Ecopetrol S.A. is a Colombian Company organized under a public limited company structure, at a national order, linked to the Ministry of Mines and Energy. It is a mixed economy company, of a commercial nature integrated into the oil and gas industry, that participates in all the hydrocarbon value chain: exploration, production, transportation, refining and commercialization.
ISSUE 112 | 2022
Raúl Serrano
It has operations located in the central, south, eastern and north regions of Colombia, as well as abroad. It has two refineries in Barrancabermeja and Cartagena. Through its subsidiary Cenit, which is a company specialized in transportation and logistics of hydrocarbons, it owns three ports for export and import of fuels and crude oil in Coveñas (Sucre) and Cartagena (Bolívar) with access to the Atlantic, and Tumaco (Nariño) in the Pacific.
Cenit also owns most of the country’s oil and polyduct pipelines that interconnect production systems with large consumption centers and maritime terminals. Ecopetrol also has a stake in the biofuels business and is present in Brazil, Mexico and the United States (Gulf of Mexico and Permian Basin in Texas).
Cenit también es propietaria de la mayor parte de los oleoductos y poliductos del país que intercomunican los sistemas de producción con los grandes centros de consumo y los terminales marítimos. Ecopetrol también tiene participación en el negocio de los biocombustibles y presencia en Brasil, México y Estados Unidos (Golfo de México y Permian Texas).
Ecopetrol’s shares are listed on the Colombian Stock Exchange and on the New York Stock Exchange represented in ADR (American Depositary Receipt). The Republic of Colombia is the majority shareholder with a stake of 88.49%. Its incorporation as a new active member of the Association of Oil, Gas and Renewable Energy Companies of Latin America and the Caribbean (ARPEL) has recently been confirmed.
STRATEGIC VISION
Ecopetrol S.A. has just announced the launch of its strategic vision for 2040, and the operational and financial goals for 2022 – 2024 period (22 – 24 Plan). The long-term strategy of Ecopetrol Group (GE), called “Energy that Transforms”, responds to the current challenges in environmental, social and governance matters, focusing on generating sustainable value for all its stakeholders.
“Energy that Transforms” positions Ecopetrol as an integrated energy group, which participates in all the hydrocarbon’s value chain (exploration, production, transportation, refining and commercialization) and in linear infrastructure, both in energy transmission and in roadways concessions, and the company hopes to continue diversifying into businesses that will allow it to continue reducing its carbon footprint and advance in achieving its goal of being a company with net zero carbon emissions by 2050.
“Regarding natural gas, a strategic energy source towards energy transition, the company’s 22-24 plan considers investments in projects for more than USD 1.8 billion…”
INVESTMENTS
• Average investment: between USD 5,200 and USD 6,000 million annually by 2040.
• Between 2022 and 2024, an organic investment will be in the range of USD 17,000 and USD 20,000 million (between COP 65 and COP 76 billion) – where 69% will be allocated to exploration and production projects in the basins of Piedemonte Llanero, Magdalena Valley, the offshore Colombian Caribbean and internationally in the United States and Brazil.
• Regarding non-conventional, investments of USD 1,870 million are expected by 2024, to continue the growth in the Permian basin in the United States, and investments of more than USD 80 million in the Kalé and Platero Integral Research Pilot Projects, located in Magdalena Valley in Colombia.
• Regarding natural gas, a strategic energy source for energy transition, the company’s 22-24 plan includes investments in projects for more than USD 1.8 billion, highlighting the development of exploration and production projects in Piedemonte Llanero basins, Continental Caribbean and offshore.
• Regarding the transportation segment, the company’s 22 – 24 plan is considering transported volumes , which are expected to exceed one million barrels per day, in line with production and demand dynamics for liquid fuels in the country; backed by investments between USD 800 and USD 900 million.
• The refining segment will have investments between USD 1,200 and USD 1,400 million between 2022 and 2024, focused on guaranteeing the reliability and sustainability of operations in Barrancabermeja and Cartagena refineries, as well as on the development of fuel quality programs and wastewater management.
• In addition, the value of different products will be strengthened through commercial strategies, to maximize the commercialization margin at 1 USD/Bl, annually between 2022 – 2030, diversifying heavy crude destinations and taking advantage of the quality and reliability of supply, as well as the integration of logistics based on customers. On the other hand, the company is aiming to achieve incremental commercialization margins between 0.17 and 0.30 USD/Bl per year, between 2022 – 2030, for crude oil from international affiliates and third parties.
• For the product lines related to energy transmission and roadways concessions, the company will seek to continue the path of growth both in new geographies and in existing ones, taking advantage of ISA’s strategic position as a leader in the energy transmission business in Latin America. The 22-24 plan captures the benefits of incorporating ISA into Ecopetrol Group, with a contribution close to 20% of GE’s EBITDA during the execution time frame of the 22-24 plan.
• The foregoing will be supported by ISA, but at the same time, by a gradual incursion into emerging businesses aligned with the new world trends, to mitigate the effects of climate change such as the production of low-carbon hydrogen as an energy source, CO2 capture and storage (CCUS) and Natural Climate Solutions (SNC).
• The value proposition includes the diversification into low-emission businesses, which will represent between 30% and 50% of GE’s EBITDA by 2040. For this, in the next three years, more than USD 200 million will be invested in green hydrogen projects in Cartagena and Barrancabermeja refineries, and in CO2 capture and storage projects, both through emerging technologies such as CCUS and SNC projects.
