Colombia’s largest oil producer posted a 126% increase in net profit for the year’s first trimester, how was that possible in this economic climate?
2016 has been a tough year for oil prices, and thus, oil producers. Record losses are being posted across the board, dragging national economies down and triggering crises and shutting down projects. In such a dismal year, it’s refreshing to see some positive results, especially some as impressive as those shown by Colombia’s Ecopetrol on this year’s first trimester.
Ecopetrol, the largest oil producer in Colombia, and a well-established Fortune 500, reported profits 127% higher than those corresponding to the first trimester of 2015. The data becomes impressive when you consider that one year ago the barrel of oil was going for $62.5, whereas now it goes for a measly $40.75.
Ecopetrol reported $128 million in profit for this trimester, in its 2015 equivalent it only reported around $54 million.
Juan Carlos Echeverry, the company’s president argued that “Ecopetrol managed to generate profit amidst this challenging environment by focusing their efforts in cutting costs, augmenting efficiency, producing profitable barrels and prioritizing savings”.
In fact, Ecopetrol saved over $142 million by optimizing purchasing plans and contracting, renegotiating contracts and improving supply lines and supply strategies.
All of this, despite producing 736,600 barrels, which meant a 4.75% decrease from last year’s production.
Ecopetrol’s case is one that proves that through smart management and responsive decision making, the oil crisis won’t have to spell disaster, but instead become a reason to push for more profitable financial structures.
LatinAmerican Post |