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Información para inversores (Overview, E&P, Downtream, Transporte, Información Financiera, Responsabilidad Corporativa, Resumen) 2013

Información para inversores (Overview, E&P, Downtream, Transporte, Información Financiera, Responsabilidad Corporativa, Resumen) 2013

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Presentación Ecopetrol Presentación Ecopetrol Presentation Transcript

  • Ecopetrol S.A. Investor Presentation January of 2013
  • Disclaimer This document was prepared by Ecopetrol S.A. with the purpose of providing the market and interested parties certain financial and other information of the Company. This document may include strategy discussions and forward-looking statements regarding the probable development of Ecopetrol’s Business. Said projections and statements include references to estimates or expectations of the Company regarding its future and operational results. Potential investors and the market in general should be aware that the information provided herein does not constitute any guarantee of its performance, risks or uncertainties that may occur or materialize. Real results may fluctuate and differ from those provided herein due to several factors outside of the control of the Company. Neither Ecopetrol nor its advisors, officers, employees, directors or agents, make any representation nor shall assume any responsibility in the event actual performance of the company differs from what is provided herein. Moreover, Ecopetrol, its advisors, officers, employees, directors or agents shall not have any obligation whatsoever to update, correct, amend or adjust this presentation based on information attained or events occurred after its disclosure. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Ecopetrol. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of Ecopetrol. 2
  • Agenda 1. Ecopetrol´s overview 2. Exploration & Production 3. Downstream 4. Transportation 5. Financials 6. Corporate Responsibility 7. Summary 3 View slide
  • Overview of Ecopetrol 4 View slide
  • Capex plan focused on E&P has lead growth since 2008 Growth Capex 2008-2012 ( e ) 2007 vs. 2011/2012 Production 11% 750 mboed (Jan-Sep 2012) 10% Total Capex USD 32.9 bn 8% 1.9 X 15% 11% 45% Reserves (1P) 1.5 X 1.8 bn boe (Dec. 2011) Ebitda 3.4 X Market Cap 4.7 X USD 15.1 bn (2011) Production Acquisitions Transportation Refining & Petroch. Exploration Other Source: Ecopetrol USD 128 bn (Dec. 2012) 5
  • Ecopetrol is Colombia´s top player and holds interests in the U.S., Brazil and Peru Ecopetrol and interests in subsidiares & affiliates E&P: america Ref.& Petchem. : Transport: CENIT Biofuels: PERU Key figures: * Upstream • Production: 750 mboed • Exploratory area: 21.3 mn has. • 1P Reserves : 1.86 bn boe *Figures for Jan-Sep 2012 except for 1P Reserves as of Dec. 31. 2011 Source: Ecopetrol BRAZIL Midstream • Crude transport: 895 mbd • Products transport: 303 mbd Downstream • Refining capacity: 330 mbod • Petrochem. prod.capacity: 500k tons /yr • Biofules prod. capacity: 100k tons / yr (biodiesel) Sales & Marketing • Sales : 874 mboed • Exports 60% / Colombia 40% 6
  • Strategic plan with a Capex of USD 80 bn to reach a production of 1.3 mn “clean” barrels by 2020 USD 80 bn 1.3 mn boed 1.3 million boed “Clean barrels” in 2020 • No accidents • No environmental incidents • Sound labor relations • Delivering commitments to stakeholders • 17% ROCE Biof. & other Transport Refining Exploration 3% 5% 7% 25% Production 60% Capex 2012-2020 Source: Ecopetrol • 85% allocated to E&P • 90% in Colombia 7
  • Exploration & Production • Strategy 8
  • Remarkable rise in production led by heavy oil in Colombia Average production / year (thousand barrels of crude oil and gas per day) 1,300 1,000 399 72 521 447 616 104 97 85 270 253 81 109 153 224 2007 2008 2009 2010 Source: Ecopetrol 780 108 280 289 246 Heavy oil 724 336 2011 Light and medium oil 2012 (e) 2015 (e) 2020 (e) Natural gas 9
  • Upstream strategy has four drivers that rise production to 1.3 mn “clean” barrels in 2020 and add 6.2 bn barrels of 1P reserves 1 1 Production & Recovery Factor: Prod: 840-870 mboed 2 3 • Primary/Secondary/Tertiary Recovery • EOR/IOR (Enhanced Oil Recovery/Improved Oil Recovery) 2 Exploration Colombia: • Llanos Orientales • Caribe Offshore • Caguan-Putumayo • Sustained activity in other basins International: • Brazil • Gulf of Mexico (U.S.) • Peru Exploration Prod: 260-410 mboed Unconventional Prod: 50-200 mboed 3 4 Production and Increase Recovery Factor Acquisitions 4 Unconventional • Assesment of potential • Joint ventures with strategic partners Acquisitions 10
