Ecopetrol (EC) 6-K Interim Unconsolidated Financial Statements

ECOPETROL S.A.

Interim Unconsolidated Financial Statements

For the six-month periods ended June 30, 2013 and 2012
(unaudited) and the year ended December 31, 2012

ECOPETROL S.A.

Unconsolidated Balance Sheets 

As at June 30, 2013 (unaudited) and December 31, 2012

(Expressed in millions of Colombian pesos)

	June 30,			December 31,
	2013			2012
Assets
Current assets:
Cash and cash equivalents (notes 2 and 3)		2,773,625			5,260,111
Investments (notes 2 and 4)		767,307			1,367,014
Accounts and notes receivable, net (notes 2 and 5)		6,444,633			4,512,756
Inventories, net (note 6)		2,326,607			2,393,400
Advances and deposits (notes 2 and 7)		5,600,702			4,306,331
Prepaid expenses (note 8)		80,676			70,490
Total current assets		17,993,550			17,910,102
Non-current assets:
Investments (notes 2 and 4)		28,245,109			18,651,177
Accounts and notes receivable, net (note 5)		1,572,514			1,562,097
Advances and deposits (notes 2 and 7)		175,429			163,532
Deposits held in trust (note 9)		312,984			323,665
Property, plant and equipment, net (notes 2 and 10)		18,129,412			22,935,477
Natural and environmental resources, net (notes 2 and 11)		15,488,365			15,694,807
Deferred charges (note 12)		2,950,436			3,327,021
Other assets (notes 2 and 13)		3,287,457			3,402,438
Valuations (note 20 )		10,269,344			16,677,664
Total assets		98,424,600			100,647,980
Liabilities and Shareholders’ Equity
Current liabilities:
Financial obligations (note 14)		118,064			574,712
Accounts payable and related parties (notes 2 and 15)		15,586,753			10,522,981
Taxes, contributions and duties payable (notes 2 and 16)		3,757,509			7,177,441
Labor and pension liabilities (notes 2 and 17)		212,583			207,037
Estimated liabilities and allowances (notes 2 and 18)		1,273,755			1,134,859
Total current liabilities		20,948,664			19,617,030
Non-current liabilities:
Financial obligations (notes 2 and 14)		5,833,187			4,900,907
Labor and pension liabilities (notes 2 and 17)		4,257,292			4,063,881
Taxes, contributions and duties payable (note 16)		476,494			476,494
Estimated liabilities and allowances (note 18)		4,187,209			4,227,341
Other long-term liabilities (note 19)		2,245,186			2,103,815
Total liabilities		37,948,032			35,389,468
Shareholders’ equity:
(Note 20 and see attached unconsolidated statement of changes in shareholders’ equity )		60,476,568			65,258,512
Total liabilities and shareholders’ equity		98,424,600			100,647,980
Memorandum accounts (note 21):
Debtor		141,851,795			131,388,436
Creditor		(128,623,429	)		(109,085,671	)

The accompanying notes are an integral part of the unconsolidated financial statements.

2

ECOPETROL S.A.

Unconsolidated Statements of Financial,

Economic, Social and Environmental Activity (unaudited)

For the six-month periods ended June 30, 2013 and 2012

(Expressed in millions of Colombian pesos, except for net earnings per share,

which are expressed in Colombian pesos)

	June 30, 2013			June 30, 2012
Sales (note 22):
Domestic sales		10,270,225			10,002,750
Foreign sales		19,824,291			20,238,684
Total revenues		30,094,516			30,241,434
Cost of sales (note 23)		18,159,318			16,274,648
Gross income		11,935,198			13,966,786
Operating expenses (note 24):
Administration		325,111			303,188
Operating and projects		1,557,706			1,583,444
Operating income		10,052,381			12,080,154
Non-operating income (expenses):
Financial income (expenses), net (note 25)		67,238			(258,597	)
Pension expenses (notes 17 and 26)		(314,908	)		(305,796	)
Gain from inflation (note 27)		-			10,735
Other income (expenses), net (note 28)		190,259			8,332
Results from companies accounted under the equity method, net (note 29)		433,188			410,616
Income before income tax provision		10,428,158			11,945,444
Income tax provision (note 16)		3,678,669			3,926,913
Net income for the period		6,749,489			8,018,531
Net earnings per share		164,15			195,02

The accompanying notes are an integral part of the unconsolidated financial statements.

3

ECOPETROL S.A.

Unconsolidated Statements of Changes in Shareholders’ Equity (unaudited)

For the six-month periods ended June 30, 2013 and 2012

(Expressed in millions of Colombian pesos, except for dividends per share, which are expressed in Colombian pesos)

	Subscribed		Additional		Legal and			Incorporated		Equity						Public Accounting			Accumulated			Total
	and paid		paid-in		other			institutional		Method			Valuation			Regime			retained			Shareholders’
	capital		capital		reserves			equity		surplus			surplus			effect			Earnings			Equity
Balance as at December 31, 2011		10,279,175		6,788,144		9,179,411			174,080		4,358,294			9,479,961			(696,360	)		15,448,333			55,011,038
Distribution of dividends ($300 per share)		-		-		-			-		-			-			-			(12,335,009	)		(12,335,009	)
Additional paid-in capital		-		9,648		-			-		-			-			-			-			9,648
Additional paid-in capital receivable		-		152,848		-			-		-			-			-			-			152,848
Valuation surplus		-		-		-			-		-			(121,908	)		-			-			(121,908	)
Valuation of property, plant and equipment		-		-		-			-		-			-			83			-			83
Legal reserve appropriation		-		-		187,958			-		-			-			-			(187,958	)		-
Regulatory Decree 2336/95 reserve appropriation		-		-		1,829,362			-		-			-			-			(1,829,362	)		-
Corporate Group unrealized gain reserve appropriation		-		-		2,123,538			-		-			-			-			(2,123,538	)		-
Transportation infrastructure integrity strengthening reserve appropriation		-		-		605,135			-		-			-			-			(605,135	)		-
Release of Corporate Group Companies’ unrealized profits reserve from previous years		-		-		(1,086,070	)		-		-			-			-			1,086,070			-
Release of the dividend payment (shares issued in 2011) reserves		-		-		(449,904	)		-		-			-			-			449,904			-
Release of the Regulatory Decree 2336/95 reserve from prior year		-		-		(96,695	)		-		-			-			-			96,695			-
Equity method surplus exchange rate adjustment		-		-		-			-		(538,093	)		-			-			-			(538,093	)
Foreign subsidiary conversion adjustment		-		-		-			-		273,263			-			-			-			273,263
Net income for the period		-		-		-			-		-			-			-			8,018,531			8,018,531
Balance as at June 30, 2012		10,279,175		6,950,640		12,292,735			174,080		4,093,464			9,358,053			(696,277	)		8,018,531			50,470,401
Balance as at December 31, 2012		10,279,175		6,954,247		12,292,735			174,080		3,923,893			16,677,664			(16,232	)		14,972,950			65,258,512
Distribution of dividends ($291 per share)		-		-		-			-		-			-			-			(11,964,959	)		(11,964,959	)
Additional paid-in capital receivable		-		10		-			-		-			-			-			-			10
Valuation surplus		-		-		-			-		-			(6,408,320	)		-			-			(6,408,320	)
Valuation of property, plant and equipment		-		-		-			-		-			-			1,141			-			1,141
Regulatory Decree 2336/95 reserve appropriation		-		-		215,406			-		-			-			-			(215,406	)		-
Corporate Group unrealized gain reserve appropriation		-		-		3,461,742			-		-			-			-			(3,461,742	)		-
New explorations reserve appropriation		-		-		2,595,111			-		-			-			-			(2,595,111	)		-
Investment projects implementation reserve appropriation		-		-		2,628,878			-		-			-			-			(2,628,878	)		-
Infill drilling campaign reserve appropriation		-		-		1,260,000			-		-			-			-			(1,260,000	)		-
Release of Corporate Group's unrealized profits reserve from previous years		-		-		(2,595,111	)		-		-			-			-			2,595,111			-
Release of the transportation infrastructure integrity strengthening reserve		-		-		(605,135	)		-		-			-			-			605,135			-
Release of the Regulatory Decree 2336/95 reserve from prior year		-		-		(1,829,362	)		-		-			-			-			1,829,362			-
Release of the Corporate Group's reserve for unrealized gains		-		-		(2,123,538	)		-		-			-			-			2,123,538			-
Equity method surplus exchange rate adjustment		-		-		-			-		909,944			-			-			-			909,944
Foreign subsidiary conversion adjustment		-		-		-			-		5,930,751			-			-			-			5,930,751
Net income for the period		-		-		-			-		-			-			-			6,749,489			6,749,489
Balance as at June 30, 2013 (note 20)		10,279,175		6,954,257		15,300,726			174,080		10,764,588			10,269,344			(15,091	)		6,749,489			60,476,568

The accompanying notes are an integral part of the unconsolidated financial statements.

4

ECOPETROL S.A.

Unconsolidated Statements of Cash Flows (unaudited)

For the six-month periods ended June 30, 2013 and 2012

(Expressed in millions of Colombian pesos)

	June 30, 2013			June 30, 2012
Cash flow from operating activities:
Net income for the period		6,749,489			8,018,531
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax, net		151,775			126,168
Depreciation of property, plant and equipment		650,829			624,743
Amortizations:
Natural resources		1,550,506			1,316,633
Facility abandonment		182,232			192,828
Pension liabilities for health and education		195,055			191,335
Intangibles		148,392			145,574
Deferred charges		38,925			85,935
Deferred monetary correction, net		-			(10,735	)
Provisions:
Accounts receivable		26,656			11,701
Inventories		3,381			-
Property, plant and equipment		1,182			19,168
Legal disputes and proceedings		24,981			191,128
Pension transfer		157,687			294,456
Other		13			-
Recovery of provisions:
Accounts receivable		(1,974	)		-
Inventories		-			(2,735	)
Property, plant and equipment		(37,554	)		(3,605	)
Abandonment costs		(3,669	)		(134,970	)
Legal disputes and proceedings		(1,381	)		(135,247	)
Other		(21,032	)		(6,170	)
Properties, plant and equipment write-off		11,450			114
Reduction in natural resources and environment		19,438			3,490
Equity method income		(433,189	)		(410,616	)
Net changes in asset and liability transactions:
Account receivables		(1,835,583	)		220,308
Inventories		15,927			(316,743	)
Deferred and other assets		(96,475	)		395,143
Accounts payable and related parties		(223,196	)		1,696,227
Tax payable		(3,011,907	)		(3,387,502	)
Labor and pension obligations		3,902			(14,263	)
Estimated liabilities and allowances		81,177			(68,885	)
Other long-term liabilities		(67,001	)		(114,659	)
Net cash generated by operation activities		4,280,036			8,927,352
Cash flow from investing activities:
Increase in investments		(5,355,770	)		(7,315,711	)
Redemption and sale of investments		7,924,253			6,858,221
Investment in natural and environmental resources		(1,863,039	)		(1,551,182	)
Additions to property, plant and equipment		(975,774	)		(2,026,055	)
Proceeds of sale of property, plant and equipment		102,790			-
Net cash used in investing activities		(167,540	)		(4,034,727	)
Cash flow from financing activities:
Financial obligations		224,534			(245,302	)
Capitalizations		10			-
Dividends, net		(6,823,526	)		(4,887,235	)
Net cash used in financing activities		(6,598,982	)		(5,132,537	)
Net (decrease) increase in cash and cash equivalents		(2,486,486	)		(239,912	)
Cash and cash equivalents at the beginning of the period		5,260,111			4,303,043
Cash and cash equivalents at the end of the period		2,773,625			4,063,131

