Ecopetrol boosts investment, output targets for 2022

Colombia's Ecopetrol is boosting investment and targeting a production increase of up to 10pc to 780,000-800,000 b/d of oil equivalent (boe/d) in 2022 compared with 2019 levels.

The state-controlled company, the largest producer in Colombia, registered 725,000 boe/d of output in 2019, within its targeted range, up from 720,000 boe/d in 2018.

The firm plans to invest $13bn-$17bn in the 2020-22 period, compared with $12bn-$15bn in 2019-21. Exploration and production, mainly in Colombia, will account for 83pc of the investment through 2022.

Among the focuses of Ecopetrol's planned upstream growth are offshore gas exploration with $200mn in investment over the three-year period, and unconventional pilot projects in the Middle Magdalena Valley basin, leveraging knowledge gained from its participation in the Permian basin in Texas.

In terms of reserves, Ecopetrol is targeting a minimum 100pc organic growth, not including the effect of oil price changes.

Downstream, Ecopetrol is striving for refinery throughput of 370,000-420,000 b/d in 2022, compared with a 2019 record average of 374,000 b/d. The company is seeking to reduce sulphur content to 10ppm in both diesel and gasoline over the medium term, compared with December 2019 levels of 11ppm for diesel and 95ppm for gasoline. Both are already below Colombia's minimum regulatory standards of 50ppm and 300ppm, respectively, Ecopetrol noted.

The company highlighted the medium-term goals in its quarterly earnings released late today. Last year's net profit hit a six-year high of 13.3 trillion pesos ($4.04bn), compared with 11.6 trillion pesos in 2018.

Ecopetrol exported 403,500 b/d of crude in 2019, up 3.3pc from the year before, with the Asia-Pacific market accounting for 46.3pc of the total, following by the US Gulf coast with 36.8pc.

The discount to Brent for Ecopetrol's crude basket narrowed to $5.60/bl in 2019, compared with $8.50/bl in 2018. The fourth quarter 2019 average marked a record low discount of $4.70/bl, compared with $10.10/bl a year earlier, the company reported.

By Patricia Garip