Ecopetrol president warns that lower oil prices could reduce profits for the full year by $2.8 billion

Ecopetrol, Colombia's state-owned oil company, warned that lower oil prices could cause its profits to drop by as much as 12 trillion pesos (2.76 billion dollars) this year.

Ecopetrol's president Ricardo Roa said to journalists at an industry event that the company may have to stop producing in some fields, and instead focus on others with lower costs.

Brent futures were at $63.45 per barrel on Friday. This was due to concerns about an intensifying trade conflict between the United States of America and China.

Roa explained that "we already have a list of fields with a break-even price close to this one, so we will have to eliminate those and concentrate on the ones that are cheaper."

Roa stated that the drop in crude prices has a significant impact on Ecopetrol profits.

Roa said that each dollar difference in the international market translates into a loss of 900 billion pesos in EBITDA, or earnings before interest, taxes and depreciation, and 700 billion pesos in net profit.

If we had been considering the (oil) price at $73 per barrel, and they are now at $63, we would have a difference in price of 12 trillions pesos.

Ecopetrol profits are crucial to Colombia's economic growth. As tax revenues decline, the government is forced to increase its debts and reduce spending. Nelson Bocanegra is the reporter.

(source: Reuters)