Colombia's Ecopetrol increases 2020 investment despite low prices

BOGOTA: Colombia's state-run oil company Ecopetrol on Friday increased its investment plan for the year to between $3 billion and $3.4 billion, in a bid to assure business sustainability despite low prices for crude.

The company had originally planned to invest up to $5.5 billion this year but later lowered the figure twice, down to between $2.5 and $3 billion, as oil producers reeled from a price crash and fall-out from the coronavirus epidemic.

"Based on a detailed review of the company's portfolio, the progress of interventions and the gradual recovery of economic activity, the current outlook allows investment to be increased to a new level," the company said in a statement.

"The new plan assures the sustainability of the business in an environment of low prices, prioritizing cash generation opportunities and better break-even prices, maintaining the growth dynamic with a focus on execution of development plans for strategic assets and the preservation of the value of assets."

The new investment outlook is based on an average Brent price estimate of $38 per barrel, the company said, and a break-even price close to $30.

Some 80% of investment will take place in Colombia, Ecopetrol said, with the remainder to be spent principally on the development of reserves in the United States and Brazil.

Production and exploration are the focus of 78% of investment, it added, and the company will produce an average of around 700,000 equivalent barrels per day this year.

The company will maintain investments of $221 million in its interest in Texas' Permian Basin and $13 million to continue efforts to advance non-conventional pilot projects in Colombia.

The company plans to drill 13 exploratory wells this year, 11 in Colombia and two in Brazil.

Ecopetrol said it did not anticipate any new debt requirements for the remainder of 2020.