Colombia’s Constitutional Court has struck down a presidential decree issued late last year that would have allowed the government to sell up to 10% of state oil company Ecopetrol to help pay for relief efforts from 2010’s torrential rains.
Interior Minister German Vargas announced the court’s decision to reporters Monday as he was leaving a meeting with court magistrates in Bogota.
With the court blocking the measure, President Juan Manuel Santos will need to get congressional approval for the Ecopetrol stake sale plan. Analysts say Santos shouldn’t have much difficulty getting lawmakers to approve it.
The government’s plan to sell a stake in Ecopetrol for flood relief is different from Ecopetrol’s own stake sale plans. It has already held a public stock offering in which it sold 10% of the company and is expected to sell another 10% as early as next month. The proceeds from those sales are being used for investments in technology to help improve the company’s exploration and production.
The state currently owns 90% of Ecopetrol. If the second company-led 10% stake sale plan and the 10% government-led stake sale for flood relief were both to go through, the government could own as little as 70% of the company.
Heavy rains during the last half of 2010 caused massive flooding in Colombia, killing hundreds of people and causing widespread damage to bridges, highways and other infrastructure.
