(Bloomberg) — Colombian oil company Ecopetrol SA is seeking a waiver from the United States to import natural gas from Venezuela as the South American country faces a fuel supply shortfall for power plants starting next year.
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Ecopetrol President Ricardo Roa said in an interview late Tuesday that U.S. authorities have been asked for a special waiver to advance talks with Petróleos de Venezuela SA over gas supplies. He pointed out that the request was made through the Colombian embassy in Washington.
State-owned Ecopetrol estimates that Colombia’s gas supply will not cover daily demand in early 2025 and that fuel will need to be imported to cover that deficit before deep-water fields come into operation. Venezuelan gas is one of the possible alternatives, but the restoration of US sanctions will likely complicate that option.
Repairs needed
The United States reimposed sanctions after determining that Nicolás Maduro’s regime did not comply with an agreement to allow fair elections to be held in July.
However, Colombia will need more than a US exemption to import Venezuelan gas. A 224-kilometer-long gas pipeline connecting the two countries will require repairs on the Colombian side, which could take between 10 and 12 months, Roa explained.
On Tuesday, Ecopetrol announced that first-quarter net income fell 29% to 4.01 trillion pesos ($1 billion), below the consensus of 4.59 trillion pesos. Profits were hurt by the strengthening currency, Roa told reporters.
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On the other hand, the newspaper El Tiempo reported on Wednesday that two magistrates of the National Electoral Council of Colombia requested that the president of Ecopetrol be investigated as part of alleged irregularities in the financing of President Gustavo Petro’s 2022 campaign. Roa, who directed The campaign has been under scrutiny by the electoral authority for possible non-compliance with legal financing limits.
The Attorney General’s Office has also been investigating Roa and Petro’s son, Nicolás, and is trying to establish whether any of the campaign funds came from criminal sources. The electoral council must decide whether to launch a formal investigation.
Ecopetrol shares reversed their previous declines in Bogotá, to rise 0.7% to 2,285 pesos at 10:24 am local time.
BTG Pactual reiterated its neutral rating on the company’s shares, citing “the recent deterioration in the company’s corporate governance.” In a May 7 note, analysts Daniel Guardiola and Juan José Muñoz also noted “the lack of momentum in results due to rising costs, weak margins, higher taxes and slightly weaker production” despite of high oil prices.
Original Note: Ecopetrol Seeks Waiver for Venezuelan Gas to Plug Shortfall (1)
–With the collaboration of Alex Vasquez.
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