  • 1 Production of current fields supported by drilling, non-thermal recovery, and thermal recovery Workstreams Drilling Key Initiatives Primary recovery • Infill Drilling • New area development • Optimize well configurations Screening and projects • Llanos Orientales Horizontal and multilateral wells • Middle Magdalena Thermal Recovery Tertiary recovery • Cyclic or continuing steaminjection process • In situ combustion Water Flooding (135 fields) Gas Injection Non Thermal Recovery Secondary and tertiary recovery • Water injection • Alternating water and gas injection • Chemical injection • 21 fields implemented • Casabe • La Cira • Upper Magdalena • 21 projects in progress • 93 fields to be implemented • South: 5 Projects • Magd & Central: 6 Projects In situ • Chichimene (pilot) • Quifa (pilot) Continuous Injection • Teca Cyclic Injection • Santa Clara 11
  • Upstream strategy has four drivers that rise production to 1.3 mn “clean” barrels in 2020 and add 6.2 bn barrels of 1P reserves 1 1 Production & Recovery Factor: Prod: 840-870 mboed 2 • Primary/Secondary/Tertiary Recovery • EOR/IOR (Enhanced Oil Recovery/Improved Oil Recovery) 2 Unconventional Prod: 50-200 mboed 3 4 Exploration Colombia: • Llanos Orientales • Caribe Offshore • Caguan-Putumayo • Sustained activity in other basins International: • Brazil • Gulf of Mexico (U.S.) • Peru Exploration Prod: 260-410 mboed 3 Production and Increase Recovery Factor Acquisitions 4 Unconventional • Assesment of potential • Joint ventures with strategic partners Acquisitions 12
  • Ecopetrol´s exploratory plan is focused in proven basins in Colombia 2 Yet to Find per Sedimentary Basin (mmboe) Magdalena Lower Valley 10.000 5.500 3.585 2.000 4.000 2.636 Catatumbo 2.000 1.500 1.000 913 750 366 650 304 Magdalena Mid Valley 550 Llanos / Foothills 250 150 100 Magdalena Upper Valley 90 60 40 10 Putumayo Llanos/ M. Magd. U. Magd. Catatum. Putumayo L. Magd. Foothills Valley Valley Valley Mean Source: Ecopetrol 13
  • Estimated contingent resources in Colombian frontier areas of 15 bn boes (mean) CARIBBEAN OFFSHORE PMEAN 2,900 MMBOE 380-14,000 MMBOE Potential (mn boe) SINU PMEAN 414 MMBOE 50-900 MMBOE STRAT TEST VMM PMEAN 92 MMBOE 50-200 MMBOE PACIFIC OFFSHORE PMEAN 600 MMBOE 50-1,500MMBOE 31000 10000 13948 2000 1000 MBPE 2 1500 661 950 900 433 401 200 100 50 70 116 50 250 115 50 20 10 HEAVY CRUDE OIL PMEAN 418MMBOE 70-950 MMBOE Source: Ecopetrol Caribe Off Carib.Off Pacifico Crudos Sinu Pacif.Off Heavy Sinú Off Pes oil Estrat. Strat VMM MMV Cayos Cays Mean 14
  • 2 Ecopetrol has 37% of the total licensed acreage in Colombia and operates in 6 strategic basins of high potential  Exploration assets* Caribbean sea (61 blocks) 14.5 mn hectares 4 Operated directly: 51 Blocks Not operated: 10 Blocks 5 Basins Ecopetrol S.A. Hocol S.A. Llanos – Catatumbo 2 Mid Magdalena Valley  3 Upper Magdalena – Putumayo  4 Offshore Caribbean  5 Lower Magdalena Valley  6 Offshore Pacific  1   Producing assets Direct: Partnerships: Equion 2 Pacific ocean 51 Blocks 64 Blocks 2.1 mn hectares (94% of Colombia´s production area) * Does not include the blocks awarded in the Open Round Colombia 2012 Source: ANH, Ecopetrol 1 6 3 15 15
  • Basins in key countries with high potential 2 Yet to find per Basin Reserves discovered in 2009 (bn boe) v v v Ecuador Chile Gas Trin & To. v Colombia U.S. West East Coast Mexico U.S. West Gulf Coast Venezuela Brazil Campos Crude Argentina v Brazil Brazil Santos (presalt) (mn boe) Countries where Ecopetrol has interests Source: Wood Mackenzie 16
  • 2 International exploration assets with 8.7 mn Has U.S.A. EC America 0.1 mn Has Miocene GOM Paleogene Jurassic EC Peru 4.4 mn Has Para Maranhao Marañón Ucayali Huallaga Sechura Salaverry Lima Savia Peru 4.1 mn Has* Marañón Ucayali Peru Brazil EC Brazil 0.1 mn Has Campos Santos Espiritu Santo Campos Santos Para-Maranhao * Includes only Ecopetrol’s 50% interest Source: Ecopetrol 17
