Hard setback for Colombia free fall of oil prices. Today, US $ 61.67 is quoted, more than US $ 10 below the expected price according to the medium -term fiscal framework (MFMP) and the price – base with which Ecopetrol projected its investments (US $ 73) by 2025. And for each dollar that drops the price, $ 300 billion are stopped receiving, in total $ 3 billion! In addition, for every dollar that drops the price they stop entering the country US $ 16 million the foreign exchange revenue or US $ 160 million, which will further press the devaluation of the peso and of the contempra will further increase the public debt, which already exceeds 60% of the GDP!
Of course the impact of the thunderous fall in crude oil prices transcends Ecopetrol, since it has a harmful effect on the growth rate of the economy, in public finances and in the economy itself given the importance of black gold in its dynamic, subtracting strength and impulse. It is estimated that for every US $ 10 that drops the price of crude oil, GDP growth is affected by -0.4 percentage points. And remember that, according to the DANE, the sector that had the worst performance the previous year, to the point that it experienced a contraction in its activity and production, with a decrease of – 5%, in red!
The greatest concern lies in the impact of the disrupt of oil prices in the already critical situation of public finances, very particularly those of the nation, which exhibits a huge decoured. We come from a fiscal deficit last year of 6.8% of GDP, the highest in 20 years, well above the 5.6% estimated by the medium -term fiscal framework (MFMP). And it is expected by JP Morgan that this year at most will fall to 6.1%, superior in any case to the mFMP forecast of 5.1%. And what is worse, public indebtedness is triggered, last year recorded 61.3% of GDP 8 !!). So we are facing a scenario that seriously compromises fiscal sustainability.
Unfortunately, prices remain down, due to the recession ghost as a result of the tariff war decreed by Trump and the largest offer of 400 thousand barrels. by the OPEC. As will be remembered, Ecopetrol utilities fell 21.7% between 2023 and 2024, from $ 19.1 billion to 14.9 billion, with average prices of US $ 82.5 and US $ 81 a barrel, respectively. And everything indicates that this price trend is going to be maintained for a long time.
So that if the tendency of the fall in crude oil prices is maintained, the result for 2025 would be that of a worsening of the company’s performance in terms of first of its profits, with the aggravating fact that due to the collapse of the Ecopetrol prices it has been required to close fields that were in operation, since they would be below the “pain threshold”, which is understood as the point of balance between the cost of “Lifting” of the raw barrel and its price. This translates, as is obvious, in a lower production, which follows that its impact would be doubled, due to the low price of crude oil and the reduction of the volumes extracted and marketed.
Fortunately, the Board of Directors of Ecopetrol disjointed President Petro’s siren songs when he said that “I want that operation to be sold (permain) to invest in energy.” Indeed, last April Ecopetrol and OXY extended their association of the Midland Development Plan in that basin. Otherwise Ecopetrol would have shot the foot and the expected results would be worse, given that ecopetrol of 15% of its production would be deprived, affecting the relationship reserves – production (r/p) of the company. If this false step was taken by the Ecopetrol Board of Directors, the company would have been inflicted at a time when its environment is not the most auspicious.
Here it should be noted that the frustration of the Komodo project is a lost opportunity, with its indefinite postponement as a result of the suspension of the environmental license and its subsequent expedition in a late and extemporaneous manner, with the aggravating person to establish in the same some conditions that in the opinion of Ecopetrol and Anadarco, their partner, the project is unfeasible. This impasse comes to be added to the Oslo Project, located in the same permian basin in which Ecopetrol was advancing in the negotiations for the acquisition of a participation in the Crownrock company, owned by its partner, the Oxy, this process that was truncated, in the words of the then Minister of Finance Ricardo Bonilla, because “the issue is coherence… the oil continues, but not with fracking.
Definitely Ecopetrol’s biggest commitment and the country, in association with Petrobras, is in Sirius, whose gas reserves are calculated in 6 TPC, equivalent to more than double the remaining gas reserves that are still available, which is called to recover the safety and energy sovereignty of the country, at this time in serious predicament. But its commerciality takes at least until 2027. So in the meantime, to avoid shortage, it will have to continue importing increasing volumes of natural gas, which will force to expand, urgently, the regasifying capacity that the country currently has.
Amylkar Acosta
