Colombia's state-run oil company Ecopetrol may face a significant profit decline of up to 12 trillion pesos ($2.76 billion) this year due to the decrease in oil prices, warned the company's president, Ricardo Roa. In response, Ecopetrol may need to halt production at certain fields and prioritize those with lower operating costs, Roa revealed at an industry event. With crude oil prices experiencing a second consecutive weekly drop, concerns over a trade war between the U.S. and China have impacted the market.

Roa noted that a list of fields with break-even prices close to the current market levels has been identified for potential closure, estimating that around 20 to 30 fields could be at risk. Although Ecopetrol manages 158 fields, Roa clarified that the fields under consideration for closure are not significant producers. The impact of shutting down these fields on production levels is uncertain.

In addition to production challenges, the decrease in oil prices will significantly affect Ecopetrol's profits. Roa highlighted that every dollar difference in the global oil market equates to a 900-billion-peso decrease in EBITDA and a 700-billion-peso drop in net profit. With the current price drop from $73 to $63 per barrel, the company faces a price difference of 12 trillion pesos.

Ecopetrol's profits play a crucial role in Colombia's economy, especially as the country grapples with declining tax revenues, forcing the government to increase debt and reduce expenditures. On a positive note, Ecopetrol announced plans to launch two new processes for natural gas sales this year, aiming to bolster its revenue streams. Starting in June, additional locally-produced natural gas will be sold, followed by imported gas sales via the Buenaventura port in July. An offshore block operated in collaboration with Petrobras is expected to contribute to the market by the year-end, potentially meeting 14% of Colombia's current gas demand.