The accompanying notes are an integral part of the unconsolidated financial statements

5 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

For the six-month periods ended June 30, 2013 and 2012, and the year ended December 31, 2012

(Amounts expressed in millions of Colombian pesos, except for values stated in other currencies, exchange rates and earnings per share, which are expressed in Colombian pesos)

(1) Economic Entity and Principal Accounting Policies and Practices

Reporting Entity

Ecopetrol S.A., (hereinafter Ecopetrol or the Company) was constituted by Act 165 of 1948 and transformed through Extraordinary Decree 1760 of 2003 (as amended by Decree 409 of 2006) and Act 1118 of 2006 into a state-owned stock company and then into a Government-private entity of a commercial nature, at the national level, linked to the Ministry of Mines and Energy, with an indefinite life term. Ecopetrol’s corporate purpose is the development, in Colombia or abroad, of commercial or industrial activities arising from or related to the exploration, production, refining, transportation, storage, distribution, and selling of hydrocarbons, their by-products and associated products, as well as subsidiary operations, connected or complementary to these activities, in accordance with applicable regulations. Ecopetrol’s main domicile is Bogota, Colombia and it may establish subsidiaries, branches and agencies in Colombia or abroad.

Pursuant to Transformation Decree 1760 of 2003, the whole administration of the Colombian Nation’s hydrocarbon reserves, as well as the administration of non-strategic assets represented by stocks and shares in companies, were spun-off from Ecopetrol. Furthermore, Ecopetrol’s basic structure was changed and two entities were created: a) theAgencia Nacional de Hidrocarburos (ANH) was created to issue and develop Colombian oil policies from that point forward (formerly the responsibility of Ecopetrol), and b)Sociedad Promotora de Energía de Colombia S.A., which received the non-strategic assets owned by Ecopetrol.

Act 1118 of December 27, 2006 changed the legal nature of Ecopetrol S.A. and authorized the Company to issue shares to be placed on the market and acquired by Colombian individuals or legal entities. Once the shares corresponding to 10.1% of the authorized capital were issued and placed, at the end of 2007, the Company became a public-private entity of a commercial nature, at the national level, related to the Ministry of Mines and Energy.

Ecopetrol entered into a deposit agreement with JP Morgan Chase Bank, N.A., acting as custodian, for the issuance of ADSs evidenced by ADRs. Each of the ADSs represents 20 of Ecopetrol’s common shares or the right to receive 20 common shares of Ecopetrol.

On September 12, 2008, Ecopetrol submitted an application to the Securities and Exchange Commission (SEC) to register and list the Company’s ADSs evidenced by ADRs on the New York Stock Exchange (NYSE). The Company’s ADSs began trading on the NYSE under the “EC” symbol on September 18, 2008.

On December 3, 2009 the National Oversight Commission for Entities and Securities of Peru (from SpanishComisión Nacional Supervisora de Empresas y Valores del Perú-CONASEV) approved the listing of Ecopetrol’s ADRs on the Lima Stock Exchange and the registration of such securities with the Public Registry of the Securities Market. The ADRs began trading on the Lima Stock Exchange on December 4, 2009, in the Peruvian market under the “EC” symbol.

On August 13, 2010, Ecopetrol began trading its ADRs on the Toronto Stock Exchange – Canada. Thus, Ecopetrol became the first Colombian company listed on the Toronto Stock Exchange.

6 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Between July 27 and August 17, 2011, Ecopetrol carried out the second tier of the public offering, authorized by Act 1118 of 2006. As a result of this process, 644,185,868 common shares were placed at a nominal price of $3,700 per share, for a total amount of $2,383,488. The common shares were registered with the National Registry of Securities and Issuers in accordance with Decree 2555 of 2010. After this, the Colombian Nation’s equity participation in Ecopetrol was 88.49%.

Principal Accounting Policies and Practices

The National Accounting Office(from Spanish Contaduría General de la Nación - CGN) ) adopted the Government Accounting Regime (from Spanish Regimen de Contaduría Publica - RCP) in September 2007, defining its configuration, scope and application. Pursuant to CGN’s Communication No. 20079-101345 of September 28, 2007, the RCP went into effect for Ecopetrol on January 1, 2008.

Basis of Presentation

The preparation of these unconsolidated financial statements was carried out under accounting standards and principles for Colombian Government entities issued by the CGN and other legal provisions. These principles may differ in certain respects from those established by other standards and other control authorities and CGN concepts on specific matters prevail over other regulations.

The accrual method was applied for the accounting recognition of financial, economic, environmental and social aspects.

A structure was established in accordance with the rules for the inspection, supervision, and/or control of Ecopetrol, to define the accounting treatment of operations not covered by the CGN. The structure involves: i) Principal and permanent inspection, supervision, and control: Superintendence of Domiciliary Public Services; ii) Residual control: Superintendence of Corporations and iii) concurring control: Superintendence of Finance, regarding the activities of the Company in its capacity as issuer in the stock market. International Financial Reporting Standards (IFRS) are applied to define regulatory differences, while accounting standards under Generally Accepted Accounting Principles in the United States (US GAAP) are applied for accounting issues related to crude oil and natural gas activities.

The basic unconsolidated financial statements defined by the CGN comprise the Balance Sheet, the Statement of Financial, Economic, Social and Environmental Activity, the Statement of Changes in Shareholders’ Equity and the Statement of Cash Flows. The notes to the unconsolidated financial statements are an integral part thereof.

These unconsolidated financial statements do not consolidate the assets, liabilities, equity or income in subordinated companies. Investments recorded in those companies are recognized using the equity method. The annual unconsolidated financial statements are submitted to the General Shareholders’ Meeting and are the basis for dividend distribution and other appropriations; however, pursuant to legal requirements, the Company must also submit consolidated financial statements to the General Shareholders’ Meeting for approval every year.

Materiality Criterion

An economic fact is material whenever, due to its nature, amount and surrounding circumstances, the knowledge or ignorance of it, may significantly alter the economic decisions of users of such financial information.

7 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

As set forth by the RCP, the information disclosed in the financial statements and financial accounting reports must cover the main affairs of the Government accounting entity in a way that must be significantly close to the truth, so that it is relevant and reliable for decision-making purposes or the required evaluations , based on accounting information objectives. Materiality depends on the nature of the facts or the magnitude of the amounts disclosed or not disclosed.

The unconsolidated financial statements include specific headings in accordance with legal requirements or for elements representing 5% or more of total assets, current assets, total liabilities, current liabilities, working capital, equity and income, as appropriate. In addition, lower amounts are shown when they are deemed to contribute to a better interpretation of financial information.

Use of Estimates

The preparation of unconsolidated financial statements requires that the Company’s Management make estimates and assumptions that could affect the recorded amounts of assets, liabilities, income and explanatory notes to the unconsolidated financial statements. These estimates are carried out in accordance with technical criteria, judgment and premises pursuant to regulations and current legal provisions. Current market value may be different from those estimates.

Foreign Currency Transactions

Foreign currency transactions are recognized in accordance with applicable regulations and recorded at the appropriate exchange rates on the transaction date. Balances denominated in foreign currency are expressed in Colombian pesos at the representative market exchange rates at the end of each period.

The exchange differences resulting from assets adjustments iare recorded in income; exchange differences from adjustments in liabilities are applied to the related assets until they are ready for use or sale; the adjustment is subsequently charged to income. .

According to decree 4918 of December 26, 2007, from the Ministry of Trade, Industry and Tourism, the exchange difference originated in variable income investments in subordinated companies abroad is recorded as higher or lower value of the shareholder’s; equity when investments are effectively made this value affects the income for the period.

During the course of its oil industry activities, the Company can freely deal in foreign currencies, provided that it complies with the provisions of the Colombian exchange rate regime.

Joint Venture Contracts

Joint venture contracts are entered into between Ecopetrol and third parties in order to share the risk, ensure capital, maximize operating efficiency and optimize the recovery of reserves. In these joint ventures, one party is designated as the operator and each party takes its share of the hydrocarbons (crude oil or gas) produced according to its participation in production. When Ecopetrol participates as a non-operator partner, it records the assets, liabilities, revenues, costs and expenses based on information reported by the operators. When Ecopetrol is the operator of the joint venture contract, it records 100% of the assets, liabilities, revenues, costs and expenses, recording on a monthly basis the distribution according to the participation interests of each partner into the applicable line items corresponding to assets, liabilities, expenses, costs and revenues for the associate.

Cash and Cash Equivalents

Cash and cash equivalents are represented by negotiable investments with maturity dates within ninety (90) days following their acquisition, and are recorded as liquidity management investments.

8 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Cash from joint operations in which the Company is the operating partner corresponds to advances from partners according to their contractually agreed participation percentages, and funds are managed in a joint operation exclusive - use bank account.

Derivative Financial Instruments

The Company enters into hedging agreements to hedge against international fluctuations in crude-oil, product prices and exchange rates. The difference between negotiated value and market value generated under hedging operations is recognized as financial income or expense in the statements of financial, economic, social and environmental activities. Ecopetrol does not use these financial instruments for speculative purposes.

Investments

The investments are classified as: i) Liquidity Management Investments, ii) Investments for Policy Purposes and iii) Equity Investments.

i. Liquidity management investments correspond to resources invested in debt and participative securities with the objective of obtaining profits through short-term price fluctuations. Their initial recording corresponds to their historical cost and they are updated based on valuation methods issued by the Colombian Finance Superintendency.

ii. Investments for policy purposes are made up of national or foreign debt securities acquired in compliance with the macroeconomic or internal policies of the entity, which include investments held through their maturity date and those available for sale, the latter being those which are kept for at least one (1) year, as of the first day on which they were classified for the first time, or when they were reclassified.

Investments held to maturity are updated based on the internal rate of return (IRR) as set out in the methodology adopted by the Colombian Finance Superintendency, and the investments for the purpose of macroeconomic policy and available for sale must be updated based on the methodology adopted by the Colombian Finance Superintendency for tradable investments.

iii. Equity investments are classified as being in controlled and uncontrolled entities. Equity investments in controlled entities are recognized at their acquisition cost whenever it is lower than the intrinsic value; otherwise, they are recognized at the intrinsic value and the difference between the purchase price and the intrinsic value corresponds to goodwill.