  • Upstream strategy has four drivers that rise production to 1.3 mn “clean” barrels in 2020 and add 6.2 bn barrels of 1P reserves 1 1 Production & Recovery Factor: Prod: 840-870 mboed 2 3 • Primary/Secondary/Tertiary Recovery • EOR/IOR (Enhanced Oil Recovery/Improved Oil Recovery) 2 Exploration Colombia: • Llanos Orientales • Caribe Offshore • Caguan-Putumayo • Sustained activity in other basins International: • Brazil • Gulf of Mexico (U.S.) • Peru Exploration Prod: 260-410 mboed Unconventional Prod: 50-200 mboed 3 4 Production and Increase Recovery Factor Acquisitions 4 Unconventional • Assesment of potential • Joint ventures with strategic partners Acquisitions 18
  • 3 Unconventional hydrocarbon potential in Colombia 120 - 1200 TCF (Karson, 1994) HM - CARIBE 32 TCF GAC - GUAJIRA 2010) (Arthur D´little, GAC - CESAR SH - CATATUMBO GAC - MONTERIA LA LUNA FORMATION SH - VMM POZO COYOTE GAC - CORDILLERA SH- CORDILLERA Methane Hydrate Gas in Situ 434.2 TCF Shale Oil/Gas 31.7 TCF (Highest potential in Mid Magd Valley 29 TCF) Coal Bed Methane 7.5 TCF ( Highest potential in Cesar 2,4 TCF and Guajira 3,4 TCF) Tight sands 1.2 TCF HM - PACIFICO SH - VSM Tar sands Potential Volume 23,762 mn boe Ecopetrol focus areas SH - PUT Source: Arthur D´Little 19
  • Exploration & Production • Update 2012-2013 20
  • Production goal for 2013 of 798 mboed Goal 2013 Production 2011-2013 Ecopetrol including interest in subsidiaries and affiliates (mboed) 2% 3% 10% 798 780 7% Northeast 2% 27% 7% 15% Central East Mid Magd. Catatumbo 798 mboed 724 South 19% 18% Hocol Equión Savia and minor fields 2011 2012 (e) 2013 (e) • Cupiagua Fields with higher • Castilla production growth • Chichimene • Guajira 21
  • Higher exploration activity and geological success 61 Exploratory Plan # of wells Stratigraphic wells Colombian exploration wells 29 Successful wells 19 3 10 11 12 15 2 13 5 16 5 30 11 8 2008 2009 2010 38 13 4 2007 (1) 5 3 7 53 6 12 2 Geological Success 17 15 22 International exploration wells Drilled wells Jan – Sep 2012 60 16 16% 33% 26% 6 1 26% 28 11 2011 (2) 2012 exp. 34 2013 exp. 49% (1) Success rate for A3/A2 wells; (2) A1 wells are not included (2) 2011: Success rate 18/37= 49% (2 wells in evaluation) 22
  • Offshore exploration in Colombia, Brazil and U.S. Gulf Coast Colombia International 2012: • Mapalé 1: Presence of dry gas 2012: 2013-2014: • Fuerte Norte, Fuerte Sur and RC-9: Obtaining environmental feasibility studies • Additional studies • Parmer: (U.S. GoM) • Presence of hydrocarbons • Dalmatian: (U.S. GoM) • Presence of hydrocarbons • RC-8, RC-10 and RC-12 : Planned 3D seismic surveys TAYRONA GUA OFF 3 RC-12 SHELL RC-10 RC-11 RC-12 RC-9 TAYRONA RC-8 GUAJIRA RC-7 RC-6 RC-4RC-5 FUERTE NORTE • Itaúna: (Brazil) 2013-2014: • Logan: (U.S. GoM) • Appraisal well by 2014 • Itaúna: (Brazil) • Expected appraisal well by 2013 FUERTE SUR 23
  • Downstream • Refining • Sales & Marketing 24
  • Downstream strategy 1 Operational Excellence 2 Value Creation 3 Profitable & Sustainable growth 4 Market & Clients 25
  • Barrels spilled due to operational causes Accident frequency rate (Bls / yr) (hours lost per million worked hours) 3,91 158 2,46 Jan-Sep2012 2011 2010 2009 (Days) Jan-Sep2012 2011 296 364 Jan-Sep2012 139 2010 145 499 2008 153 2010 2009 1,55 Non-scheduled turnarounds: B/meja + Reficar 248 2008 2,10 0 2008 2011 2009 Energy loss Index 163 160 0 Jan-Sep2012 10 0 2008 2007 6 2010 1,64 2006 1 Operational Excellence: Secure processes to preserve safety, the environment and operational efficiency 26
  • 2 Value Creation: Modernization projects increase revenues by maximizing output of medium distillates and gasoline Barrancabermeja Production 250 mbd 250 mbd 0,5% 3% 4% 1% 3,1% 4% Reficar Production 80 mbd Petrochemicals Petroquímicos 7% 165 mbd 7% Propileno Propylene 34% 40% LPG GLP GLP LPG 36% 54% Destilados Medios Mid Distillates Gasolinas Gasoline 34% Fuel && Coke Fuel Coque 29% Fuel & Coque Fuel & Coke 48% 1% 5% Curent2012 (2012) 37% 28% 24% With PMRB (2017) Project Current restrictions: Mid Distillates Destilados Medios Gasoline Gasolinas Curent (2012) 2012 With Project With Project (2014) Expansión Reficar 1. Refineries configuration: • Medium conversion constraints the production of gasoline and medium distillates. • Diesel quality does not meet regulatory standards. 2. Supply: Imports to comply with Colombian environmental quality standards. 27
