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| Retiree Adiela Echeverry bought Ecopetrol shares in a supermarket in Bogotá on Monday. Sibylla Brodzinsky |
Colombians buy shares in state oil firm
Colombia this week put 10 percent of Ecopetrol on sale in a move counter to the Latin American trend toward more state control of oil and gas resources.
By Sibylla Brodzinsky | Correspondent of The Christian Science Monitorfrom the August 30, 2007 edition
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Bogotá, Colombia - Lucia Castillo varies her shopping list little from week to week, typically filling her basket with the usual cheese, bread, eggs, and papaya. But this week Ms. Castillo added something out of the ordinary to her shopping cart: shares in a multibillion dollar oil company.
Veering away from a Latin American trend of nationalization and greater government control of oil assets, Colombia put part of its state oil company Ecopetrol on sale Monday, hoping to capture the interest of tens of thousands of small investors, like Castillo, a retiree.
"We want to have 250,000 Colombians as shareholders of Ecopetrol," company CEO Javier Gutierrez says, adding that he envisions the company's first shareholder meeting being held in Bogotá's El Campín soccer stadium.
On offer is just over 10 percent of the company, Colombia's largest and the fourth-largest oil firm in Latin America. The government calls the process "democratization" or capitalization, but critics argue it is the privatization-in-disguise Colombia's of sacred cow, which, they fear will end up in the hands of foreign oil interests.
To calm the political storm that would come from an outright privatization of a part of the company that Colombians proudly say belongs to every citizen, the government chose to offer shares first exclusively to Colombian individuals and pension and worker funds.
Colombia has done this before with electricity transporter ISA and with Bogotá's ETB phone company. But at $2.8 billion, this share offering is worth 22 times what the phone company was worth and there is little chance that the Colombian market can absorb it completely. Eventually, critics say, shares could be snapped up by international oil firms or foreign investors.
Buy shares with your groceries
But Colombians still get first dibs. Ecopetrol chose to offer the shares at retail chains – in addition to banks and brokerage firms – to make them more readily available to the largest possible number of citizens.
However, the minimum investment to buy Ecopetrol shares is $700, just over three times the minimum monthly salary of $216.
To help ease the burden on potential first-time investors, buyers can acquire a package of 1,000 shares with a $100 down payment and 12 easy interest-free installments.
Castillo paid her down payment together with her milk and eggs at a supermarket in Bogotá. "This is fantastic to be able to buy the shares here," she said. "It makes it so much easier."
John Pérez, a young employee at a local social club and a first-time investor, bought his shares at a downtown bank. "I was told it would be a good deal, and I wanted to buy them before the shares run out," he said as he filled out the required forms.
Selling the 'national patrimony'?
One person who will not be lining up to purchase shares is Jorge Gamboa, president of the USO oil workers' union, which opposes the sale. "I cannot stab myself or my brothers in the back," he said in an interview.
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