Their values are updated using the equity method, as established in CGN Resolution 145 of 2008.

Investments in entities in which Ecopetrol and/or its subsidiaries exert significant influence are recorded using the equity method.

Significant influence is defined as the power that the entity has, regardless of whether the percentage of ownership is 50% or lower, to participate in setting and directing the financial and operational policies of another entity for the purpose of obtaining profits from that entity.

Significant influence may be present in one or more of the following ways:

· Representation on the Board of Directors or equivalent governing body of the associated entity;

· Participation in policy-making processes;

· Significant transactions between the investor and the associated entity;

· Exchange of officers; or

· Supplying essential technical information.

9 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Non-strategic equity investments in uncontrolled entities (see note 4) include low or minimum tradability securities, or shares not listed on any stock exchange. They do not enable any type of control or significant influence and are recognized at historical cost; their change in value arises from periodically comparing the cost of the investment to its intrinsic value or its value on the stock market.

Equity variations originated in the adjustment for conversion of the controlled entity are recognized as surplus by the equity method, notwithstanding that the subaccount may show a debit balance; the above in compliance with Resolution 193 of July 27, 2010 issued by the National Accounting Office.

Accounts and Notes Receivable and Allowance for Doubtful Accounts

Debts owed to the Company are recorded at their original amount or at the value accepted by the debtor, subject to periodic updating according to legal provisions in force, or according to agreed contractual terms.

The accounts receivable provision is reviewed and updated periodically based on the age of the balances and the recovery analysis of individual accounts. The Company carries out the necessary administrative and legal steps to recover overdue accounts receivable and to collect interest from clients who do not comply with payment policies.

Accounts and notes receivable are only written-off against the allowance when there is reasonable legal or material certainty of the total or partial loss of the incorporated or represented right.

Related Parties

Assets, liabilities and transactions with companies belonging to the Ecopetrol Business Group are presented as Related Parties.

Inventories

Inventories include goods that are extracted, in progress, transformed and acquired for any reason, for the purpose of being sold, transformed and consumed in the production process, or as part of services delivered. Ecopetrol uses the perpetual inventory system.

Inventories are recorded at historical cost or at purchase cost, including direct and indirect charges incurred to prepare the inventory for sale or production.

The appraisal of inventories is measured using the weighted average method, taking into account the following parameters:

· Inventories of oil produced by the Company, at average production cost;

· Crude oil purchases, at acquisition costs, including transportation and delivery costs incurred;

· Inventory of finished products, at total production costs;

· Inventory of products in progress, at production costs; and

· Inventory of raw materials, at weighted average cost.

Raw materials and supplies in joint ventures are controlled by the operator and reported in a joint account at the acquisition cost (recorded in the original currency at average costs). Inventory consumption is charged to the joint venture as cost, expense or investment, as appropriate.

Furthermore, inventories are appraised at the lower value of market cost or average cost, and inventories in-transit are appraised at actual cost incurred. At the end of the fiscal year allowances are calculated to take into account impairment, obsolescence, excess, slow movement or loss of market value.

10 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Properties, Plant and Equipment and Depreciation

Properties, plant and equipment are recorded at inflation-adjusted historical cost until 2001. This cost includes financial expenses and the exchange rate difference for foreign currency acquisition until commissioning of the asset, as well as financial revenues from the unused portion of financial obligations acquired to finance investment projects. When an asset is sold or disposed of, the adjusted cost and accumulated depreciation are written-off and any gain or loss is recorded in the year’s results.

Depreciation is calculated on the total acquisition cost using the straight-line method, based on the assets’ useful life which is periodically reviewed. Annual depreciation rates are as follows:

	%
Buildings and pipelines		5
Plant and equipment		10
Transportation equipment		20
Computation equipment		33.3

Disbursements for maintenance and repairs are recorded as expenses. Significant disbursements that improve efficiency of an asset or extend its useful life are capitalized as an increase in the value of that asset.

The value of property, plant and equipment is subject to periodic revaluation by comparing the net book value with the value determined through technical appraisals. When the value of an asset’s technical appraisal is greater than its net book cost, the difference is recorded as an asset valuation and credited to the surplus account for equity valuation; otherwise it is recorded as an allowance for devaluations and charged to results.

Upon termination of an association contract, Ecopetrol receives, at no cost, the property, plant equipment, materials and amortizable oil investments belonging to the associate. This transaction does not affect Ecopetrol’s results.

Natural and Environmental Resources

Ecopetrol follows the successful-efforts method of accounting for investments in oil exploration and production or development expenses. Geological and geophysical studies are recorded in expenses as they are incurred. Acquisition and exploration costs are capitalized until it is determined whether the exploration drilling was successful or not. If they are not successful, all of the costs incurred are charged to expenses. When a project is approved for development, the accumulated value of the acquisition and exploration costs are classified in the oil investment account. Capitalized costs also include asset retirement costs. Asset and liability balances related to asset retirement costs are updated every year. Production and support equipment is accounted for on a cost basis and is included in property, plant and equipment subject to depreciation.

Oil investments are amortized by applying the amortization factor to technical units of production and proven developed reserves per field, royalty-free, estimated as at December 31 of the immediately preceding year. The amortization charged to results is adjusted at the end of December, recalculating the DD&A (Depletion, Depreciation and Amortization) as of January 1 of the current year, based on the reserve study updated at the end of the current year.

11 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

In the same way that it receives property, plant and equipment upon termination of an association contract, Ecopetrol receives, at no cost, the associate’s amortizable oil investments.

Ecopetrol S.A. has established a corporate process for reserves led by the Reserves Directorate, which reports directly to the Vice-President of Corporate Finance. The reserves are audited by internationally recognized external consultants and approved by the Company’s Reserves Committee. Proven reserves consist of the estimated quantities of crude oil and natural gas demonstrated with reasonable certainty by geological and engineering data to be recoverable in future years from known reserves under existing economic and operating conditions, that is, at the prices and costs that apply at the date of the estimate.

Since Ecopetrol became an issuer on the Colombian Stock Exchange (BVC, per its acronym in Spanish) and the NYSE, the Company has applied the methodology approved by the SEC for estimating reserves. Under this methodology the reference price is the arithmetic average of the BRENT price for crude oil over the past twelve (12) months.

When it is determined that a well located in the exploration zone does not have proven reserves, it is classified as dry or non-commercial, and the accumulated costs of such well are taken to expenses in the same year in which this is determined.

Estimating hydrocarbons reserves is subject to several uncertainties inherent to the determination of proven reserves, the production recovery rates, the timeliness in making the investment to develop oilfields and the degree of maturity of fields.

Pursuant to the provisions of Resolution 494 of December 22, 2009, issued by the ANH, Ecopetrol complies with the delivery of information to the ANH using the methodology of (SPE-PRMS) Oil Resource Administration System. The reserves shown in the reports are audited by three independent reservoir engineering firms.

Deferred Charges

Deferred charges include: i) deferred income tax resulting from the temporary differences between the basis for determining commercial gains and net taxable income at the end of each period. The deferred tax is amortized during the periods in which the temporary differences that originated it are reversed. ii) The tax on equity, which is amortized until 2014; iii) investments made in development of collaboration contracts that are amortized based on technical production units.

Other Assets

Other assets include goodwill, which corresponds to the difference between the purchase value of equity investments in controlled or joint-control entities, and their intrinsic value, which reflects the economic benefits expected to be achieved from the investment, created by good name, specialized personnel, preferential credit reputation, prestige due to sale of better products and services, favourable location and the expectations of new businesses, among other things.

Goodwill is amortized using the straight-line method over the term for expected recovery of the investment,which is from 10 to 18 years. At the close of each accounting period, Ecopetrol must evaluate goodwill to determine whether the conditions for the generation of future economic benefits still exist; otherwise, the asset must be writen-off. If the book value of equity investment plus the book value of goodwill, which includes its historical cost added to all price adjustments and amortizations, is greater than the market value, the asset should, as a result of such difference, be written-off in the related period, with charge to results, and the reasons for said decision should be disclosed.

12 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Intangible assets such as software, licenses and patents are recognized at acquisition, development or production cost. Intangible assets are amortized using the straight-line method over the periods during which the benefits arising from the incurred costs and expenses are expected to occur, or during the term of the legal or contractual coverage of the granted rights.

Goods acquired through financial leasing are subject to depreciation in order to recognize the loss of operational capacity by their utilization. In public accounting entities of the general government, depreciation of goods acquired through financial leasing affects directly the equity, except for assets used in activities of production of goods and rendering of services readily individualized that must be recognized as cost or expense.

Improvements and works performed on leasehold property or third party property different from those that can be recognized as property, plant and equipment will be amortized over the shortest period between the term of the contract covering the use of the property, and the estimated useful life of the assets, as a result of the additions or improvements made, only when the cost of the works and improvements made is not reimbursable. In the case of public accounting entities of the government, amortization affects equity, except for works and improvements in properties used for activities of production of goods and rendering of services readily individualized that must be recognized as cost.

Valuations

a) Investments

Valuations correspond to the differences between the net book value of the investments and their intrinsic value or quoted price on the stock exchange.

b) Properties, plant and equipment

Valuations and the valuation surplus of properties, plant and equipment correspond to the difference between the net book cost and the market value for real estate or the Current Use Value (CUV) for plant and equipment, determined by specialists registered with the Colombian Real Estate Association or by suitable technical personnel, as appropriate.

The methodology used for valuation of plant and equipment is the Current Use Value (CUV), for running businesses, for the economic valuation of assets taking into account the facilities’ current conditions and their useful life in terms of production capability and ability to generate income.

It is not mandatory to adjust the value of moveable property when its historical value, taken individually, is lower than 35 current minimum monthly legal minimum wages, nor is it necessary for properties, plant and equipment located in high risk zones.

Financial Obligations

Public credit operations correspond to any action or contract which, in compliance with legal regulations on public credit, are addressed to supply the Company with resources, goods and services under specific payment terms such as loans, issue and placement of bonds and public credit securities, and suppliers’ credit.

With respect to loans, public credit operations must be recorded for the actual disbursed amount, while bonds and securities placed are recorded at their nominal value. Placement costs are recorded directly to expenses.

13 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Income Tax

The income tax provision of June 2013 was computed applying to the accounting profit before taxes, the effective taxation rate computed for May 2013. This rate includes both the income tax and the income tax for equality CREE.

The effect of temporary differences that imply the payment of a lower or higher income tax in the current year, is accounted for as deferred tax asset or liability, both for the income tax and for the income tax for equality CREE, as applicable, provided that there is a reasonable expectation that such differences will be reversed in the case of the deferred tax asset, or sufficient taxable income is generated to recover the tax in respect to the deferred tax liability. The deferred tax is calculated at the rate of 34% (25% ordinary income tax and 9% income tax for equality CREE) or of 33% (25% ordinary income tax and 8% income tax for equality CREE) as applicable.

