Ecopetrol S.A. ( EC Quick Quote EC - Free Report) announced that it was able to maintain its normal production levels of 675,000 barrels per day (bpd) on average despite weeks of protests across Colombia.
The ongoing protests, which began in the country last month, are tormenting the oil and gas industry as producers are forced to shut down wells due to obstructions and transport restrictions. Notably, the energy minister of Colombia stated that crude production, after almost a month of protests and road blockages, dropped below 700,000 bpd for the first time since 2009.
However, Ecopetrol, the country’s largest crude producer, has not suffered any significant impact in its fields and has its refineries operating normally until now. Notably, the company encountered some difficulties in the southern part of the country due to blockades in the Putumayo zone. Meanwhile, the main oil fields, where the company extracts the majority of its production, are still operating.
The ongoing protests, which are taking place across the country was triggered by a government proposal to increase taxes. The protests, with no sign of stopping, had a major impact on several industries, thereby, blocking key transport links and hampering other services.Several drilling, maintenance and related activities have also been suspended due to the protest-led disruptions.
As various other economic sectors are being affected, the protests are expected to have a spillover effect on the entire oil and gas industry. In fact, many products and services, including energy consumption, had to be reduced, with several businesses temporarily shutting down.
Notably, upstream company
GeoPark Limited ( GPRK Quick Quote GPRK - Free Report) , which operates primarily in Colombia, announced some operating limitations due to the difficulties with transportation, drilling, and the mobilization of equipment and personnel. Per the company, this would result in an average production drop of around 12,000-15,000 bpd of oil equivalent, which is a reduction of 40-45% of its typical daily average.
However, the Colombia government should reach an agreement with the protesters and establish a long-term solution to public complaints to stabilize the economy by the end of this year.
Headquartered in Colombia, Ecopetrol is an integrated oil and gas company. Its operation includes extraction, collection, treatment, storage and pumping or compression of hydrocarbons.
Zacks Rank & Stocks to Consider
Ecopetrol currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are
Oasis Petroleum Inc. ( OAS Quick Quote OAS - Free Report) and Extraction Oil & Gas, Inc. ( XOG Quick Quote XOG - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
In the past 60 days, the Zacks Consensus Estimate for Oasis Petroleum’s 2021 earnings has been raised by 562%, while that for Extraction has been raised by 235.5%.
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