  • 2 Value Creation: Processing crudes based on the availability in Colombia and reducing the cost of feedstock Quality of crude basket: Barrancabermeja 17% 10% 20% Livianos Light 7% 20% 19% 45% Medios Medium 70% 38% 2012 Current (2012) Quality of crude basket: Reficar With Project After Project PMRB (2017) 93% 61% Pesados y ácidos Heavy & Sour 2012 Current (2012) Expansión With Project Reficar (2014) Current restriction in configuration: Limited load of heavy crude oil (lower cost vs. medium and light crudes) 28
  • 3 Profitable & Sustainable Growth: Key projects in Refining to improve profitability and meet market conditions Reficar (Cartagena) refinery modernization project • • • • •  Refining capacity from 80 to 165 mbd High conversion from 76% to 97% Processing of heavy, extra-heavy and sour crude oils International fuel quality standards (sulfur content) • Gasoline < 30 ppm • Diesel < 10 ppm Finding opportunities in the regional markets of purchasing crude oil and exporting fuels Scope • • • • • Crude Distillation VDU Coker Hydrocracking FCC revamp • • • • • FCC Naphtha HDT 2 ULSD Hydrotreater Units 2 Hydrogen Plants Gas Plant 2 Sulfur Plants 29
  • 3 The modernization of Cartagena Refinery reached 71% progress (as of Sep. 30 / 2012 ) Progress: Weight Site prep & FEED EPC contract Docks and tanks Third party supplies, comissioning and startup Progress 10.0% 76.2% 5.8% 100% 73.2% 64.8% Total Progress 23.0% 71.4% Timeline: Weight Progress Engineering 14% 97.2% Procurement 51% 92.6% Modules 8.0% EPC contract 2% 100.0% Construction 33% 31.3% Total Progress Executed Capex: End of mechanical completion EPC 1Q-10 to 4Q -13 Capex 73.2% Commiss. & Start up 3Q-13 to 1H-14 Description Financing/insurance/taxes Engineering-PMC USD mn 321 901 Procurement 1,298 Construction 752 Other Total 99 3,371 30
  • 3 Profitable & Sustainable Growth: Key projects in Refining to increase the conversion factor and margin of the refineries Barrancabermeja refinery modernization project Revamps New units Capex      45 mbd of clean and valuable fuels High conversion from 75 to > 95% Processing of heavy, extra-heavy and sour crude oils Domestic fuel quality standards (sulfur content)  Gasoline <150 ppm  Diesel <50 ppm Scope • Three new processing units: • Delayed Coking • Hydrocracking • Coker Naphtha Hydrotreating • Two Hydrogen Plants • Six new utilities units • Five new auxiliary units • Environmental units: amine, sour water and sulfur recovery • LPG treating unit • Storage tanks 31
  • 3 Modernization of Barrancabermeja refinery reached 12.3% progress (as of Sep. 30 / 2012) Phases Progress: I,II y III Weight Conceptual and basic engineering Progress 6.7% 100% Detailed engineering Procurement and Contracting 4.0% Construction 1.3% Commisioning IV 4.9% 0.0% Subtotal Phase IV V 93.1% 6.0% Closure 0.2% 0.0% Total Progress Timeline: Executed Capex: 1Q-09 to 3Q-11 Phases I, II & III 3Q - 17 Site Prep. EPC Commiss. & Start up Description Engineering Equipment purchases Construction PMC (Management and Control) 1Q-12 to 1Q-15 Capex 12.3% 2Q-13 to 2Q-17 Other Owner Costs Total USD mn 193.0 98.7 45.9 93.1 21.7 452.4 32
  • 3 Profitable & Sustainable Growth: Refining results in 2020 will improve due to the execution of projects that add value to the crude oil Process heavier crudes and produce more value added products Optimize operating costs Utilities Project Process heavier crudes and produce higher quality fuels Barranca modernization project Reficar Project 2012 2013 2014 Reficar Ebitda 2013: Starting of updated refinery 2015 2017 2020 Barranca Ebitda 2017: Starting of updated refinery * Figures depend on international prices (crack spreads) behavior 33
  • 4 Market & Clients: Rising Colombian demand for medium distillates & gasoline *Ecopetrol’s Sales (KBDC) 2011 2013 ( e ) 2015 ( e ) Med. Dist. 131 140 149 Gasoline's & LPG´s 92 94 95 Liquid fuels consumption in Colombia** Thousand barrels per day 350 300 CAGR 250 200 150 CAGR 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Medium distillates Gasolines LPG *Source: Ecopetrol and UPME (Mining and Energy Planning Agency). Total energy consumption Includes biofuels 34
  • 4 Market & Clients: Strong commitment for better air quality Sulfur content (average parts per million) 4,500 4,500 Diesel Other cities in Colombia 3,000 3,000 2500 Medellín Bogotá & Public Transportation Systems In Colombia 2.130 2.037 1.2001200 500 2007 2008 1,000 178 341 215 28 2009 2010 727 176 20 20 2011 198 29 15 2012 1.000 700 Gasoline 214 2007 Source: Ecopetrol 2008 2009 2010 199 2011 2012 35