Labor and Pension Obligations

Salaries and benefits for Ecopetrol staff are governed by the Collective Labor Agreement 01 of 1977, and in their absence, by the Substantive Labor Code. In addition to the legally mandated benefits, employees are entitled to fringe benefits agreed, which are subject to the place of work, type of work, length of service, and basic salary. Annual interest of 12% is recognized on accumulated severance amounts for each employee, and the payment of indemnities is provided for when special circumstances arise that result in the non-voluntary termination of the contract, without just cause, and in periods other than the probationary period.

The actuarial computation includes active employees, as described in the paragraphs below, with indefinite term contracts, pensioners and heirs, for pension, health care and education plans; similarly, it includes pension bonds for temporary employees, active employees and voluntary retirements. Health care and education obligations do not comprise the pension liabilities; these are part of the legal benefit obligations.

All social benefits of employees who joined the Company before 1990 are the responsibility of Ecopetrol, without the involvement of any social security entity or institution. The cost of health services for the employee and his/her relatives registered with the Company is determined by means of the morbidity table, prepared based on facts occurring during the year. Likewise, Ecopetrol calculates educational allowances according to experience, based on the annual average cost of each business, subdivided in accordance with the type of studies: pre-school, elementary, high school and university.

For employees who joined the Company subsequent to the entry into effect of Act 50 of 1990, the Company makes periodic contributions for severance payments, pensions and occupational injuries to the funds created for these respective obligations. Likewise, Act 797 of January 29, 2003 determined that Ecopetrol employees who joined the Company as of that date would be subject to the provisions of the General Pension Regime.

Pursuant to Legislative Act 01 of 2005, enacted by Congress, the pension regimes excluded from the General Social Security System in Colombia expired on July 31, 2010. In accordance with the provisions therein, the Ministry of Social Protection’s judicial pronouncement on the matter and the analysis conducted by Ecopetrol’s labor advisers, it was concluded that those workers who had met the age and continuous or discontinuous service time requirements of the law, the Collective Bargaining Agreement in effect and/or Agreement 01 of 1977, prior to August 1, 2010, had consolidated their right to their pension. It was, however, mandatory for other workers, who were not covered, to join the General Pension System. The pension administrator chosen by the worker (either Colpensiones or Private Pension Fund or whichever may correspond) would be responsible for recognizing and paying the respective pension.

14 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

As set out in Decree 941 of 2002, upon approval of the actuarial computation by the Ministry of Finance in October 2008, and upon approval of the mechanism by the Ministry of Social Protection through the Administration Act of December 29, 2008, the Company partially switched over the value corresponding to monthly pension payments from its pension liabilities, transferring the said liabilities and their underlying amounts to pension-related autonomous equities (PAP, per its acronym in Spanish). The funds transferred, and returns on those funds, cannot be redirected nor can they be returned to the Company until all of the pension obligations have been fulfilled.

The transferred liability corresponds only to pension allowances and pension bonds; the portion relating to health care and education services remains within Ecopetrol’s labor liabilities.

At each period end, Ecopetrol S.A. must review the amount reported by the PAP with respect to the value of the pension liability updated based on the latest actuarial computation. In the event that autonomous equity yields are insufficient to cover 100% of the obligation, the Company must recognize an allowance for the difference, which must be funded should the contingency materialize. Ecopetrol remains materially responsible for payment of the pension liabilities.

Through Resolution 1555 of July 30, 2010, the Finance Superintendency replaced the mortality tables used to prepare actuarial computations and stipulated that the effects of the change could be recognized gradually. Subsequently, Decree 4565 of December 7, 2010 modified the accounting standards for amortization of the actuarial computation in effect up to that date. Pursuant to the new decree, the companies that had amortized 100% of their actuarial calculation at December 31, 2009 could gradually amortize the increase in the actuarial computation for 2010 using the new mortality tables, up to 2029.

Given the above, in 2010 Ecopetrol modified its accounting policy for amortization of the actuarial computation of monthly pension payments, pension quotas and bonds (transferred liabilities) and health bonds, and adopted a five - year term starting in 2010, to amortize the increase in the 2010 actuarial computation. Up until 2009, the yearly increase in the actuarial computation was recorded as expenses for the period, given that the actuarial computation was 100% amortized.

Resolution 717 of December 2012 amended the Manual de Procedimiento del Régimen de Contabilidad Pública (Regime of Public Accounting Procedure Manual) with regard to the Accounting Procedure for recognizing and disclosing pension liability, the underlying financial reserve, and related expenses, at items 5 and 44. With regard to item 5, the indications in the previous paragraph lead to the conclusion that this item has no impact on the Company’s activities within its amortization plan.

With regard to item 44, its only impact is to disclose the fact that the Reserve Funds are common funds that are also under the administration of Colpensiones. There are no further implications for Ecopetrol.

Advances Received from Ecogas to Cover BOMT (Build, Operate, Maintain and Transfer) Obligations

Pursuant to the sale of Ecogas by the National Government, and following specific instructions from CGN, the net present value of the future payment scheme in connection with Ecopetrol´s debt toward BOMT contractors was recognized as deferred income. These liabilities are due in 2017, the year when the contract obligations will be fulfilled.

15 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Hydrocarbon Purchases

The Company purchases hydrocarbons that the ANH receives from all production in Colombia, at prices established according to section four of Act 756 of 2002 and Resolution 18-1709 of 2003 issued by the Ministry of Mines and Energy, taking into account international reference prices.

Ecopetrol also purchases hydrocarbons from partners and other producers in Colombia and abroad to meet the Company’s needs and operating plans.

Revenue Recognition

Revenue from crude oil and natural gas sales is recognized at the time of transfer of title to the buyer, including risks and benefits. In the case of refined and petrochemical products, revenue is recognized when products are shipped by the refinery and subsequently adjusted in accordance with the volumes actually delivered. Revenue from transportation services is recognized when products are transported and delivered to the buyer in accordance with sale terms. In other cases, revenue is recognized at the time it is earned and a true, probable and quantifiable right to demand its payment arises.

Under current regulations, Ecopetrol sells at a regulated price and the National Government recognizes for the Company the amount of the subsidy on regular gasoline and diesel (ACPM), granted to local consumers, which is generated by adding the difference, for every day of the month, between the producer’s regulated revenues and the daily price equivalent to the U.S. Gulf Coast reference price, calculated according to origin and multiplied by the daily volumes sold. Resolution 182439 and Decree 4839 of December 2008 establish the procedure for recognizing subsidies in the event they are negative (negative value between parity and regulated prices).

In March 2010, the Ministry of Mines and Energy issued Resolution No. 180522, which revoked provisions contrary to Resolutions 181496 of September, 2008, 182439 of December 30, 2008 and 180219 of February 13, 2009 and modified the formula for calculating the international reference prices for gasoline and diesel.

Resolution 91658 is issued in year 2012, which modifies Resolution 180522 in respect to the subsidy procedure for refiners and importers of regular motor gasoline and diesel (ACPM).

Cost of Sales and Expenses

Costs are recognized at their historic value both for goods purchased for sale and for the accumulated production costs of goods produced and services rendered. Costs are disclosed according to the nature of the operation generating them.

Expenses correspond to the amounts required for the operation of ordinary activities and include those related with activities caused by extraordinary events. Expenses are disclosed in accordance with their nature and the occurrence of extraordinary events.

Costs and expenses are recognized upon receipt of goods or services or when there is certainty that the economic event will occur. Fuel shortages and losses due to theft and explosions are recorded as non-operating expenses.

Abandonment of fields

The Company recognizes estimated liability for future environmental obligations, and its corresponding entry as a higher value for natural resource and environmental assets. The estimate includes the cost of plugging and abandoning wells, dismantling facilities and the environmental recovery of areas and wells. Amortization is recorded as production costs, using the technical-units-of-production method, based on remaining proven developed reserves. Changes resulting from new estimates of liability for abandonment and environmental restoration are accounted for under the corresponding asset.

16 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Depending on the scope of certain partnership contracts, field abandonment costs are taken on by partners according to the same participation percentages set out in each contract. Ecopetrol has not allocated funds to cover these obligations, with the exception of association contracts Casanare, Orocue, Garcero, Estero, Corocora, Monas, Guajira, Tisquirama, and Cravo Norte . However, as activities linked to field abandonment take place, they will be covered by the Company.

Accounting for Contingencies

On the date of issuance of these unconsolidated financial statements, conditions might exist that could result in losses for the Company that will only be known if specific future circumstances arise. The nature, probability of such situations, as well as the amounts involved are evaluated by Management, the Vice-President of Legal Affairs, and legal consultants, so that decisions can be made regarding changes to amounts provisioned and/or disclosed. This analysis includes current legal suits against the Company.

The methodology used to assess the legal proceedings and any contingent obligations is based on the Nation’s credit system used by the Ministry of Internal Affairs and Justice.

A provision is recorded for legal proceedings when there is a conviction at trial court or when the outcome of the risk assessment is “likely to lose”.

Memorandum Accounts

Creditor and debtor memorandum accounts represent the estimated value of facts or circumstances that could affect the Company’s financial, economic, social and environmental situation. They also disclose the value of the goods, rights and obligations that require control, and also include differences between accounting information and the information used for tax purposes.

Net Earnings per Share

Net earnings per share are calculated based on net earnings for the period, divided by the number of subscribed outstanding shares.

The Company does not have share-based employee incentive plans.

Convergence to International Accounting Standards

According to Act 1314 of 2009 and Regulatory Decree 2784 of 2012, the Company has the obligation to start the process of convergence from the accounting and financial reporting information applied in Colombia to International Financial Reporting Standards (IFRS). For this purpose, the Technical Public Accounting Council, through its Strategic Direction, classified companies by groups; the Company belongs to Group 1, the transition period of which starts on January 1, 2014 and the first financial statements under IFRS are to be issued in year 2015.

The implementation plan for transitioning to IFRS was filed with the Finance Superintendency on February, 2013.

17 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(2) Assets and Liabilities Denominated in Foreign Currency

Transactions and balances in foreign currency are converted at the market representative exchange rate certified by the Finance Superintendency of Colombia.

As at June 30, 2013 and December 31, 2012 these unconsolidated financial statements include the following assets and liabilities denominated in foreign currency (converted to Colombian pesos at the closing exchange rates of $1,929.00 and $1,768.23 per US$1, respectively).

