BOGOTA, Dec 3 (Reuters) - Colombia’s state-run oil company Ecopetrol is evaluating whether to delay investments in some projects after a sharp drop in world oil prices, the mines and energy minister said on Wednesday.
The producer of about two thirds of Colombia’s million-barrel-per-day output has been investing heavily in exploration to boost stagnant reserves, overhaul its Cartagena refinery and planned to upgrade its Barrancabermeja unit, which serves the domestic market.
“Like any other oil company when you have prices like the ones we’re seeing now, Ecopetrol is revising its investment plan, looking at two things - how to be more cost-efficient and which are the projects which could be delayed,” Minister Tomas Gonzalez said at an industry event.
Two high-ranking Ecopetrol executives, who asked not to be identified because they are not authorized to speak publicly, told Reuters that renovations at the Barrancabermeja refinery could be one of the projects delayed under the plan.
The company will wait to see where the crude price stabilizes first, the minister said.
“The nature of the adjustment will depend on the price going forward,” Gonzalez said.
Brent oil rose on Wednesday to $71 a barrel in choppy trading as the market searched for a price floor after a near 40 percent fall since June. Brent hit a five-year low below $68 a barrel on Monday.
Ecopetrol is expected to announce its 2015 investment plan in the coming weeks. The local press has speculated it could be slashed from $10.6 billion this year. Ecopetrol shares have fallen 38.2 percent so far this year.
The company will keep its investment level high despite falling prices, Finance Minister Mauricio Cardenas, who along with Gonzalez is a member of Ecopetrol’s board, said on Tuesday.
Oil is the biggest source of foreign exchange for the country, the fourth-largest oil producer in Latin America, and the fall in crude prices over the past five months has hurt the trade balance and income from royalties, worrying policymakers.
The Organization of the Petroleum Exporting Countries decided last week not to reduce crude output, a move that means international crude prices, which have fallen more than a third since June, could continue to decline. (Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Peter Murphy and Grant McCool)