Ecopetrol
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| Company type | Public NYSE: EC |
|---|---|
| Industry | Oil and Gas |
| Founded | 1921 as Tropical Oil Company; 1951 as Ecopetrol S.A. |
| Founder | Colombian government |
| Headquarters | Bogotá , Colombia |
Key people | Javier Gutierrez |
| Products | Fuels, Lubricants, Petrochemicals |
| Revenue | US$ 7.8 billion (2006) |
| Owner | Colombian government |
| Website | www.ecopetrol.com.co |
Ecopetrol, formerly known as Empresa Colombiana de Petróleos S.A. (Template:Lang-en), is the largest company and the main petroleum company in Colombia. Because of its size, Ecopetrol belongs to a group of the 35 largest petroleum companies in the world and it is one of the four principal petroleum companies in Latin America.
History
The reversion of "The Mares Concession" to the Colombian State on August 25, 1951 gave way to the Empresa Colombiana de Petróleos, which had been created in 1948 by means of Law 165 of that same year.
The growing company assumed the reverted assets of the Tropical Oil Company that began oil activities in 1921 in Colombia with the implementation of the Cira-Infantas Field in the Middle Magdalena River Valley, located some 300 kilometers northeast of Bogotá.
Ecopetrol undertook activities in the oil chain as a State-owned Industrial and Commercial Company in charge of administrating the nation?s hydrocarbon resources, and grew as other concessions reverted and became part of its operation.
In 1961, it assumed the direct management of the Barrancabermeja Refinery. Thirteen years later, it purchased the Cartagena Refinery, built by Intercol in 1956.
In 1970, it adopted its first by-laws, which ratified its nature as a State-owned Commercial and Industrial Company, linked to the Ministry of Mines and Energy, fiscally supervised by the General Comptrollership of the Republic of Colombia.
In September 1983, the best news for the history of Ecopetrol and some of the best news for Colombia was given: the discovery of the Caño Limón Field in association with OXY, a reservoir with reserves estimated at 1.1 billion barrels (170,000,000 m3). Thanks to this field, the Company began a new era and in the year 1986, Colombia began to export oil again.
During the 1990s, Colombia extended its oil self-sufficiency with the discovery of the Cusiana and Cupiagua giants in the Foothills of the Plains region, in association with the British Petroleum Company.
In 2003, the Colombian government restructured the Empresa Colombiana de Petróleos, in order to internationalize it and make it more competitive in the framework of the world hydrocarbon industry.
Decree 1760 / June 26, 2003 (available only in Spanish) modified the organic structure of the Empresa Colombiana de Petróleos and made it Ecopetrol S.A., a public stock-holding corporation, one hundred percent state-owned, associated with the Ministry of Mines and Energy, and governed by its by-laws contained in Notarized Document No. 2931 / July 7, 2003, issued by the Second Notary Public of the Bogotá D.C. Circle.
The transformation of the Empresa Colombiana de Petróleos into the new Ecopetrol S.A., released the Company from State functions as the administrator of the oil source and the ANH (Agencia Nacional de Hidrocarburos) [National Hydrocarbons Agency] was created to carry out the function.
As of 2003, Ecopetrol S.A. began an era in which, with more autonomy, it has accelerated its exploratory activities, its capacity to obtain results with a business and commercial vision and the interest in improving its competitiveness on the world oil market.
Capitalization
The presidential signature in the law 1118 of December 27, 2006 was given after Colombian Congress' two houses approved in the night of December 13 the bill of law in a session that extended for near eight hours.
The initiative fixed limits for the participation of those who aspire to have shares of the company. Individuals who want to take part in the process will be able to acquire shares maximum up to five thousand legal monthly minimum wages, or about 2 billion Colombian pesos (some US$904.000). Whereas, no one private company will be permitted to own more than 3% of the Ecopetrol shares put out for sale, and pension funds, mutual funds and pension autonomous' Ecopetrol funds not be able to acquire any more than 15%, during the first two rounds.
After the Congress approval, the Acting President of Ecopetrol, Mauricio Salgar Hurtado, declared himself satisfied by the approval of the initiative which, as he said, "clears the future of the company".
Now Ecopetrol will be able to tackle an ambitious plan of investments estimated in 12 thousand 500 million dollars for the next five years. These resources will allow it to intensify the exploration and to increase the own production up to reaching levels of 500,000 barrels (79,000 m3) of oil equivalent in the year 2011.
Behind that, it will be possible to advance in the internationalization plan of the company and to execute projects of modermización of the refineries and of improvement of the quality of the fuels. The company will be able to penetrate into the research, development and marketing of clean-energy technology and into the biofuels market. Finally, Ecopetrol will not be forced anymore to assume fiscal charges different from the derivates of its corporate purpose.
To guarantee the democratization of the company, the placement of stocks will include three rounds.
Both first ones will be directed to the Colombian solidary sector, that is to say, the pension funds, cooperatives, workers and pensioned of Ecopetrol, territorial entities and the Colombians in general.
The remaining stocks will be offered to the public and other companies.
The Colombian Government will assure a budget of investment for the years 2007 and 2008 not lower than for 2006 (US$1.400 million) fitted by the growth of the GDP.
What's next?
Once Ecopetrol becomes a mixed stock-holding corporation (80% governmental and 20% private), it will continue being directed by the Stockholders General Assembly, the Board of Directors and the President of Society.
The Colombian departments (provinces) in which Ecopetrol extracts hydrocarbons will have a seat in the Board of Directors. The selection of this representative must be established in the by-laws of the company.
The next step is the selection of the investment banks which will valorate the company.
The first round of stocks placement for Ecopetrol started on August 27, 2007.
In November 2007, Ecopetrol held an initial public offering on the Colombian Stock Exchange (BVC), which raised $5.7 trillion Colombian Pesos (US$2.8 billion) from the sale of a 10.1% stake. On September 18, 2008 Ecopetrol announced the listing of its American Depositary Shares (ADSs) on the New York Stock Exchange (NYSE). Each ADS represents 20 ordinary shares of Ecopetrol common stock. The ADSs began trading that day on the NYSE under the ticker symbol "EC". JPMorgan Chase Bank, N.A. is acting as depositary for the ADS program and LaBranche & Co Inc. serves as the specialist for trading the ADSs. [1]
Corporate Accountability
Ecopetrol and the U'Wa
In response to Ecopetrol's 2008 listing on the New York Stock Exchange, the environmental organization Amazon Watch issued a press release over concerns about Ecopetrol's inadequate commitment to corporate social responsibility and mishandling of controversial projects within indigenous reserves, specifically dealing with the U'Wa indigenous people of eastern Colombia. [2]
The group also wrote a letter to JPMorgan Chase, [3] detailing discrepancies between Ecopetrol’s current plans and activities and claims the company made in its statement to the Securities and Exchange Commission (SEC) [4] about its operations in indigenous reserves.
External links
References
- ^ "Ecopetrol Lists American Depositary Shares on the New York Stock Exchange", Ecopetrol Press Release, September 18, 2008.
- ^ Amazon Watch, "Investors Urged not to Buy Ecopetrol Shares on NYSE over Human Rights Concerns", Amazon Watch Press Release, September 2008.
- ^ Amazon Watch, [http://www.amazonwatch.org/newsroom/view_news.php?id=1647 "Amazon Watch to JPMorgan Chase Bank: Don't underwrite Ecopetrol"], Media Release, September 17 2008.
- ^ Ecopetrol, Ecopetrol filing with the Securities and Exchange Commission, September 12, 2008.