	As at June 30, 2013				As at December 31, 2012
	Thousands of dollars		Equivalent millions of pesos		Thousands of dollars		Equivalent millions of pesos
Assets:
Cash and cash equivalents		287,733		555,037		411,089		726,901
Investments		7,516,713		14,499,740		7,697,377		13,610,733
Accounts and notes receivable		1,552,479		2,994,731		1,309,458		2,315,424
Advances and deposits		103,168		199,012		73,214		129,459
Other assets		171,893		331,581		7,832		13,849
		9,631,986		18,580,101		9,498,970		16,796,366
Liabilities:
Financial obligations		1,549,880		2,989,719		1,549,880		2,740,545
Estimated liabilities and allowances		14,720		28,396		14,720		26,029
Accounts payable and related parties		987,089		1,904,094		1,437,214		2,541,324
Other assets		243,805		470,299		278,634		492,689
		2,795,494		5,392,508		3,280,448		5,800,587
Net asset (liabilities) position		6,836,492		13,187,593		6,218,522		10,995,779

(3) Cash and Cash Equivalents

The balance of cash and cash equivalents is as follows:

	As at June 30, 2013		As at December 31, 2012
Banks and corporations (1)		1,821,204		3,811,588
Special funds (2)		700,146		1,269,705
Investments at sight (3)		251,965		-
Cash		310		465
Investment funds		-		178,353
		2,773,625		5,260,111

(1) Corresponds to advances made by partners for the exclusive use of the joint venture, in the amount of $110,435 (2012 - $75,207) and Ecopetrol’s own resources in the amount of $1,710,769 (2012 - $3,736,381).

(2) Corresponds to savings in special funds in pesos in the amount of $394,379 (2012 - $556,756) and in foreign currency of $301,456 (2012 - $708,007) as well as investments in overnight operations in the amount of $4,311 (2012 - $4,942).

18 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(3) Corresponds to bonds issued by entities abroad for $97,638 and Certificates of Deposit (CD) in foreign currency for $154,327.

(4) Investments

The balance of investments is comprised as follows: 

	As at June 30, 2013		As at December 31, 2012
Current:
Fixed yield:
Bonds and securities of private or foreign entities		495,078		654,635
Term deposits		203,708		156,287
Other investments		58,897		-
Specific purpose fund – legal contingencies (1)		9,624		30,297
Bonds issued by the Colombian Government		-		17,219
Treasury securities – TES		-		508,576
Total current		767,307		1,367,014
Non-current:
Variable yield – Shares (2)		27,094,512		13,951,033
Fixed yield:
Bonds and securities of foreign entities		162,832		2,071,957
Bonds issued by the Colombian Government		580,934		998,105
Treasury securities – TES		1,070		1,236,166
Specific purpose fund – legal contingencies (1)		405,761		393,916
Total fixed yield		1,150,597		4,700,144
Total non-current		28,245,109		18,651,177

(1) Corresponds to restricted resources made up by fixed - yield investments entered into based on the court rulings linked to the Derecho Comuneros - Santiago de las Atalayas and Pueblo Viejo de Cusiana proceedings, corresponding to the attachment and seizure of the Royally payments that Ecopetrol, was to have paid pursuant to Royalty Contracts No.15, 15A, 16 and 16A, declared null by statute in the State Council ruling of September 13, 1999.

(2) The following is a breakdown of variable - yield investments represented in shares as at June 30, 2013 and December 31, 2012:

	As at June 30, 2013			As at December 31, 2012
Companies:
Controlled		26,003,784			12,934,793
Significant influence		866,732			792,231
Non-strategic		224,009			224,009
Allowance for investments		(13	)		-
Total		27,094,512			13,951,033

19 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Controlled investments recognized under the equity method as at June 30, 2013 are as follows:

Equity share	Number of shares and/or quotas		Participation percentage		Valuation date	Cost		Book value		Equity Method effect
Controlled
Ecopetrol Capital AG		1,151,000		100.00	June		227,487		307,619		80,132
Sociedad Refinería de Cartagena S.A.		1,870,000		64.71	June		1,156,413		2,045,732		889,319
Polipropileno del Caribe S.A.		206,910,325		49.90	June		259,699		335,143		75,444
CENIT Transporte y Logística de Hidrocarburos S.A.S. (1)		127,110,550		82.35	June		6,355,488		11,953,293		5,597,805
Ecopetrol Pipeline International Limited		40,439,547		100.00	June		870,169		3,386,344		2,516,175
Equion Energía Limited		114,836,072		51.00	June		436,053		1,218,329		782,276
Ecopetrol Global Capital		3,100		100.00	June		8		8		-
Hocol Petroleum Limited		12,000		100.00	June		1,020,378		2,889,327		1,868,949
Andean Chemicals Limited		645,707,273		100.00	June		1,638,773		1,668,894		30,121
Ecopetrol Global Energy S.L.U.		70,151,927		100.00	June		3,320,750		1,914,317		(1,406,433	)
Black Gold Re Limited		120,000		100.00	June		184,079		284,778		100,699
Total							15,469,297		26,003,784		10,534,487

(1) On April 1, 2013 a capital contribution was made to CENIT S.A.S. for a value of $4,076,329, as follows:

Number of shares to be issued in favor of Ecopetrol:		81,526,568
Value of subscribed  and paid capital	$	815,266
Value of additional paid-in capital		3,261,063
Total contribution	$	4,076,329

This contribution was made in kind with the transportation assets that Ecopetrol S.A owned as of the date of capitalization for a total of $6,355,488 as investment value.

Controlled investments recognized under the equity method as at December 31, 2012 are as follows:

Equity share	Number of shares and/or quotas		Participation percentage		Valuation date	Cost		Book value		Equity Method effect
Controlled
Hocol Petroleum Limited		12,000		100.00	December		1,020,378		2,666,842		1,646,464
CENIT Transporte y Logística de Hidrocarburos S.A.S.		45,583,982		100.00	December		2,279,159		2,277,210		(1,949	)
Ecopetrol Pipeline International Limited		40,439,547		100.00	December		870,169		1,935,506		1,065,337
Andean Chemicals Limited		645,707,273		100.00	December		2,114,835		1,779,392		(335,443	)
Sociedad Refinería de Cartagena S.A.		980,000		49.00	December		239,273		1,180,151		940,878
Ecopetrol Global Energy S.L.U.		70,151,927		100.00	December		2,653,352		1,152,787		(1,500,565	)
Equion Energía Limited		114,836,072		51.00	December		436,053		1,062,339		626,286
Polipropileno del Caribe S.A.		206,910,325		49.90	December		259,699		359,170		99,471
Ecopetrol Capital AG		1,151,000		100.00	December		227,487		266,806		39,319
Black Gold Re Limited		120,000		100.00	December		184,079		254,583		70,504
Ecopetrol Global Capital		3,100		100.00	December		8		7		(1	)
Total							10,284,492		12,934,793		2,650,301

20 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Significant influence investments recognized under the equity method as at June 30, 2013 are as follows:

Equity share	Number of shares and/or quotas		Participation percentage		Valuation date	Cost		Book Value		Equity Method effect
Significant influence
Ecodiesel Colombia S.A.		10,500,000,000		50.00	May		10,500		21,129		10,629
Offshore International Group		250		50.00	April		408,517		587,194		178,677
Invercolsa S.A.		1,213,801,146		43.35	May		61,671		258,409		196,738
Total							480,688		866,732		386,044

Significant influence investments recognized under the equity method as of December 31, 2012 are as follows:

Equity share	Number of shares and/or quotas		Participation percentage		Valuation date	Cost		Book Value		Equity Method effect
Significant influence
Offshore International Group		250		50.00	December		408,517		532,268		123,751
Invercolsa S.A.		1,213,801,146		43.35	October		61,671		240,555		178,884
Ecodiesel Colombia S.A.		10,500,000,000		50.00	December		10,500		19,408		8,908
Total							480,688		792,231		311,543

Investments recognized under the cost method as at June 30, 2013 are as follows:

Equity share	Number of shares and/or quotas		Participation percentage		Valuation date	Cost		Market / Intrinsec value		Appreciation / Depreciation
Non-strategic
Empresa de Energía de Bogotá		631,098,000		6,87	June		154,376		864,605		710,229
Interconexión Eléctrica S.A.		58,925,480		5,32	June		69,549		446,066		376,517
Concentra Inteligencia en   Energía S.A.S.		84,000		4,76	May		84		71		(13	)
Total non-strategic							224,009		1,310,742		1,086,733

Investments recognized under the cost method as at December 31, 2012 are as follows:

Equity share	Number of shares and/or quotas		Participation percentage		Valuation  date	Cost		Market / Intrinsec value		Appreciation / Depreciation
Non-strategic
Empresa de Energía de Bogotá		631,098,000		6.87	December		154,376		801,495		647,119
Interconexión Eléctrica S.A.		58,925,480		5.32	December		69,549		565,683		496,134
Concentra Inteligencia en Energia S.A.S.		84,000		4.76	November		84		75		(9	)
Total non-strategic							224,009		1,367,253		1,143,244

21 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

With regards to the investments held by Ecopetrol in Bioenergy S.A., Bioenergy Zona Franca S.A.S., Compounding and Masterbatching Industry Ltda., Serviport S.A., Colombia Pipelines Limited., Ecopetrol América Inc., Ecopetrol del Perú S.A., Ecopetrol Oleo e Gas do Brasil Ltda., Hocol S.A., ODL Finance S.A., Oleoducto Bicentenario de Colombia S.A.S., Oleoducto Central S.A. and Oleoducto de Colombia S.A., Oleoducto de los Llanos Orientales S.A., and Santiago Oil Company, the equity method is not applied since Ecopetrol does not have a direct participation in these companies. The participation is held through other subsidiaries, which are the ones that account for these companies using the equity method.

Restrictions on long-term investments - Variable income:

As of January 10, 2013, regarding the legal proceedings of Invercolsa S.A.: the cessation appeal filed by AFIB S.A. and FERNANDO LONDOÑO HOYOS against the judgment passed by the 28th Civil Court of the Circuit on February 8, 2007, that was confirmed by the Superior Court of the District of Bogota – Civil Court, on January 11, 2011 is currently in process; accordingly, on October 22, 2012 the term for the cessation appellant AFIB S.A. to support the corresponding appealed expired, which was done in time and the term for the appellant in cassation Fernando Londoño Hoyos to support his started to run, which was also done in time; therefore, on December 5, 2012, the Court Clerk’s Office indicated that having notified the appellants, the corresponding actions were filed in due time and are included in the case file, a report that was delivered to the court that same day. The notification of the complaint to the Company is pending. The appeal sentence of January 11, 2011 ordered: i) that the purchase of 145 million shares of Invercolsa by Fernando Londoño Hoyos are to be cancelled; ii) that the cancellation of said transaction is to be recorded in the shareholders’ book, including the pledge in favour of the Pacífico Colombia y Panamá banks; as well as the payment in kind with the shares of Arrendadora Financiera Internacional Bolivariana S.A.; iii) that Fernando Londoño Hoyos and AFIB are forced to return to Ecopetrol the Invercolsa dividends, along with the new shares received as profit and/or revaluations; iv) to declare that Fernando Londoño Hoyos did not acquire or possess in good faith the 145 million Invercolsa shares; and v) that Invercolsa is to adjust its operation and the Shareholders’ Meeting to the declarations made in the sentence.

