BOGOTA, March 26 (Reuters) - Gone were the party balloons emblazoned with Ecopetrol’s logo at the shareholder meeting of Colombia’s state oil company on Thursday. The usual keychains, posh puzzles, glossy books and toy iguana mascot gifts were also conspicuous by their absence.
A vertiginous slide in oil prices from more than $115 a barrel last June to a low of $45 in January has cast a pall over the oil industry worldwide. For Ecopetrol shareholders, that meant being greeted with a cheese sandwich, a plastic pen and a copy of results detailing its first quarterly loss in years.
Though the nation’s biggest company warned shareholders that “for reasons of austerity,” no gifts would be distributed at the meeting, the meager bag of goodies this year surprised attendees and unsettled some about the fate of their life savings.
“It’s not the end of the world, but it makes me want to cry,” said Josefina Gonzalez, 50, as she peered into the small bag at a conference center in the Colombian capital.
The slump in crude prices led earnings of Ecopetrol, 88 percent state owned, to slide 42 percent last year and prompted the company to cut its 2015 spending on exploration and other outlays by 26 percent.
The biggest government source of tax and export revenue, oil producers such as Ecopetrol have deferred new projects leading to thousands of layoffs among contractors whose companies were hired for the construction of production sites and pipelines.
“This has me so worried; I have a big part of my savings here,” said Jose Bermudez, 68, who has seen the value of his Ecopetrol stock halve in the last 12 months to 1,985 pesos ($0.78) per share. “All we can do now is see if there’s anything left for my children and grandchildren.”
Things could get worse for shareholders, say analysts.
Apart from the decline in oil prices, industry-wide mass layoffs led the main oil workers’ union, USO, to threaten strike action. During a last minute reprieve on Wednesday night, the USO board suspended the walkout to give the government time to “resolve the problems confronting the oil sector.”
But oil share prices are expected to remain low, leaving little hope for a quick turn in the company’s fortunes.
“Gauging from today, we can see that next year there will another decline in profits and earnings,” said Wilson Tovar, analyst at brokerage Acciones y Valores.
“With the possibility of oil below $50 again, there’s a likelihood of another 10 percent decline in the share price of oil companies.” (Writing by Helen Murphy; Editing by Peter Murphy and Alan Crosby)