Colombia's majority state-owned oil company Ecopetrol has cut its planned investment for 2020 by $1.2 billion amid the outbreak of the novel coronavirus and an increase in global crude supply, the company said Tuesday.
The oil and gas company now sees its 2020 investment at between $3.3 billion and $4.3 billion. Oil companies have been affected by a heavy drop in demand amid the coronavirus pandemic and a price war started by Saudi Arabia and Russia after they failed to agree to extend their pact to cut output to support the market.
Ecopetrol's updated investment plan, where it will invest in early-stage opportunities, is aimed at preserving its production and cash flow, safeguarding its investments and committing to social investments, the company said.
Ecopetrol will also cut costs by 2 trillion pesos ($487.81 million) through austerity measures that prioritize its operating activities and will restrict travel, sponsorship, and participating in events among other things, it said.
With regards to dividends, the company plans to pay all of the dividends to minority shareholders on April 23 but will pay just 14% of dividends to the majority holder. It will pay the rest of the dividends to the majority holder in the second half of the year, it said.
Shares in Ecopetrol have fallen 47.9% so far in 2020 and closed on Monday at 1,725 pesos each on the Colombian stock exchange.
Production for the year is still expected between 745,000 and 760,000 barrels of oil equivalent a day, the company said.
($1 = 4,099.93 pesos)
(Reporting by Oliver Griffin; additional reporting by Nelson Bocanegra; editing by Jason Neely and Bernadette Baum)
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