Page 7 - LatAmOil Week 05 2021

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Francisco Lloreda, ACP’s president, attributed according to the report. This would be 42.8-
the steep declines to the coronavirus (COVID- 57.1% higher than the previous year but still
19) pandemic, which led global energy demand below 2019 levels.
and consumption to plummet last year. He also ACP also anticipates that Colombia’s oil pro-
described 2020 as “an atypical year due to the fall duction will average 765,000-780,000 barrels
in demand for hydrocarbons worldwide.” per day in 2021. This would be steady on the
Lloreda’s statement is in line with the ACP 2020 figure of around 780,000 bpd but would
report’s prediction that the amount of money mark a decline of 11.9-13.7% on the 2019 figure
invested in Colombian oil and gas produc- of 886,000 bpd, the report said.
tion is on track to rise in 2021, though without The industry group’s forecast is at odds with
reaching pre-pandemic levels. The group says it the expectations of Colombia’s government.
expects investment levels to hit $2.6-2.9bn this Mines and Energy Minister Diego Mesa said
year, which would represent an increase of 52.9- last week that the country was on track to extract
70.6% on the 2020 figure. 865,000 bpd in 2021, just 2.4% below the 2019
Investment in exploration will follow a figure. (He also stated that Bogotá hoped to sign
similar pattern, rising to $500-550mn in 2021, 15 new exploration contracts this year.). ™

Ecopetrol seeks majority share

in Colombia’s national TSO

COLOMBIA’S national oil company (NOC) the answer is positive, the sale could probably be
Ecopetrol has expressed interest in buying a wrapped up in about six months.
majority stake in Interconexion Electrica SA According to Bloomberg, since Ecopetrol
(ISA), the country’s transmission system oper- and ISA are both controlled by the state, Bogotá
ator (TSO). has the option of executing the transaction as a
Ecopetrol revealed in a regulatory filing last direct contract, rather than calling a public ten-
week that it had submitted a non-binding offer der for the stake. Even so, there have been calls
for 51.4% of equity in ISA to the Finance Min- to make the process more competitive.
istry. Full details of the offer have not yet been Argus Media reported earlier this week that
made public, but Felipe Bayon, the president of Grupo de Energia de Bogotá (GEB), a large
the NOC, has estimated the value of the stake Colombian conglomerate, had offered to draw
at $3.5-4.0bn. This is in line with current stock up its own bid for ISA. It quoted Juan Ricardo
prices, which put the TSO’s total market capital- Ortega, the CEO of GEB, as saying that his
isation at around $7.7bn as of late January. company had already secured letters of credit
In the filing, Ecopetrol said it hoped to (L/Cs) for the deal from a number of major for-
finance the acquisition of the stake through a eign banks. The conglomerate is ready to pay
combination of cash on hand and the proceeds COP14 trillion ($3.97bn) in cash and loans and
of new stock and bond issues. It also indicated is capable of finalising the deal in as little as two
that it was ready to divest some non-strategic months, he claimed.
assets – including an 8% portion of the govern-
ment’s 88.5% stake in the NOC – to drum up
extra funds. None of these measures will affect
Ecopetrol’s status as a majority state-owned
company, and the government will retain a stake
of at least 80%, it noted.
Likewise, it added, the proposed takeover will
not eliminate the government’s leverage over the
TSO. “The Republic of Colombia would remain
as the ultimate beneficiary of ISA and maintains
ultimate control of the shares,” it stated.
Bayon told reporters last week that Ecopet-
rol was interested in buying the stake in order to
support its own shift to renewable energy pro-
duction. “It’s an absolutely transformational step
for Ecopetrol on this path of energy transition
and decarbonisation,” he remarked.
He also stated that the NOC was now wait-
ing for the government to respond to its offer. If Colombia’s government will retain at least 80% of Ecopetrol (Photo: File)

Week 05 04•February•2021 www. NEWSBASE .com P7