  • 4 Market & Clients: Diversifying crude references and export destinations Destinations of Crude Exports Crude References Caribbean Other 3,8% Other U.S. 3,2% and Canada 10,4% Europe 7,4% 441 mboed Jan-Sep 2012 U.S. West Coast 7,7% Central America 10,3% Source: Ecopetrol Other 4% WTI 1% U.S. Gulf Coast 42,9% Maya 21% Brent 75% Far East 14,3% 36
  • Market & Clients: Developing gas market 4 Sufficiency and exportable surplus Total consumption: Colombia + Exports (GBTUD) 907 721 1,036 1,061 1,062 1,086 SUPPLY AND NEW FINDINGS Conventional • Offshore Caribbean: 9 - 35 TCF • Foothills: 1 - 4 TCF 760 Unconventional • Gas Shale: Mid Magdalena Valley and Catatumbo 1532 TCF 2006 2007 2008 2009 2010 Refineries Petrochemical Industrial CNGV Power Plants 2011 1H-2012 Colombian Gas Balance LDC Exports LDC: Colombian gas utility companies CNG: compressed natural gas Source: Ecopetrol 37
  • 4 Market & Clients: Growing in biofuels through current and new projects Biodiesel Production of Biofuels (thousand tons per year ) • Max. Capacity : 100,000 tons/yr (2,000 bls/day) • Production 2011: 99,304 tons • Blending of 2% biodiesel at Barranca refinery • Ecopetrol´s interest: 50% 380 450 280 180 Ethanol 100 2011 • Total Capex US$282 million • Start of operations: 2nd quarter 2013 • Max. Capacity: 480,000 liters/day • Future blending of 10% through wholesalers • Ecopetrol ´s interest : 92% Source: Ecopetrol 2013 2016 2018 2020 Ecodiesel Bioenergy Ecodiesel 2 Etanol Ethanol Bioenergy 2 Subject to further approvals 38
  • Transportation & Logistics • • • Current Capacity CENIT Key Projects 39
  • Rising Transport Capacity and Key Projects Key transportation assets Transported volume and capacity Transportation Capacity (thousand barrels per day) Pozos – Galan Coveñas Port +300 MBOD* (770 MBOD)** Santa Marta 1.163 936 Ocensa 333 Crude oil 2007 441 Products 3Q 2012 Coveñas Pipeline +100 MBOD* (560 MBOD)** Financial results B/Bermeja Banadia for the second quarter Sebastopol Cusiana Araguaney Porvenir Monterrey Santiago (thousand barrels per day) Castilla – Apiay 517 303 Rubiales 2007 Products Jan-Sep 12 Poliducto Andino Pipeline +53 MBOD* (53 MBOD)** Apiay Pipeline +105 MBOD* (190 MBOD)** Tenay Apiay – Porvenir Tumaco Crude oil Unloading facility +40 MBOD Storage +100 MB Vasconia 895 Pipeline +3 MBOD* (45 MBOD)** Banadía ODC Pipeline +15 MBOD* (210 MBOD)** Ayacucho – Coveñas Cartagena Ayacucho Transported Volumes 194 Product line +45 MBOD* (90 MBOD)** Orito Pipeline +50 MBOD* (210 MBOD)** Rubiales – Monterrey Pipeline +100 MBOD* (340 MBOD)** * Capacity increase projects fully implemented ** Current capacity 40
  • CENIT: Transport new business model Current Situation New Model “CENIT” 100% owned by Ecopetrol Benefits • Growing investment in Oil & Gas in Colombia. • Country´s rising production driven mainly by heavy crudes. • Existing infrastructure operating at full capacity. • High operating standards. • Third party access to transport systems. • Diversified funding alternatives for new infrastructure. • Separate roles: • Cenit: planning, commercial strategy, and management. • Ecopetrol: operator of transport & logistics infrastructure. • Colombian specialized company in transport & logistics. • Access to all O&G companies, based on clear and transparent rules. • Ecopetrol focused in other business segment and generating profit from transport. • Cenit will guarantee Ecopetrol the required capacity for hydrocarbon transport. 41
  • Future increase in capacity in order to meet demand Colombian demand vs. Capacity* (mbd) 2.500 2012 – 2014: Crude Oil Pipeline - Key Projects 2.020 2.000 1.500 1.287 988 1.377 1.446 1.472 1. 2. 3. 4. San Fernando – Monterrey System: +390 mbod Bicentenario Phase 1: +120 mbod Magdalena Medio System: +75mbod Caño Limón – Coveñas: +55 mbod Pipeline - Key Projects 1.133 1. Galán - Sebastopol: +110 mbod* 2. Costa Norte Colombiana – Galan: +90 mbod** 1.000 Post 2014: 500 Crude Oil Pipeline - Key Projects 0 2010 2011 2012 Fuel Oil Third parties production Partners Pipeline Capacity 2013 2014 2015 2016 Diluent Royalties Ecopetrol´s production Total Capacity* 1. 2. 3. 4. Carmentea (EBC) – Araguaney: +460 mbod Bicentenario Phase II & III: +330 mbod Pacífico Colombiano: +450 mbod Oleoducto Coveñas – Cartagena: +300 mbod **Projects in engineering and economic analysis. The capabilities and build times are subject to the results of engineering. * Includes trucks Source: Ecopetrol 42
  • Ecopetrol´s Financials • • • Preserving fundamentals Cost saving initiatives Cash generation 43
