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Ecopetrol (EC) Forms Business Units to Support Asia Operations

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Ecopetrol S.A. (EC - Free Report) announced the formation of two new marketing subsidiaries to broaden its activities in Asia. Notably, the subsidiaries will be based in Singapore.

Ecopetrol will have a 100% ownership interest in the new subsidiary, which will be known as Ecopetrol Singapore Pte Ltd. The new unit marks the company's first subsidiary in Asia, where it plans to increase its sale of crude and other products. Notably, about half of Ecopetrol's crude sales are destined for markets in Asia.

Ecopetrol Singapore will wholly own Ecopetrol Trading Asia Pte Ltd., the other unit which will be incorporated in the next few days. The primary objective of this unit will be the international commercialization of crude and refined products of the Ecopetrol Group as well as of third parties in Asia. The two subsidiaries will be part of the Ecopetrol Group and are expected to become operational in 2022.

The formation of the two business units will enhance its presence in the fast-growing Asia market. Importantly, the two units will enable Ecopetrol to maximize marketing margins through operational and financial efficiencies. Moreover, they will improve the competitive power of the company's heavy crudes during a time of energy transition.

Company Profile & Price Performance

Headquartered in Colombia, Ecopetrol is an integrated oil and gas company. In Colombia, the company is the largest energy firm and is responsible for 60% of the country’s hydrocarbon production.

Shares of the company have outperformed the industry in the past three months. Its stock has gained 19.5% against the industry’s 6% decline.

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Zacks Rank & Stocks to Consider

Ecopetrol currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are Repsol SA (REPYY - Free Report) , Suncor Energy Inc. (SU - Free Report) and Continental Resources, Inc. (CLR - 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.

Repsol’s earnings for 2021 are expected to increase 12.4% year over year.

In the past 60 days, the Zacks Consensus Estimate for Suncor’s 2021 earnings has been raised by 55.2%, while that for Continental has moved up 29.7%.

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Suncor Energy Inc. (SU) - free report >>

Ecopetrol S.A. (EC) - free report >>

Repsol SA (REPYY) - free report >>

Continental Resources, Inc. (CLR) - free report >>