Ecopetrol Negotiates 10-Year Venezuelan Gas Supply Deal, CEO Says

what happened

Ecopetrol is in talks to secure a ten-year contract for natural gas supplies from Venezuela. Chief executive Joaquin Gutierrez said on Friday, during the company's post-results call, that the price could be "very competitive" and "well below" prevailing market rates, according to Bloomberg, which Seeking Alpha cited.

The Colombian producer intends to ask Venezuela's state oil firm for the right to run the 88-kilometre Colombian section of the Antonio Ricaurte pipeline linking the two countries. It has also filed for a U.S. license needed to work with the pipeline. Gutierrez, who recently travelled to Venezuela, said the neighbour's oil sector offers openings that could expand the company's consolidated reserves.

The push comes as Colombia faces a widening gas shortfall caused by shrinking domestic output. Imports covered 37% of national demand in September, a record share.

why it matters

For markets, the key signal is Colombia's growing reliance on imports, which makes long-term supply deals strategically important for the country's gas balance. Because the talks are at an early stage, the effect on volumes and prices remains uncertain. Ecopetrol's third-quarter report showed profit up 86% year on year to 4.76 trillion pesos (about $1.44 billion), though below the second quarter's 6.06 trillion, while revenue rose 17.5% to 35.06 trillion pesos (about $10.63 billion), helped by higher oil prices and the Brava Energia acquisition.

market impact

Colombian gas: possible Venezuelan imports could reduce reliance on costly supply and ease the deficit.

tags

instruments