Ecopetrol Sets $80B Budget for 2011-2020

BOGOTA (Dow Jones Newswires), July 14, 2010

Ecopetrol will invest $80 billion between 2011 and 2020 in a bid to double its output, the company said Wednesday.

Ecopetrol, Colombia's state-controlled oil company, said it will invest 79% of the amount in seeking new oil and gas reserves and in production infrastructure. The remaining 21% will be invested in refineries, transportation infrastructure, biofuel production and other activities.

As a result of the exploration-and-production efforts, Ecopetrol expects to raise its output to 1.0 million barrels of oil equivalent a day in 2015 and 1.3 million barrels in 2020, up from 586,000 barrels in March of this year.

Output next year will be 871,000 barrels of oil equivalent a day, the company said.

The company wants to increase its output of crude oil, natural gas and unconventional hydrocarbons.

Ecopetrol plans to add 6 billion barrels of oil equivalent of new proven reserves between 2008 and 2020.

"Definitely, this long-term planning is good for the company, but there is still a long path to achieve the 2015 goal and even more for the 2020 target," Colombian brokerage Interbolsa SA said in a report. "For us, this press release is part of the media management that the oil companies do across the globe."

Shares of Ecopetrol were up 1.8% at 12:33 p.m. EDT to a record 2,910 Colombian pesos ($1.55).

Ecopetrol didn't provide details on how it will finance the investment program.

Including all its subsidiaries in Colombia, Brazil, Peru and the U.S., Ecopetrol plans to invest $8.48 billion in 2010.

Ecopetrol used to be fully owned by the government until Colombia floated a 10.1% stake on the local stock market in 2007 and made the company more independent to allow it to boost investment and grow.

Ecopetrol's previous investment plan was a program of $60 billion over the period 2008-2015.

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