The economic activity of the entities in which Ecopetrol has investments accounted for under the equity method, are as follows:

Company	Economic Activity
Hocol Petroleum Limited	Investment vehicle owner of Hocol S.A. hydrocarbons exploration and production company.
Cenit Transporte y Logística de Hidrocarburos S.A.S.	Transportation and/or storage of hydrocarbons, hydrocarbon by-products, products and similar, through its own or third party transportation and/or storage systems in Colombia or abroad.
Ecopetrol Pipelines International Limited (d)	Investment vehicle.
Andean Chemicals Limited	Investment vehicle.
Sociedad Refinería de Cartagena S.A.	Refining, commercialization and distribution of hydrocarbons.

22 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Company	Economic Activity
Ecopetrol Global Energy S.L.U.	Investment vehicle in Spain.
Equión Energía Limited	Exploration and production of hydrocarbons.
Polipropileno del Caribe S.A.	Production and commercialization of polypropylene resin.
Ecopetrol Capital AG	Financing, Liquidation of Financing of group corporations or any type of company and every activity related to it.
Black Gold Re Ltd.	Reinsurer of Ecopetrol and its subsidiaries.
Ecopetrol Global Capital	Investment vehicle.
Oleoducto Central S.A. – Ocensa	Transportation of crude oil by pipelines.
Invercolsa S.A.	Investments in companies in the energy sector including activities proper of the industry and commercialization of hydrocarbons and mining.
Oleoducto de Colombia S.A.	Transportation of crude oil by pipelines.
Serviport S.A.	Services for support of loading and unloading of oil vessels, supply of equipment for same purpose, technical inspection and cargo measurements.
Ecodiesel Colombia S.A.	Production, commercialization and distribution of biofuels and oleochemicals.
Ecopetrol Oleo é Gas do Brasil Ltda.	Exploration and exploitation of hydrocarbons.
Ecopetrol América Inc.	Exploration and exploitation of hydrocarbons.
Ecopetrol del Perú S.A.	Exploration and exploitation of hydrocarbons.
ODL- Finance	Transportation of crude oil by pipelines.
Offshore International Group	Exploration, development, production and processing of hydrocarbons.
Oleoducto Bicentenario de Colombia S.A.S.	Build and operate an oil pipeline to ensure the export of oil production surpluses from the Eastern Plains region.

23 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Affiliates (entities in which the Company owns over 50% interest), as at June 30, 2013 show the following balances:

Company	Assets		Liabilities		Equity		Results of Period
Ecopetrol Capital AG		1,279,832		972,213		307,619		15,659
Sociedad Refinería de Cartagena S.A.		12,254,544		9,092,958		3,161,586		(164,026	)
CENIT Transporte y Logística de Hidrocarburos S.A.S.		16,846,588		2,331,356		14,515,232		415,428
Ecopetrol Pipelines International Limited		3,386,344		-		3,386,344		182,642
Equion Energía Limited		3,322,003		933,123		2,388,880		243,717
Ecopetrol Global Capital		8		-		8		-
Hocol Petroleum Limited		2,889,327		-		2,889,327		134,294
Andean Chemical Limited		1,693,023		24,129		1,668,894		(90,299	)
Ecopetrol Global Energy S.L.U.		1,914,339		24		1,914,315		(271,696	)
Black Gold Re Limited		454,875		170,097		284,778		6,651

Affiliates (entities in which the Company owns over 50% interest), as at December 31, 2012 show the following balances:

Company	Assets		Liabilities		Equity		Results of period
Hocol Petroleum Limited		2,666,845		3		2,666,842		465,305
Cenit Transporte y Logistica de Hidrocarburos S.A.S.		2,275,046		1,058		2,273,988		(1,949	)
Equion Energía Limited		3,030,858		947,841		2,083,017		719,692
Ecopetrol Pipelines International Limited		1,935,551		45		1,935,506		6,728
Andean Chemicals Limited		1,801,191		21,799		1,779,392		(79,944	)
Ecopetrol Global Energy S.L.U.		1,152,812		25		1,152,787		(372,176	)
Ecopetrol Capital AG		1,345,518		1,078,712		266,806		41,823
Black Gold Re Limited		299,579		44,996		254,583		25,575
Ecopetrol Global Capital		7		-		7		-

Maturity of fixed - yield investments - Non current

The summary of the maturity of noncurrent fixed - yield investments as at June 30, 2013 is shown below:

Maturity	>1 - 3 Years		3 - 5 Years		> 5 Years		Total
Bonds & other foreign securities		148,959		13,873		-		162,832
Bonds & other government securities		489,237		91,697		-		580,934
Treasury Bond TES		-		-		1,070		1,070
Specific destination fund		252,636		44,881		108,244		405,761
		890,832		150,451		109,314		1,150,597

24 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

The summary of the maturity of noncurrent fixed - yield investments as at December 31, 2012 is shown below:

Maturity	>1 - 3 Years		3 - 5 Years		> 5 Years		Total
Bonds & other foreign securities		1,845,673		226,284		-		2,071,957
Bonds & other government securities		618,488		304,048		75,569		998,105
Treasury Bond TES		772,747		148,949		314,470		1,236,166
Specific destination fund		58,328		63,339		272,249		393,916
		3,295,236		742,620		662,288		4,700,144

(5) Accounts and Notes Receivable

The balance of accounts and notes receivable is as follows:

	As at June 30, 2013			As at December 31, 2012
Current portion:
Customers:
National		600,849			709,601
Foreign		2,330,764			1,781,791
Related parties (see note 15)		2,791,204			853,642
Price differential to be received from the Ministry of Mines and Energy (1)		316,741			1,089,240
Miscellaneous debtors		141,554			22,430
Reimbursements and yields on investment		33,208			52
Association contracts - joint ventures		-			13,002
Accounts receivable from employees		49,594			34,481
Industrial service clients		180,719			8,517
Total current portion		6,444,633			4,512,756
Non-current portion
Loans to related parties (2) (see note 15)		1,109,626			1,109,626
Cavipetrol - loans to employees (3)		350,650			339,465
Price differential to be received from the Ministry of Mines and Energy (1)		77,510			77,510
Credit accounts receivable		10,366			8,520
Doubtful accounts		225,116			197,484
Other		24,362			26,976
Total		1,797,630			1,759,581
Less - Allowance for doubtful accounts		(225,116	)		(197,484	)
Total non-current portion		1,572,514			1,562,097

25 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

The following shows the movement in the allowance for doubtful accounts:

	As at June 30, 2013			As at December 31, 2012
Opening balance:		197,484			130,734
Additions		26,656			69,337
Recovery of allowances		(1,974	)		(225	)
Uses of allowances		2,950			(2,362	)
Closing balance		225,116			197,484

(1) Account receivable from the Ministry of Finance and Public Credit, arising from the calculation of the regular motor gasoline and diesel price differential pursuant to Resolution 180522 issued on March 29, 2010.

(2) In November 2010, a subordinated borrowing contract No. CE2010-01 was subscribed between Ecopetrol S.A. and Refinería de Cartagena S.A. for maximum financing of US$1,000 million, of which up to May 2011 Ecopetrol had disbursed the sum of $1,109,626, equivalent to approximately to US$588 million. The representative market rate (RMR) in effect on the date of Resolution No. 3587 of 2010, issued by the Ministry of Finance and Public Credit, is used to determine the debt amounts arising from the above contract.

On August 18, 2011 an addendum to this contract was executed whereby the maximum amount to be disbursed was changed to US$600 million calculated at the market’s representative exchange rate on the date of the mentioned resolution.

Once all obligations in respect to the Senior Debt have been extinguished, the amortization of principal will be over three (3) years commencing as of the date of its total payment. Notwithstanding the above, the maximum term is twenty (20) years. Amortization of principal will be made in six (6) consecutive, equal, bi-annual payments.

Interest will be accrued at a rate equal to FTD (quarterly in advance) in effect as of December 31st of the year immediately preceding the initiation of each of the installment payment periods. Interest will be converted in their equivalent bi-annual period in arrears.

(3) By means of contracts Leg 058-80 of 1980 and 4008928 of 2006, the administration, management and control of loans granted to employees by the Company were transferred to Cavipetrol. In its capacity as administrator, Cavipetrol monitors, in its database and financial system, the details per employee of the said loans and their respective conditions.

Future collection of accounts receivable from Cavipetrol as at June 30, 2013 are estimated as follows:

Year	Value
2014	$	43,511
2015		43,186
2016 and beyond		263,953
	$	350,650

There are no major restrictions for the recovery of accounts and notes receivable.

26 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(6) Inventories, Net

The balance of inventories, net is as follows:

	As at June 30, 2013			As at December 31, 2012
Finished products:
Crude oil		915,371			905,778
Fuels		672,823			586,844
Petrochemicals		18,437			29,414
Purchased products:
Fuels		16,204			13,607
Crude oil		242,122			256,324
Petrochemicals		8,640			4,749
Raw materials:
Crude oil		105,181			87,246
Products in process:
Fuels		318,193			493,542
Petrochemicals		3,369			2,610
Materials for the production of goods		6,948			11,588
Materials in transit		25,287			4,284
Total		2,332,575			2,395,986
Less - Allowance for inventories		(5,968	)		(2,586	)
Total		2,326,607			2,393,400

The adjustment to the allowance for inventories is as follows:

	As at June 30, 2013		As at December 31, 2012
Opening balance		2,586		9,054
Increase (decrease) of allowance		3,382		-
Recoveries		-		(6,468	)
Closing balance		5,968		2,586

(7) Advances and Deposits

The balance of advances and deposits is as follows:

	As at June 30, 2013		As at December 31, 2012
Current:
Official entities (1)		4,840,982		3,999,006
Partners in joint ventures (2)		661,707		220,748
Customs agents		-		1,511
Related parties (see note 15)		77,371		63,751
Agreements (3)		15,674		18,613
Advances to suppliers		4,968		2,702
Short-term total		5,600,702		4,306,331
Non - current:
Advances and deposits		175,429		163,532
Total		5,776,131		4,469,863

27 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(1) Corresponds to transactions with the National Tax and Customs Direction - DIAN (from the SpanishDirección de Impuestos y Aduanas Nacionales) on the concept of advances on income tax for taxable year 2012 amounting to $4,135,586, self-withholdings and others amounting to $705,396 (2012 - $934,581).

(2) Detail of advances and deposits with partners in joint operations is as follows:

	As at June 30, 2013		As at December 31, 2012
Contracts in which Ecopetrol is not the operator:
Meta Petroleum Ltd.		210,376		9,069
Occidental de Colombia Inc.		112,572		17,733
Emerald Energy PLC Suc Colombia		20,402		20,893
Mansarovar Energy Colombia Ltd.		872		-
Petrobras Colombia Limited		2,497		11,213
Other operations		48,633		11,484
Perenco Colombia Limited		46,296		2,372
Chevron Petroleum Company		17,689		7,065
Petrobras Internacional Braspetro B.V.		767		-
CEPSA Colombia S.A.		3,015		13,118
Contracts for which Ecopetrol is the operator:
Oleoducto Caño Limón		16,364		15,985
Other operations		6,856		2,400
Bloque CPO-9		31,398		25,189
Acuerdo Master TLU-1		14,164		11,514
Acuerdo operación TLU-3		15,138		13,477
Crudos Pesados Bloque CPE-2		17,522		15,655
La Cira		93,468		38,027
JOA Caño Sur		3,678		3,619
CRC 2004 – 01		-		1,935
Total		661,707		220,748

(3) Represents advance payments to workers on the concept of education plan.

