Bloomberg News

Ecopetrol Cuts 2012 Output Target as Colombia Rebels Attack

July 25, 2012

Ecopetrol SA (ECOPETL), the world’s best- performing major oil producer, trimmed its production forecast this year by 2.5 percent after guerrillas increased attacks on infrastructure in Colombia.

Average output will reach 780,000 barrels a day, according to a presentation posted today on the Bogota-based company’s website. The state-run company as recently as this month forecast average output of 800,000 barrels a day.

“It’s surprising since it’s the first time they’ve changed it,” said Juan David Pineros, an analyst at Interbolsa SA (INTBOL), Colombia’s largest brokerage, which has a hold on the stock. “The first half of the year didn’t help much with reaching that goal.”

Guerrillas have stepped up attacks on pipelines and oil fields, increasing transport costs and hampering production gains at Ecopetrol. Rebels have targeted infrastructure as an armed conflict stretches into its fifth decade in Colombia, South America’s third-largest crude supplier.

Second-quarter profit fell at Ecopetrol as costs rose and prices slid, missing analysts’ forecasts.

Net income slid 2.5 percent to 3.66 trillion pesos ($2.03 billion), from 3.75 trillion pesos a year earlier, the company said yesterday after markets closed. Profit trailed the 4.17 trillion-peso average of four analyst estimates compiled by Bloomberg.

Ecopetrol tumbled 2.2 percent to 4,885 pesos at 1:56 p.m. in Bogota. Shares have returned 35 percent in U.S. dollar terms this year through yesterday, the best performance among major oil producers with a market value of more than $50 billion, according to data compiled by Bloomberg.

To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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