  • Sustained growth in revenues driven by exports Total Sales (mboed) 547 475 650 302 733 370 857 874 Local sales Exports 494 518 59% 148 31% 216 327 69% 331 348 363 363 356 2008 2009 2010 2011 Jan-Sep-12 494 518 Local sales* Exports 2007 Exports (mboed) 216 148 53 95 2007 16 36% 64% 51 149 2008 302 20 370 2009 * Local sales include sales to Free trade zones Source: Ecopetrol 55 24 53 7 52 49 233 25 311 2010 41% 5% 10% 85% 414 441 2011 Natural gas Products Jan-Sep-12 Crude oil 44
  • Financial results driven by rising production, higher prices and cost saving initiatives Price of Crude Export Basket 99,7 61,8 (USD/bl) Total Sales (USD bn) 14,1 9,2 4,9 2008 45% Margins 39% 36% 2008 Returns 30.4 19,4 7,8 13,4 104,7 24,8 10.5 11,6 17,0 14,3 58% 2009 2010 2011 Jan-Sep-2012 38% 45% 7,2 5,6 29% 19% 2009 36% 50% 43% 48% 10% 2008 2009 Ebitda Operating Net 23% 27% 25% 2010 2011 Jan-Sep-2012 28% 16% Exports 40% 34% 24% Local 42% 12,8 65% 35% 72,0 99,1 20% 13% 2010 18% 2011 28% 17% ROE ROA Jan-Sep 12 45
  • Strong financial results compares to industry peers Financial Results Jan-Sep 2012 Peers** Ecopetrol Min Max Sales growth (US$)* 10% -2% 5% Operating margin 40% 8% 39% EBITDA margin 48% 12% 57% Net margin 25% 4% 24% 6% 12% 34% ROA (12 months) 17% 2% 7% ROE (12 months) 28% 4% 11% Financial Debt / Assets * Growth compared to Jan – Sep 2011 **Sample group includes: Petrobras, Marathon, Hess, Repsol and Oxy Source: Companies´quarterly reports and Bloomberg 46
  • Cost saving initiatives: Lifting, refining and transport costs Workstreams Production Lifting Cost Key Initiatives •Standardize required well workovers •Corrective maintenance of high cost facilities (gas plants, drilling rigs, tanks and lines) •Outsourced water treatment Refining Refining cash cost •Procurement of catalysts with refineries specs • Standardize maintenance of critical equipment • Minimize vapor leaks and losses in electrical lines Transport Transportation cost •Improved reliability of lines and pumping systems •Higher utilization of energy during off-peak hours • Reduce service expenses 47
  • Competitive lifting and refining cash costs Lifting cost: Ecopetrol ranked 7th Refining cash cost: Ecopetrol in 2nd quartile within Latam * Lifting cost / bl Ranking 32,86 49 Petrobras 25,65 45 Marathon 21,8 20,73 40 Occidental 18,56 36 Chevron 17,22 34 Exxon Mobil 16,39 32 Q4 43 Hess Higher Mayor Costo cost Conoco Phillips Anadarko 12,49 23 Ecopetrol 10,67 7 6,38 5 Talisman Q-IV Q3 Q-III Q-II Q2 Q-I GRB Lower Menor Costo cost Q1 2004 1 2006 2 2008 3 20104 Ecopetrol B/meja refinery Source: Solomon Associates. Fuel Study 2010 * Lifting cost estimated by Herold; Source: Herold – Global Upstream Performance Review 2012 48
  • Strong cash flow, low indebtedness, and investment grade ratings Initial Sources 25,2 Cash Flow Jan-Sep 2012 Uses 0,6 0,1 31,0 17,6 3,2 5,1 (USD billion) Initial Cash Operations Other Offering Cash Available Assets 50,2 2.3 2,6 3,1 Balance Sheet Sep 30/2012 (USD$ billion) Credit Ratings Other long term Other short term Labor obligations Cash and cash equivalents Accounts receivable 20.4 9,2 Natural and environmental resources Other long term 2.0 10.7 Capex Liabilities 7.7 11.3 Operations Inventories 1.5 Property, plant and equipment (net) Investments 1.9 3.1 3.2 2.4 7.6 Final 4,7 0,4 FX Difference Dividends 5,2 Ending cash Debt Ratios * • Liabilities / Assets: 0.41x • Financial obligations / Total Liabilities: 15.4% Estimated liabilities and provisions Financial obligations (12 month): 0.19 x Other short term • EBIT/ Interest expenses: 84x Accounts payable and related parties • Financial obligations/ Ebitda • Total debt / Capital: 0.11x • Debt / 1P Resvs.: USD 2.71/bl S&P: BBB- (Positive) / Fitch: BBB- (Stable) / Moody´s: Baa2 (Stable) * Does not include subsidiaries 49
  • Capex plan of US$80 billion between 2012-2020 focused on E&P, mainly funded with internal cash generation USD 80 bn Biof. & other Transport Refining Exploration Production 3% 5% 7% USD 80 bn Equity Debt 9% 16% 25% 60% Uses Cash generation 75% Sources • Long term crude oil price assumption for 2012-2020 Capex plan: WTI USD80/bl (real 2012) • Required debt financing as function of crude oil price • ROCE: 36% (2009-2011) 50