(8) Prepaid Expenses

The balance of prepaid expenses is as follows:

	As at June 30, 2013		As at December 31, 2012
Insurance (1)		47,169		70,326
Other (2)		33,507		164
Total		80,676		70,490

(1) Insurance contracts are in effect until May 31, 2014 at a cost of $169.249 and amortization of $122.080 as at June 30, 2013.

(2) Resources relating to the acquisition and maintenance of vehicles assigned to senior officials of Ecopetrol through leasing, managed by Cavipetrol, under Contract No. 5203585.

28 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(9) Deposits held in Trust

The balance of deposits held in trust is as follows:

	As at June 30, 2013		As at December 31, 2012
Abandonment fund		312,898		306,651
Pension fund		-		16,920
Other		86		94
Total		312,984		323,665

These balances correspond to trust funds for pensions and abandonment costs. They were created under Occidental de Colombia and received upon termination of the Asociación Cravo Norte - ACN contract, which came into effect in February 2011. The pension fund and the abandonment fund are administered by Fiduciaria Bancolombia.

(10) Property, Plant and Equipment, Net

The balance of property, plant and equipment, net is as follows:

	As at June 30, 2013			As at December 31, 2012
Plant and equipment		12,669,319			15,086,251
Construction in progress (1)		6,880,408			7,397,138
Pipelines, networks and lines		5,815,847			9,583,770
Buildings		3,336,155			3,979,249
Equipment on deposit and in transit		1,169,026			1,391,884
Computer equipment		334,286			352,223
Transportation equipment and other assets		419,433			411,919
Land		436,524			513,093
Total		31,060,998			38,715,527
Accumulated depreciation		(12,583,744	)		(15,394,694	)
Allowance for property, plant and equipment depreciation (2)		(347,842	)		(385,356	)
Total		18,129,412			22,935,477

The total depreciation taken to income at June 30, 2013 amounted to $650.829 (2012 - $624.743).

(1) Mainly includes: (i) Investments in direct-operation production projects, such as: development at Castilla, Chichimene, Apiay; secondary recovery at Yariguí and Cupiagua; operations linked to development projects at Piedemonte, Rubiales, Abarco, Quifa, Caracara, and expansion of the LTO gas plant. For refining, the major projects are: the modernization of the Barrancabermeja Refinery, and the Master Plan for Industrial Services and Consolidated Operating Control. In transportation, the Master Plan for Refinery Integration; (ii) interests accrued on the syndicated loan for $71,269 in bonds issued in dollars and pesos amounting to $109,468 and $29,229, respectively; $23,812 of such amount went to investment projects.

29 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(2) The following details the movement in the allowance for properties, plant and equipment depreciation:

	As at June 30, 2013			As at December 31, 2012
Opening balance		385,356			879,062
Additions to new allowances		1,182			310,071
Use of allowances		(1	)		(1,785	)
Depreciation of assets prior to 2006		(1,141	)		(680,128	)
Recovery		(37,554	)		(121,864	)
Closing balance		347,842			385,356

Summary of properties, plant and equipment as at June 30, 2013, including appreciation:

Type of asset	Adjusted Cost		Accumulated Depreciation			Appreciation		Allowance			Net Plus Appreciation
Plant and equipment		12,669,319		(8,387,369	)		3,805,077		(28,414	)		8,058,613
Pipelines, networks and lines		5,815,847		(2,382,532	)		1,308,374		(54,038	)		4,687,650
Works in progress		6,880,408		-			-		-			6,880,408
Buildings		3,336,155		(1,333,777	)		1,731,499		(197,572	)		3,536,305
Equipment on deposit and in transit		1,169,026		-			-		-			1,169,026
Computer equipment		334,286		(232,654	)		21,906		(4,307	)		119,231
Transportation equipment and other assets		419,433		(247,412	)		65,421		(53,567	)		183,876
Land		436,524		-			2,250,321		(9,944	)		2,676,901
Total		31,060,998		(12,583,744	)		9,182,598		(347,842	)		27,312,010

Summary of properties, plant and equipment as at December 31, 2012, including appreciation:

Type of asset	Adjusted Cost		Accumulated Depreciation			Appreciation		Allowance			Net Plus Appreciation
Plant and equipment		15,086,251		(9,800,229	)		4,997,112		(64,900	)		10,218,234
Pipelines, networks and lines		9,583,770		(3,678,944	)		5,374,552		(50,533	)		11,228,845
Works in progress		7,397,138		-			-		-			7,397,138
Buildings		3,979,249		(1,447,411	)		2,216,476		(199,720	)		4,548,594
Equipment on deposit and in transit		1,391,884		-			-		-			1,391,884
Computer equipment		352,223		(234,126	)		33,070		(4,462	)		146,705
Transportation equipment and other assets		411,919		(233,984	)		107,321		(55,797	)		229,459
Land		513,093		-			2,805,889		(9,944	)		3,309,038
Total		38,715,527		(15,394,694	)		15,534,420		(385,356	)		38,469,897

There are no restrictions or pledges on assets, nor have they been offered as security. Retirements and sales of property, plant and equipment as at June 30, 2013 generate losses for $702 (net loss $127 in 2012).

Technical appraisals of fixed assets take place every three years in accordance with the stipulations of the of Regime Public Accounting. At the close of 2012, the last technical appraisal of assets was updated by the T.F. Auditores & Asesores firm.

30 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(11) Natural and Environmental Resources, Net

The balance of natural and environmental resources, net is as follows:

	As at June 30, 2013			As at December 31, 2012
Amortizable oil investments (1)		27,597,671			26,295,849
Less: Accumulated amortization of oil investments		(15,234,406	)		(13,745,560	)
		12,363,265			12,550,289
Plugging and abandonment, facility dismantling and environmental recovery costs (2)		3,932,528			3,999,267
Less: Accumulated amortization for facility abandonment		(2,177,748	)		(2,030,643	)
		1,754,780			1,968,624
Reservoirs and appraisals (3)		701,608			701,590
Less: Accumulated depletion		(637,942	)		(632,941	)
		63,666			68,649
Exploration in progress (4)		1,306,654			1,107,245
Total		15,488,365			15,694,807

Amortization expense charged to results for natural resources and abandonment of facilities at June 30, 2013 amounted to $1,550,506 and $182,232, respectively (2012 - $1,316,633 and $192,828).

(1) As at June 30, 2013, net capitalizations of oil investments approximately amounted to $1,326,789 (2012 - $3,821,276), mainly in the following fields: Rubiales, Castilla, Chichimene, Casabe, Apiay, Quifa, Cupiagua and Caño Limón.

(2) Corresponds to abandonment costs of production areas, updated in December 2012.

(3) The appraisal of reserves is represented by the reservoirs received through the reverting of concession contracts amounting to $490,525, $184,225 and $26,858, administered by Gerencia Magdalena Medio, Gerencia Sur and Gerencia Catatumbo Orinoquía, respectively.

(4) The increase in 2013 is due to an increase in the execution of non-conventional hydrocarbons, Caño Sur, Oripaya, CPO 9 and 11, CPE 8 and Pastinaca.

(12) Deferred Charges

The balance of deferred charges is as follows:

	As at June 30, 2013		As at December 31, 2012
Deferred income tax		1,563,630		1,507,035
Equity tax and surtax		476,494		952,987
Other deferred charges, net (1)		910,312		866,999
Total		2,950,436		3,327,021

(1) Includes investments made in developing the business cooperation contract signed between Ecopetrol and Schlumberger aimed at increasing production at the Casabe field. These investments are amortized based on technical units of field production.

31 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(13) Other Assets

Detail of other assets is as follows:

	As at June 30, 2013		As at December 31, 2012
Goodwill (1)		2,722,953		2,841,618
Intangible assets, net (brands, licenses, patents and software)		223,714		202,899
Goods acquired through financial leasing		98,887		105,205
Other assets (4)		92,353		94,231
Trust funds (2)		67,150		71,025
National Royalties Fund (from the SpanishFondo Nacional de Regalías) (3)		73,294		67,815
Deposits given in trust		9,106		19,645
		3,287,457		3,402,438

(1) As at June 30, 2013, goodwill was comprised by:

Company	Acquisition Date	Goodwill Amount		Amortized Amount		Pending Amortization		Amortization Period (Years)
Propilco S.A.	07/04/2008		327,986		95,858		232,128	17,8
Andean Chemicals	07/04/2008		357,629		104,524		253,105	17,8
IPL Enterprises	17/03/2009		537,093		155,161		381,932	15
Offshore International	06/02/2009		746,670		192,972		553,698	14
Hocol Petroleum Limited	27/05/2009		748,947		181,156		567,791	16
Equión Energía Limited	24/01/2011		972,409		238,110		734,299	10
Total			3,690,734		967,781		2,722,953

As at December 31, 2012, goodwill was comprised by:

Company	Acquisition Date	Goodwill Amount		Amortized Amount		Pending Amortization		Amortization Period (Years)
Propilco S.A.	07/04/2008		327,986		86,572		241,414	17,8
Andean Chemicals	07/04/2008		357,629		94,400		263,229	17,8
IPL Enterprises	17/03/2009		537,093		137,257		399,836	15
Offshore International	06/02/2009		748,986		186,175		562,811	14
Hocol Petroleum Limited	27/05/2009		748,948		157,334		591,614	16
Equión Energía Limited	24/01/2011		972,409		189,695		782,714	10
Total			3,693,051		851,433		2,841,618

32 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(2) Corresponds to: i) $56,485 for contributions and shares in the National Hydrocarbons Fund (from the Spanish Fondo Nacional de Hidrocarburos) created to support future hydrocarbon investment, exploration and production contracts in smaller fields for projects administered by the Colombia Hydrocarbons Private Capital Fund(from the Spanish Fondo de Capital Privado de Hidrocarburos de Colombia); ii) $1,249 for the Procuraduría Fund, created to fund projects for the general benefit of municipalities near the direct operations at the Cicuco field: Cicuco, Mompox and Talaigua Nueva (the purpose of the trust is to withdraw funds in accordance with the progress of projects to be implemented by the municipalities through contracts with Incoder and the Ministry of the Environment); and iii) $9,416 from the Colpet, Cóndor and Sagoc Fund to deal with potential contingencies in the liquidation of these former subsidiaries.

(3) Corresponds to deposits of the Oil Savings and Stabilization Fund - FAEP (from the SpanishFondo de Ahorro y Estabilización Petrolera) in Ecopetrol’s favor to address the remainder of the National Royalties Fund. Its sole purpose is to pay debts and finance development programs and projects in hydrocarbon producing and non-producing municipalities and departments. Ecopetrol makes disbursements as the Ministry of Finance issues the respective approvals.

