Colombia Seeks Investors to Buy Part of Its Ecopetrol Stake

Colombia will target international investors and sovereign wealth funds to raise as much as $3 billion this year from the sale of a stake in oil company Ecopetrol SA (ECOPETL), said Mines and Energy Minister Mauricio Cardenas.

The government will sell as much as 3 percentage points of its 88.5 percent stake in Ecopetrol, pending congressional approval that is probable in the first half of the year, Cardenas said yesterday in an interview in Bogotá.

“We have to do a lot of promotion and marketing abroad,” Cardenas said. 

“We’d like to explore appetite for this in Asia.”

Colombia is betting on demand in international equities markets after crude climbed 16 percent in the three months and Ecopetrol developed an $80 billion spending plan this coming decade to increase output. 

The Andean nation is the third- largest oil supplier in South America after drawing investors including billionaires Carlos Slim and Eike Batista.

The sale may be greater than some investors anticipated, Felipe Campos, an analyst at brokerage Alianza Valores SA, said in a telephone interview yesterday in Bogota. 

Campos doesn’t own Ecopetrol shares. Alianza has a “hold” on the stock.

Ecopetrol yesterday slid 4.2 percent to 4,320 pesos at the close in Bogota, the largest one-day percentage drop since Sept. 22. Colombia’s benchmark Colcap index declined 1.5 percent to 1,585.8.

Infrastructure

Colombia will seek to tap investors abroad after a separate sale of stock by Ecopetrol in Colombia last year probably sated most domestic demand, Cardenas said. Ecopetrol raised 2.4 trillion pesos ($1.3 billion), below its target of 2.5 trillion pesos, amid a global equities rout last year.

“The new investors will have to come from overseas,” Cardenas said.

The government has proposed to sell as much as 10 percent of Ecopetrol to pay for infrastructure repairs after flooding in Colombia. 

The sale will be a “slow, gradual process” and garnering congressional approval is a priority, Cardenas said.

“All of our attention will be on this bill,” Cardenas said. “It’s not an easy bill.”

Gaining approval for the sale may be “a difficult process,” Colombian brokerage Interbolsa SA said in an e-mailed research note yesterday.

Ecopetrol’s output of oil and natural gas rose 16 percent in the third quarter to 731,500 barrels a day, according to the company’s website.