Colombia’s largest crude oil producer Ecopetrol has dropped the most this month among fellow major oil companies, local news reported on Thursday.
Ecopetrol, the world’s 14th largest producer by market value, fell .3% to $1.67 on Wednesday afternoon, moving towards a three-day drop of 5.8% according to Bloomberg News.
Ecopetrol’s current year -to-date production is close to 770,000 barrels of oil per day, thought the company hopes to increase production to 819,000 barrels this year.
The cause of Ecopetrol’s rapid descent can be traced to the relentless guerrilla attacks on Colombian oil pipelines that have stifled the company’s output abilities. When production is stalled for even a day, Colombia’s total oil production is slashed by 7%, amounting to around one million barrels a day according to Ecopetrol.
The past month has seen Ecopetrol fall 13%, categorizing it as the worst performance among oil companies worth more than $50 billion according to Bloomberg.
In 2013, Ecopetrol claimed to have contributed over $17 billion to government revenues, making up 18% of the national budget, despite renewed guerrilla violence coupled with a lack of major oil discoveries as of March 2014.
Guerrilla violence targets oil pipelines
Multiple attacks at the hands of armed forces from the country’s two largest guerrilla groups, the FARC and the ELN, have contributed greatly to Ecopetrol’s slump in production. Maintaining an active presence in the region, the groups have been known to target energy infrastructure.
57 attacks have been recorded in the first five months of 2014, according to data from Colombia’s Ministry of Defense.
The Cano-Limon Covenas pipeline, Colombia’s largest oil pipeline, was halted for months after a series of attacks that forced the closure of the operation for repairs.
The pipeline reopened on May 25, but underwent several attacks in June that forced operations to close once again. The Colombian economy suffered losses of $8 million per day during the pipe’s inactivity.
In 2013 there was a reported 259 attacks on oil pipelines in Colombia, the highest number posted in a decade according to international news agency, Reuters.
The attacks in 2013 showed a 72% increase from the year before.
- Ecopetrol posts biggest oil industry slump after rebel bombings (Bloomberg News)
- Colombian rebels torch convoy repairing Ecopetrol pipeline (Reuters)
- Ecopetrol and Pacific Slump as Colombia Oil Outlook Dims (Bloomberg News)
- Acción de Ecopetrol toca mínimos históricos (Dinero)
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