(Updates with analyst’s comment in fourth paragraph, output in fifth paragraph.)
Oct. 24 (Bloomberg) -- Ecopetrol SA, Colombia’s largest oil company, said third-quarter profit more than doubled as prices rose and an $80 billion investment plan boosted production.
Net income climbed to 4.15 trillion pesos ($2.2 billion) from 1.79 trillion pesos a year earlier, the Bogota-based company said today in a statement. Output rose 16 percent.
State-controlled Ecopetrol is taking advantage of higher crude prices with an $80 billion spending plan until 2020 that will increase production to 1.3 million barrels a day. The company’s rising output has made Colombia the third-largest oil producer in South America after Venezuela and Brazil.
“We’re seeing the results of big investments,” Samuel David, a stock analyst at brokerage Valores BanColombia, said Oct. 20 by telephone from Bogota. “They are spending a lot on drilling, and expanding fields and transport infrastructure.”
He doesn’t own Ecopetrol shares. Valores doesn’t rate the stock. Quarterly production of oil and natural gas rose to 731,500 barrels a day from an average 632,400 barrels a year earlier. Ecopetrol aims to increase production to 1 million barrels in 2015.
Ecopetrol rose 15 pesos, or 0.4 percent, to close at 4,010 pesos in Bogota. The stock has slipped 2.2 percent this year, less than a 10 percent drop by Colombia’s benchmark Colcap index. The earnings report was released after the market closed.
Protests in eastern Colombia last month at the Rubiales field, Colombia’s largest, probably trimmed Ecopetrol’s output last quarter, David said. Pacific Rubiales Energy Corp. holds a 40 percent stake in Rubiales, while Ecopetrol owns the rest.
This quarter, rainfall in Colombia that can trigger mudslides and flooding may weigh on production by hampering transport of oil by truck from Ecopetrol’s fields, David said.
Colombia is in its rainy season, and above-average precipitation may return in December through March, the state- run Institute for Hydrology, Meteorology and Environmental Studies said last week.
President Juan Manuel Santos plans to sell as much as 10 percent of the government’s stake in Ecopetrol over four years to pay for repairs to infrastructure after flooding from storms last year. The sale is pending approval by the nation’s Congress, Santos said Aug. 12.
The plan is separate from Ecopetrol’s sale two months ago to raise funds for its expansion plan. The company sold 2.4 trillion pesos in stock amid a market rout in August, falling short of its target of 2.5 trillion pesos.
Crude for December delivery rose $3.87 to $91.27 a barrel on the New York Mercantile Exchange, the highest settlement price since Aug. 3. The price has gained 11 percent in a year.
Inroads against guerrillas that increase security have drawn investors to Colombia including billionaires Eike Batista and Carlos Slim. Slim’s Grupo Carso SAB bought a stake this year in Geoprocesados SA’s Tabasco Oil Co., which owns rights to explore in eastern Colombia near fields owned by Ecopetrol.
The number of oil rigs, a measure of investment in new production, rose to 68 in September from 45 a year earlier across Colombia, according to Baker Hughes Inc.
--Editors: Robin Saponar, Charles Siler
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