Ex-Im Bank Approves Nearly $1 Billion in Financing To Back U.S. Exports to Colombia's Ecopetrol

abarrelfullabarrelfull wrote on 09 Feb 2011 06:41
Tags: colombia ecopetrol finance

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The Export-Import Bank of the United States (Ex-Im Bank) has given final approval to a $420 million medium-term loan guarantee facility and a $459.8 million long-term loan guarantee facility to help finance the sale of goods and services from various U.S. exporters to Ecopetrol S.A., Colombia's national oil company. The export sales will support an estimated 6,700 American jobs.

Ecopetrol will use the financing to buy the products and services from U.S. companies large and small, to develop oil and gas reserves, improve existing oil field production and upgrade refineries. The company plans to significantly increase petroleum production to 1 million barrels of oil equivalent per day by 2015.

"This transaction will provide U.S. exporters the ability to sell goods and services to this important market, while helping Ecopetrol expand production and contributing to Colombia's economic growth," said Ex-Im Bank Chairman Fred P. Hochberg.

Colombia is one of nine dynamic economies with a growing appetite for infrastructure development that Ex-Im Bank has identified as offering U.S. companies the greatest opportunities for increased export sales.

"The news of the decisions of the Ex-Im Bank board to approve the loan guarantee facilities is excellent," said Ecopetrol President Javier Gutierrez. "It will allow Ecopetrol to more easily purchase U.S. products and services to expand its investments in exploration, production, refinery modernization and clean energy. Ecopetrol looks forward to growing this new partnership with the U.S. Export-Import Bank."

The long-term loan guarantee facility will provide support to modernize the Berrancabermeja refinery, Colombia's largest refinery, with total project costs estimated at approximately $4 billion. The medium-term loan guarantee facility will support company-wide capital investments. Using the proceeds of both facilities, Ecopetrol will be able to process heavy crude and significantly increase its overall production capacity.

Gutierrez noted that Ecopetrol is committed to excellent environmental best practices and is actively developing bio-fuels. He said Ex-Im Bank's support will enable Ecopetrol to pursue the use of clean technologies in the production of gasoline and diesel fuels, and significantly upgrade and streamline production processes.

According to Gutierrez, Ex-Im Bank's support also will have a tremendous impact on industrial and social development in Barracabermeja and other areas of the country, including major improvements in worker education, and creation of new jobs and businesses.

In January 2010 during a visit to Colombia, Chairman Hochberg announced the Bank's preliminary commitment of $1 billion to finance Ecopetrol?s purchase of U.S. goods and services. The Bank's board of directors subsequently approved conversions of the preliminary commitment into these two recently approved final commitments.

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