  • Capex of US$9.5 billion for 2013 Breakdown of Capex Key goals/projects per segment 2% Exploration 19% 18% • 34 exploratory wells • 26 in Colombia • 8 International Production • Average Production: 798 mboed • Ecopetrol: 750 mboed • Subs. + Aff. : 48 mboed Production US$9.5 billion Exploration 44% Refining Transport 18% Other Capex allocation: Refining • Modernization of B/bermeja and C/gena facilities • Industrial services project at B/meja Transport • Increase crude transportation capacity by 170 mbod in 2013 and 250 mbod in 2015 • 69% to Ecopetrol S.A. and 31 % to Subsidiares and Affiliates • 95 % in Colombia • 62% to E&P * Source Ecopetrol Other • R&D • IT • HSE 51
  • Corporate Responsibility • • HSE DJSI 52
  • Improving HSE (Health, Safety & Environment) metrics Environmental Incidents Accident frequency with labor time loss (number of events) (# accidents per mn labor hrs.) 2,28 116 1,56 1,22 1,24 1,02 0,85 59 56 41 41 23 2007 2008 2009 2010 2011 Jan-Sep-2012 2007 2008 2009 2010 2011 Jan-Sep-2012 • New operational model • Full awareness within employees and contractors • Risk management best practices Source: Ecopetrol 53
  • Ecopetrol in the Dow Jones Sustainability Index (World DJSI) since 2011 Ecopetrol´s 2011-2012 Corporate Sustainability Assessment 76 77 61 59 82 70 88 Environmental EC 2011 EC 2012 78 53 51 41 Economic 74 Social Avg O&G 2012 Total Key facts of 2011-2012 Ecopetrol´s Assessment: • 340 companies in the 2012 (41 added and deleted) in DJSI world index (12 in O&G) • Among the 10% best rated O&G companies worldwide • 2012 assesment improved vs. 2011 • One of four Colombian companies included in the index Source: Corporate Sustainability Assessment, SAM-DJSI 54
  • Summary 55
  • Ecopetrol is fully committed to deliver on its 2020 strategic goals Ecopetrol: a sustainable and reliable investment • E&P sound strategy and asset base to raise production and add reserves • Projects to improve returns in refining and deliver high quality products • Diversified markets and increasing exports • New business model to expand transport infrastructure and provide services • Financial strength to fund growth and effective cost control • High returns on investments and thorough Capex allocation • Improving HSE performance • Recognized CSR practices - part of DJSI (World) since 2011 • Strong Corporate Governance 56
  • Investor Relations • Phone + 571 234 5190 • Email investors@ecopetrol.com.co • Website www.ecopetrol.com.co 57
  • SEP ENERGY FOR THE FUTURE Ecopetrol S.A. All rights reserved. The re production of this presentation is forbidden without the written authorization of Ecopetrol S.A. 58 58
  • Corporate Group 1P Reserves: 2008 - 2011 1P Reserves* (million barrels of oil & gas equivalent) 193% IRR ** RRI** 351% 46% 1,538 1,714 164% 1,857 1,137 2008 2009 2010 2011 * Estimated using SEC prices and methodology ** RRI: Reserve replacement index Source: Ecopetrol 59
  • Main fields by region in Colombia Region Share Central 26% East Main fields Production* (mboed) 18% Castilla Chichimene 115 38 Rubiales + Quifa 121 Northeast 21% Guajira Cusiana Middle Magdalena 16% La Cira Nare 22 16 Catatumbo 10% Tibú 2 South 8% Orito Tello 3 5 Minor fields 1% 60 37 * EC´s production Jan-Sep of 2012 Source: Ecopetrol 61
  • Central Region: Meta province (Llanos Orientales) Main fields Castilla Chichimene Rubiales-Pirirí Quifa Source: Ecopetrol Production (mboed) • Heavy crude (13° API) • Oil in place: 5.5 bn boe (e) • 2012: 60 wells (e) • Ecopetrol´s interest: 100% • Heavy crude (9° API) • Oil in place: 2.8 bn boe (e) • 2012: 40 wells (e) • Ecopetrol´s interest: 100% • Heavy crude (13.5° API) • Oil in place: 4.45 bn boe (e) • 2012: 193 wells (e) • Ecopetrol´s interest: Rubiales 60% - Piriri 50% • Heavy crude (13.5° API) • Oil in place: 1.87 bn boe (e) • 2012: 87 wells (e) • Ecopetrol' interest: 40% 98 110 114 2010 2011 2012 (e) 19 32 47 2010 2011 2012 (e) 72 96 102 2010 2011 2012 (e) 2 2010 (e) estimated 15 20 2011 2012 (e) 62
  • Middle Magdalena Region Main fields Production (mboed) ** Infantas Casabe Nare • Medium crude (22-24° API) • Oil in place: 1.8 bn boe (e) • 2012: 47 wells (e) • Ecopetrol´s interest: 100% • Heavy crude (11-12° API) • Oil in place: 1.3 bn boe (e) • 2012: 87 wells (e) (*) • Ecopetrol´s interest: 50% 27 31 35 2010 La Cira • Medium crude (20-32° API) • Oil in place: 3.9 bn boe (e) • 2012: 139 wells (e) • Ecopetrol´s interest: 52% 2011 2012 (e) 17 19 24 2010 2011 2012 (e) 26 32 32 2010 2011 2012 (e) (e) estimated (*) 25 Abarco Fase I, 10 Abarco Fase II, 18 Underriver Fase II, 5 Underriver Fase III, 29 Moriche Fase III (**) Prod 100% Source: Ecopetrol 63
