Ecopetrol to be Split Into Three Companies
Ecopetrol, the state-run Colombian oil company, is to be split into three companies in an effort to re-structure and cut costs. The company said it would honor all joint venture agreements. Ecopetrol President Isaac Yanovich said the newly created National Hydrocarbon Agency would administer and allocate hydrocarbon exploration areas. Ecopetrol S.A. will deal with exploration, production and refining, while a third company will handle "non-strategic" investments.
"I would think foreign companies must be feeling very calm," Yanovich told a news conference in Bogota. "One of the considerations we had in taking these decisions had to do with creating a more transparent bidding process in oil areas. "We think this is a very positive sign for both foreign and national capital that want to come or continue working in our country's exploration areas," he said.
The move should allow the company to draw more foreign investment for oil exploration at a time when production has been falling. Oil is Colombia's largest single export, and it's a big source of revenue for the national and local governments. Colombia's output fell to 578,468 barrels a day in 2002 from 604,24 barrels the previous year.
President Alvaro Uribe, pushing cost-cutting measures to meet IMF goals, is shaking up inefficient state companies under special powers he won from Congress. Yanovich said there will be no job cuts to Ecopetrol's 7,400-strong work force as a result of the restructuring.
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