Ecopetrol SA, Colombia’s largest oil company, claims to have contributed over $17 billion to government revenue in 2013, reported local media Thursday.
Of the $17.12 the government will receive from its state-owned oil giant, 39% will come from share dividend, 28% from income tax, 24% from royalties, 7% from a national tax on gasoline and diesel fuel and 2% from other taxes, said Ecopetrol CEO Javier Gutierrez.
“This makes up 18% of the national budget of 2013 and 83% of the investment. These numbers confirm the great weight that the results of the company has for the country’s finances,” he was quoted as saying on Wednesday, at Ecopetrol’s largest annual shareholders meeting.
Colombia’s governmental federal budget expenditures for 2013 were $106 billion, according to the CIA World Factbook.
Positive year, despite rise in guerrilla attacks
Speaking at Wednesday’s investor meeting, Minister of Mining and Energy Amylkar Acosta confirmed that 2013 was a positive year for Ecopetrol.
“After reviewing in detail the results, I do not doubt that this was a very positive year for Ecopetrol, because if you look at the main indicators, there is a 4.5% increase in production, a 5.1% lift in proven and certified reserves, ” he said.
This was despite a renewed offensive by the FARC and ELN rebel groups, the country’s largest, targeting oil pipelines and supply chains, which Ecopetrol attributed for its failure to meet 2013 production targets. According to Bloomberg News, the FARC alone committed 259 attacks on Ecopetrol infrastructure, a 72% increase compared to the year before.
MORE: Colombia’s Ecopetrol increased production and reserves but missed 2013 target
Ecopetrol reportedly represents over 60% of Colombia’s total oil and gas production. It is the fourth largest oil and gas producer in Latin America and is among the top 50 energy companies in the world.
Bleak future ahead
The present prosperity may not last for Ecopetrol or the Colombian state that depends on it for revenue.
Acosta told El Espectador newspaper in November 2013 that no new major discoveries of oil had been made recently and that Colombia’s reserves were “extremely precarious.”
Current Colombian proven oil reserves are set at about 2.3 billion barrels, which could see Colombia’s oil wells dry up in less than seven years, given current rates of production. As a result, it may be difficult for the country as a whole to maintain 2013′s strong levels of growth in the long term without introduction of new economic sectors or increases in the production output of other sectors.
MORE: Colombia’s oil will run out by 2020 with no solution in sight
The energy sector currently comprises a sizable chunk of Colombia’s GDP. According to figures from the Ministry of Commerce, Industry and Tourism, petroleum exports made up over 46% of Colombia’s total exports from January to July 2013. Coal, as well, ranks among Colombia’s top exports. The country is the first largest producer of coal in the world.
Sources
- Resultados de la petrolera le dejan $33,75 billones a las arcas de la Nación (La Republica)
- Ecopetrol misses 2013 output target amid transport constraints (Bloomberg)
- Economy of Colombia: Budget (CIA world factbook)