  • Northeast Region: Casanare and Guajira provinces Main fields Production (mboed) • Dry Gas • Oil in place: 1.283 mboe • 2012: 3 wells ** • Ecopetrol´s interest: 57% (2012) Guajira Ballena – Riohacha Chuchupa • Light crude (31° - 36 ° API) • Oil in place: 1.783 mboe • 2012: 2 wells ** • Ecopetrol´s interest: 69% (2012) Cusiana Cupiagua Cupiagua – Cupiagua Sur Piedemonte Pauto - Floreña Source: Ecopetrol • Light crude (>40° API) • Oil in place: 1.585 mboe • 2012: 7 wells (e)** • Ecopetrol´s interest: 100% • Light crude (41° - 45 ° API) • Oil in place: 985 mboe • 2012: 4 wells (e) ** • Ecopetrol´s interest: 50% (2012) ** Includes new wells, sidetracks, deepening , workover, among others. 68 64 61 2010 2011 2012 (e) 35 34 2011 2012 (e) 23 24 2010 2011 2012 (e) 11 15 2010 2011 24 2010 17 (e) estimated 22 2012 (e) 64
  • Catatumbo Region: Arauca - Casanare Main fields Cravo Norte Production (mboed) • Light crude (29.5° API) • Oil in place: 1.9 bn boe (e) • 2012: 358 wells (e) • Ecopetrol´s interest: 73% Rancho Hermoso • Light crude (31.2° API) • Oil in place: 0.14 bn boe (e) • 2012: 15 wells (e) • Ecopetrol´s interest: 82% Rondón • Light crude (31.2° API) • Oil in place: 0.05 bn boe (e) • 2012: 23 wells (e) • Ecopetrol´s interest: 50% 53 48 42 2010 2011 2012 (e) 22 21 2010 2011 2012 (e) 12 11 10 2010 2011 (e) 2012 (e) 7 (e) estimated Source: Ecopetrol 65
  • South Region: Putumayo, Huila and Tolima provinces Main fields Occidente Production (mboed) • Light Crude: 32,2° API • Oil in place: 276 mmboe • 2012: 0 wells (waiting the Terciarios Espinal 2,6 2010 2011 “Environmental Management Plan”)* • Ecopetrol´s interest: 100% Dina 3,0 • Medium Crude: 18,4° API • Oil in place: 260 mmboe • 2012: 1 well (e) • Ecopetrol´s interest: basic production rate: 100%, incremental production rate: 31% • Light Crude: 28° API • Oil in place: 253 mmboe • 2012: 10 wells (e) • Ecopetrol´s interest: 55% 1,8 2012 (e) * 6,8 3,8 4,6 2010 2011 3,4 3,5 3,4 2010 2011 2012 (e) 2012 (e) (e) estimated Source: Ecopetrol 66
  • Financial results driven by rising production, higher prices and cost saving initiatives Operating 20,00 39% 39% 4,2 6,5 3,8 7,0 2007 2008 2009 2010 29% 36% 43% 13,0 10,00 Income (USD bn) and Margin (%) - Operating income Net Income (USD bn) 2007 Ebitda (USD bn) 47% 2011 19% 5,0 2,4 2008 2009 Net income 27% 23% 8,4 4,3 2010 Net margin 2011 50% 45% 38% & Ebitda Margin (%) 45% 15,1 4,5 6,4 2007 Jan-Sep-12 0,0% 27% 23% 2,2 9,9 50,0% Operating margin 36% and Net Margin (%) 40% 2008 4,8 2009 Ebitda Source Ecopetrol S.A., Does not include subsidiaries 8,6 2010 2011 6,3 Jan-Sep-2012 48% 11,9 Jan-Sep-2012 Ebitda Margin 67
  • Financial obligations Local Syndicated Loan International Bond 2019 Local Bonds * • Outstanding: COL$ 2.0 trillion • Term: 7 yrs. (including 2yr. grace period) • Interest rate: DTF + 4% T.A. • Amortization: Semiannual • Outstanding: US$1.5 billion • Coupon 7.625% (Semiannual) • Term: 10 yrs. (Jul. 23 / 2019) • Amortization: bullet • Ratings: Moody´s Baa2 (positive) / S&P BBB- (stable) / Fitch BBB- (stable) • Outstanding: COL$1 trillion • Amortization: Bullet • Ratings: Fitch AAA (local rating) • Term: Coupon (inflation indexed) Outstanding (COL $mn) Maturity Profile (COP Tn) Source: Ecopetrol * Does not include subsidiaries 5 years 7 years 10 years 30 years IPC + 2.80% IPC + 3.30% IPC + 3.94% IPC + 4.90% $97,100 $138,700 $479,900 $284,300 3,02 0,44 0,44 0,44 0,54 0,22 0,14 0,00 2012 2013 2014 2015 2016 2017 2018 0,48 2019 0,28 2020 2040 68
  • Dividend payout ratio of ~ 70% Dividend per share (COP) and payout ratio Extraordinary dividend $ 37 Ordinary dividend $ 105 $ 145 $ 263 $ 115 Dividend yield Source: Ecopetrol $ 91 2008 Payout ratio $ 115 2009 2010 2011 2012 89.9% 76.5% 70.1% 70.3% 79.9% 5.0% 9.2% 2.9% 3.7% 6.0% 69
  • Primary offerings and Current Shareholders Primary Equity Offerings of Ecopetrol USD 2.8 bn 20.0% Ecopetrol´s shareholders (Sep 30/2012) Foreign inv. in ord. shares 0.7% 10.1% ADRs Other 1.5% Instit. Instit. Inv. 1.6% (Colombia) 4.1% Retail inv. 3.6% US$1.3 bn* 1.6%* 8.3% 469 thousand shareholders Total Authorized Round 1 (2007) Round 2 (2011) Law 1118 Round 3 (TBD) Rep. Of Colombia, 88.5% Proceeds (USD bn) Source: Ecopetrol 70
  • Exploration and Production Costs F&D cost 2009-2011 USD/bl Latin America Lifting cost 2011 USD/bl Source: Herold and Ecopetrol 71