June 7, 2019 / 3:15 PM / 8 days ago

Colombia's Ecopetrol targets 2019-2023 savings of $2.4 bln

BOGOTA, June 7 (Reuters) - Colombian state-run oil company Ecopetrol on Friday said it will launch a new phase of cost-cutting aimed at saving 8 trillion pesos ($2.43 bln) from 2019 to 2023.

About 71% of cost reductions will be focused in exploration and production, Ecopetrol said in a statement. Another 10% will come from the downstream area, 8% from commercial, 6% from midstream and another 5% between digital and corporate areas, it said.

The new goals are included in the savings plan it announced for 2019-2021, though it did not say how much.

The cost reductions come after Ecopetrol reported structural efficiencies worth 10.2 trillion pesos between 2015 and the first quarter of this year.

Ecopetrol has said it will invest between $3.5 billion and $4 billion in 2019, slightly above last year as it bolsters spending on exploration and production projects.

Some 80% of the investment will be focused in upstream projects, mostly in Colombia, it has said, while another portion will be spent in the United States, Brazil and Mexico.

The investment is the backbone of an ambitious plan to boost production and explore for more oil to replenish dwindling reserves. The company has said it will drill 700 wells and double the number of rigs in operation last year.

Ecopetrol said in May its first-quarter net profit was 2.75 trillion pesos, 5% higher than in 2018, helped by an increase in output, sales and greater operating efficiencies.

It expects 2019 output to reach between 720,000 and 730,000 bpd equivalent. (Reporting by Helen Murphy; Editing by Dan Grebler)

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