Nearly Half Colombia Oil Companies at Risk of Insolvency
Forty-three percent of companies in Colombia's oil sector are at high risk of going bankrupt as the industry reels from the recent halving of oil prices, according to a survey presented to the Andean country's congress this week.
The survey by the Colombia's companies' regulator polled 53 companies with total assets of about $10 billion but it did not include state-run oil producer Ecopetrol or two Toronto-listed companies, Pacific Rubiales Energy Corp and Canacol Energy Ltd.
The regulator did not say why those three companies were excluded, but they are some of the largest operators in Colombia and publicly listed.
All of the companies surveyed that were not at high risk of bankruptcy were ranked medium risk, while none were classified as low risk. Two surveyed firms were later excluded from the results after entering liquidation.
Colombia is Latin America's fourth-biggest oil producer with production of about 1 million barrels per day.
The survey was based on an analysis of the companies' results in 2014 and financial risks. It also factored in how the plunge in oil prices, which fell from $106 in June last year to $55 this week, would affect their businesses.
The companies at high risk of insolvency posted financial losses in the fourth quarter and had significantly higher debt levels than the average of all the companies surveyed.
The head of the Campetrol association of oil service companies, Ruben Dario Lizarralde, told Reuters last week that association members were seeking to create joint ventures with producers to explore for oil to maintain business activity until prices recover.
(Reporting by Peter Murphy; Editing by Peter Galloway)
