Colombians buy shares in state oil firm

Mr. Gamboa says Colombia is going against the tide of the renationalization of oil and energy assets by the left-leaning governments of Venezuela, Bolivia and Ecuador. "Instead, here, we are selling our national patrimony and our natural resources to the highest bidder," he says.

The USO also questions the way the company was valued. Two separate assessments by investment banks set the market value of Ecopetrol at $25.47 billion, which critics say is too low.

Two opposition senators contested the valuation before the comptrollers' office, which dismissed the challenge. But a Bogotá judge on Friday accepted a class-action suit that aims to halt the sale of shares, alleging a lack of transparency in the valuation process. Mines and Energy Minister Hernán Martínez said the suit was unlikely to prosper and that the sale would continue to go forward as planned.

Ecopetrol was founded 56 years ago when several oil concessions were handed back to the Colombian state.

Until four years ago, it was mostly charged with managing hydrocarbon resources, refining crude oil, and granting exploration and production concessions. But it did little of its own explorations.

In 2003, Ecopetrol was relieved of its regulatory role and became just another player in an ever-expanding field of exploration in Colombia.

Ecopetrol holds a monopoly on crude transport in Colombia and owns the country's largest refinery in Barrancabermeja. It owns 49 percent of a second refinery in Cartagena.

The company's oil reserves stand at 1.2 million barrels of oil, and production in March was 312,000 barrels per day.

If, as expected, the full 10.1 percent of shares is not sold in the month they will be available, a second issue will be made toward the middle of next year on the local stock exchange. Depending on the success or failure of the first two rounds, the company could make an international offering of shares on the New York Stock Exchange by the second half of 2008.

Colombia's Congress authorized the government to sell up to 20 percent of the oil company to private investors, but CEO Mr. Gutierrez says Ecopetrol decided to initially offer only 10 percent.

That percentage is enough to gain financial autonomy from the government, allowing the company to manage its finances without the constraints imposed by national budgetary concerns. "It is enough to cover our needs for the moment," Gutierrez says. Future offerings will depend on the financial needs of the company.

Those needs will be significant. Ecopetrol has a grand plan to turn itself into a major international player in the energy sector with investments of $12.5 billion in everything from exploration and production to refining and international expansion, which would require private investment.

The plan is "perhaps a bit too ambitious" according to oil analyst Roger Tissot with PFC Energy, a Washington-based consultancy. But he says it has been "well thought-out."

Mr Pérez, who bought his first-ever company shares on Monday, is banking on it: "You can't go wrong with an oil company, right?"

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