Yahoo Finance Ecopetrol (EC) Wins Dispute, Awarded McDermott Share Capital
Colombian oil company, Ecopetrol S.A. EC owned refinery, Refineria de Cartagena (“Reficar”), will receive 19.9% of the share capital of McDermott International, in preferred shares. Reficar will receive the convertible preferred shares under a financial restructuring plan proposed by the Chicago Bridge and Iron Company (“CB&I”), which was approved by the District Court of Amsterdam in the Netherlands.
Reficar has been part of a prolonged international dispute, which is related to the facility’s renovation. In 2016, Reficar sought arbitration proceedings against CB&I, which is a subsidiary of McDermott International. Reficar raised allegations against CB&I, accusing it of doubling construction costs during the renovation. In addition, CB&I was accused of certain failures as per the engineering, procurement and construction contract.
In September of the previous year, Reficar also sought intervention from a U.S. federal judge to freeze certain assets of the CB&I. The intervention followed the ruling of the International Chamber of Commerce in 2023, asking CB&I to pay more than $1 billion in compensation to Reficar after a judge ruled in favor of the refinery in the dispute. McDermott was also accused of attempting to eliminate its obligations to Reficar by restructuring certain liabilities in courts in both the U.K. and the Netherlands.
McDermott International specializes in engineering services for the energy industry and low-carbon solutions, with its presence spanning 54 countries. CB&I N.V. is a subsidiary of McDermott.
Zacks Rank and Key Picks
EC currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are Sunoco LP SUN, Archrock Inc. AROC and Helmerich & Payne HP. Sunoco and Archrock presently sport a Zacks Rank #1 (Strong Buy) each, while Helmerich & Payne carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores, as well as distributors. Its current distribution yield is greater than the composite stocks in the industry, providing unitholders with consistent returns.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Helmerich & Payne is primarily involved in the contract drilling of oil and natural gas, with operations in all major U.S. onshore basins, as well as in South America, Australia and the Middle East. In the past months, the company has secured eight new rig contracts with Saudi Aramco, thus expanding its presence in the Middle East. With plans to capitalize on unconventional drilling growth opportunities, the company’s outlook seems positive.
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