in 2021, 81% of which will be oil and 19% natural gas. This compares with 663,000 boe/d last year.
If investments continue on track, EcoPetrol expects to be producing at a rate of 750,000 boe/d by 2023.
Some 77% of investment will be ploughed into EcoPetrol's upstream business, to accelerate the development of some 3.7bn boe in reserves and resources. The company intends to sink nine exploration wells during the year, eight of which will be in Colombia in the Orientales, Mid-Magdalena Valley, Low-Magdalena Valley and Sinu-San Jacinto basins. It will also spend some $600mn on scaling up unconventional development in the US Permian basin in Texas.
A further 14% of spending will be directed towards expanding the company's gas chain, as well as various clean energy initiatives. It aims to spend $200mn on energy efficiency projects and incorporating renewable energies, and a further $150mn on decarbonisation and $90mn on efficient water management operations. Some $80mn will be invested in technology and innovation, focusing on digital transformation, enhanced recovery and the energy transition.
EcoPetrol is targeting positive free cash flow and a gross debt to Ebitda ratio of under 2.5 in 2021, on the back of strong cash generation and the harnessing of efficiencies.
"The investment plan for 2021 seeks to recover the company's growth path, enhance its competitiveness, enlarge the sustainability agenda and establish the course towards the energy transition, in line with our strategic pillars of cash flow protection, cost efficiency, capital discipline and profitable and sustainable growth," CEO Felipe Bayon Pardo commented. "With this investment plan we are using our energy to continue constructing a country of all, for all."