BOGOTA – Colombian state-controlled oil firm Ecopetrol’s board of directors has approved the creation of a pipeline infrastructure unit, the company said.
Ecopetrol, Latin America’s largest company by market value, according to a recent study by Sao Paulo-based consulting group Economatica, made the announcement Friday in a press release.
“The purpose of the new company is to serve the strategic transportation and logistical needs of the country’s oil industry resulting from the increase in hydrocarbon production and higher sales of crude and refined products, both in Colombia as well as in international markets,” the release said.
The incorporation of the wholly-owned subsidiary will “expand and strengthen” the country’s network of oil and multi-purpose pipelines and “significantly reduce the damage to roads from truck transportation of hydrocarbons.”
Mines and Energy Minister Mauricio Cardenas, for his part, hailed the importance of Colombia having “a company exclusively dedicated to operating our oil and multi-purpose pipelines.”
“This is the most important step that’s been taken in years in hydrocarbon transport in Colombia,” Cardenas added.
The subsidiary, known as Cenit S.A.S, “will be incorporated with all of Ecopetrol’s transportation assets, including the interests held in Ocensa, Los Llanos Pipeline, Bicentenario Pipeline and the Colombia Pipeline,” the release said.
Colombia’s oil industry has grown rapidly in recent years thanks in part to the government’s success in pushing leftist rebels into more remote areas, although it still faces challenges related to insufficient pipeline capacity.
Ecopetrol posted $8.6 billion in net income in 2011, up 85 percent from the previous year.
The company’s average daily output in 2011 came in at 724,100 barrels of oil equivalent per day.
Ecopetrol, which accounts for more than 60 percent of Colombia’s crude production, also is involved in exploration and production activities in Brazil, Peru and the U.S. Gulf Coast.