(4) Mainly includes: i) Restricted funds amounting to $51,834 ($50,359 in 2012), represented by judicial deposits to pay for labor, civil and tax litigations; and ii) third party property improvements on assets received through concessions for the Colorados and Tumaco wells amounting to $39,526 ($42,897 in 2012).

(14) Financial Obligations

The balance of financial obligations is as follows:

	As at June 30, 2013		As at December 31, 2012
Current:
Interest payable		111,991		120,349
BOMT contracts - Infrastructure (2)		5,186		9,478
Financial leasing contract - Real estate (3)		887		844
National bank loans (1)		-		444,041
Total current		118,064		574,712
Non - current:
Foreign loans - Bonds (4)		2,893,500		2,652,345
National bank loans (1)		1,839,000		1,155,650
Public credit operations - Issued bonds and securities (5)		1,000,000		1,000,000
BOMT contracts - Infrastructure (2)		98,756		90,525
Capital lease contracts - Real estate (3)		1,931		2,387
Total non - current		5,833,187		4,900,907

(1) As at December 31, 2012, corresponds to the syndicated loan with eleven national banks for an initial value of $2,220,200, intended to finance the Company’s investment programs. The loan was obtained with the following conditions:

Term:	7 years, including a 2-year grace period
Payment of interest:	Starting in November 2009
Rate:	FTD + 4% (anticipated quarterly rate)
Amortization:	Every six months

33 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Guarantee: Ecopetrol granted a closed pledge over the shock share owened either directly or indirectly on the following companies, thus reaching a 120% coverage of the loan amount. The shares given as guarantee were replaced by another contract between some banks and Ecopetrol on November 17, 2011. The value of the guarantee, according to the intrinsic value of the shares of companies as at December 2012 and translated into Colombian pesos with the TRM in effect at June 30, 2013, is as follows:

Company	Value
Hocol Petroleum Limited		2,909,073
Offshore International Group		489,533
Polipropileno del Caribe S.A.		313,010
Total		3,711,616

The loan was paid off on May 27, 2013 through a debt management and financing operation in local currency with seven Colombian banks for a value of $1,839,000, which is made up by the following operations:

i. Debt Management Operation: Signed with 7 local banks for a total value of $1,554,140, whereby the balances outstanding of the 2009 syndicated credit were replaced.

ii. New Resources Operation: Signed with 6 local banks for a total value of $284,860, whereby the investment and general corporate purposes plan is financed.

The new loan was obtained with the following conditions:

Disbursement date:	May 27, 2013
Term:	12 years with a 3-year grace period
Payment of interest:	As of November 2013
Rate:	DTF + 2.5% (quarterly in advance rate)
Amortization:	Every six months

Guarantee: As at June 30, 2013, Ecopetrol is cancelling the guarantees on which it granted a closed pledge for the 2009 syndicated credit. The new credit agreement does not require any guarantee.

Detail of the amortization payments of long-term principal is as follows:

2016	204,333
2017	204,333
2018	204,334
2019	204,333
2021	204,333
2022	204,334
2023	204,333
2024	204,333
2025	204,334
	1,839,000

34 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(2) They correspond to the contract signed on September 19, 2008 between Ecopetrol and Unión Temporal Gas Gibraltar (Montecz S.A., Conequipos ING Ltda., Gasmocan S.A. and Twister BV), whose purpose is focused on financing, design, equipment purchase, supplies, construction, tests, operation and maintenance for a 15-year period of the surface facilities for the treatment of gas from the Gibraltar field owned by Ecopetrol S.A. amounting to USD37 million.

(3) Corresponds to a financial lease or lease-purchase agreement for real estate under the following conditions as at June 30, 2013:

Type of goods:	4thand 5th floors of the COLGAS building, located at Calle 37 N° 8 - 43, Bogotá
Contract duration:	60 months
Number of pending installments:	5
Value of pending installments:	$2,686(*)
Purchase option amount:	$476
Amortization:	Monthly

(*) The amount of pending six-monthly installments is estimated by using an FTD (Fixed Term Deposit) rate of 4.11% effective during the week from April 29 to May 5, 2013, last date on which, according to the leasing agreement, the rent value was adjusted.

(4) On July 23, 2009, the Company issued unsecured and unsubordinated debt bonds (notes) with the right to register them at the SEC, maturing in 2019, amounting to USD1,500 million. Such registration took place on October 6, 2009. The notes were issued under Rule 144A/Regulation S with SEC registration rights.

The terms of the transaction were:

Coupon interest: 7.625%

Insurance premium on the United States Treasury (Make Whole): 50 basis points over US Treasury securities

Interest payment dates are July 23 and January 23 of every year, starting on January 23, 2010
Maturity date: July 23, 2019

The Company must comply with the various standard covenants, including the due and timely payment of interest and capital; no creation of collateral pledges by Ecopetrol and its subordinate companies, except for authorized pledges; and the offer to purchase the bonds in the event of repurchasing for control change, in accordance with the definition thereof in the issuance documents.

(5) Through Resolution No. 3150 of October 20, 2010, Ecopetrol was authorized by the Ministry of Finance and Public Credit to issue, subscribe and place internal public debt bonds for an amount of up to one billion Colombian pesos to finance Ecopetrol 2010 investment plan. Subsequently, through Resolution No. 2176 of November 11, 2010, the Company obtained the authorization of the Finance Superintendency of Colombia to register its internal public debt bonds at the National Register of Securities and Issuing Agencies, and to place them through public offering.

35 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

The terms of the issuance and placement of the internal public debt bonds are as follows:

Amount placed:	1 billion Colombian pesos
Issuance date:	December 1, 2010
Amortization:	At maturity
Series A:	Bonds denominated in pesos at a variable rate based on the CPI
Redemption term:	5 years		7 years		10 years		30 years
Rate:	CPI + 2.80%			CPI + 3.30%		CPI + 3.94%		CPI + 4.90%
Amount (millions)	$	97,100		138,700		479,900		284,300

At present, Ecopetrol S.A. does not anticipate any situation that might represent non-compliance with its obligations in the immediate future.

(15) Accounts Payable and Related Parties

The balance of accounts payable and transactions with related parties is as follows:

	As at June 30, 2013		As at December 31, 2012
Dividends payable (1)		9,011,715		3,919,102
Suppliers		3,823,803		3,856,184
Related parties (2)		166,849		757,081
National Hydrocarbons Agency - ANH (from the SpanishAgencia Nacional Hidrocarburos)		522,480		245,394
Partner advances		1,006,931		795,990
Deposits received from third parties		431,981		415,541
Miscellaneous creditors		463,902		291,320
Tax withholdings		124,860		208,425
Reimbursement of exploratory costs		34,232		33,944
Total		15,586,753		10,522,981

(1) Represented by the dividends payable as decreed at the Shareholders’ General Meeting held on March 21, 2013, amounting to $9,008,188, including dividends payable to shareholders who are in arrears in the payment of quotas generated by the purchase of shares, and to whom economic and political rights have been suspended pursuant to Article 397 of the Code of Commerce. Such rights will be reinstated once the payments are up to date.

36 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(2) Balances and transactions with related parties.

The most representative balances with related parties as at June 30, 2013 and December 31, 2012, in which Ecopetrol holds investments or direct interest, are included in debtors, suppliers and accounts payable as follows:

	Accounts Receivable		Advances Receivable		Accounts Payable
Current:
Refinería de Cartagena S.A.		768,281		-		11
Compounding and Masterbatching (COMAI)		6,114		-		-
Oleoducto de los Llanos Orientales - ODL		1,178		-		4,524
Hocol S.A.		2,031		17,613		7,329
Equion Energía Limited		5,072		44,091		2,481
Ocensa S.A.		3,377		-		135,551
Oleoducto de Colombia S.A.		1,128		15,667		12,824
Polipropilenos del Caribe S.A.		10,503
Oleoducto Bicentenario de Colombia		3,897		-		-
Cenit S.A.		1,989,619		-		1,072
Ecopetrol America Inc.		4		-		3,057
Total current:		2,791,204		77,371		166,849
Non - current:
Refinería de Cartagena S.A. (long term)		1,109,626		-		-
Total non - current:		1,109,626		-		-
Balance as at June 30, 2013		3,900,830		77,371		166,849

	Accounts Receivable		Advances Receivable		Accounts Payable
Current:
Refinería de Cartagena S.A.		745,524		-		77,835
Compounding and Masterbatching (COMAI)		8,690		-		-
Oleoducto de los Llanos Orientales - ODL		2,659		-		817
Hocol S.A.		19,835		16,901		27,637
Equion Energía Limited		49,989		33,448		5,220
Ocensa S.A.		5,279		-		605,474
Oleoducto de Colombia S.A.		16,381		13,402		20,264
Ecopetrol del Perú S.A.		137		-		-
Oleoducto Bicentenario de Colombia		4,842		-		-
Cenit S.A.		51		-		-
Ecopetrol America Inc.		42		-		19,834
Black Gold Re Ltd.(*)		1		-		-
Ecopetrol Oleo e Gas Do Brasil Ltda.		212		-		-
Total current:		853,642		63,751		757,081
Non - current:
Refinería de Cartagena S.A. (long term)		1,109,626		-		-
Total non - current:		1,109,626		-		-
Balance as at December 2012		1,963,268		63,751		757,081

37 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(*) Represents funds received in trust.

The main transactions with related parties during the six-month period ended June 30, 2013 and 2012 are as follows:

	Sales & Services		Rent		Other
Revenue:
Refinería de Cartagena S.A.		2,600,305		-		32,305
Compounding and Masterbatching (COMAI)		64,249		-		602
Hocol S.A.		5,907		-		-
Oleoducto de los Llanos Orientales S.A.		11,729		-		1
Ocensa S.A.		12,682		227		56
Homcol Cayman Inc		102		-		-
Black Gold Re Limited		83		-		24
Oleoducto de Colombia S.A.		4,614		-		-
Equión Energía Limited		6,910		-		5
Santiago Oil Company		218		-		184
Bioenergy S.A.		168		-		-
Oleoducto Bicentenario de Colombia S.A.		9,169		-		4
Cenit Logística y transporte		303,665		-		-
Ecopetrol del Perú		8		-		-
Total for the six-month period ended June 30, 2013		3,019,809		227		33,181

	Sales & Services		Rent		Other
Revenue:
Refinería de Cartagena S.A.		2,680,527		-		27,294
Compounding and Masterbatching (COMAI)		73,472		-		-
Hocol S.A.		7,721		-		1,228
Oleoducto de los Llanos Orientales S.A.		14,913		-		-
Ocensa S.A.		13,694		268		-
Oleoducto de Colombia S.A.		2,700		-		-
Equión Energía Limited		10,540		-		626
Bioenergy S.A.		135		-		-
Ecopetrol Capital AG		2,561		-		-
Oleoducto Bicentenario de Colombia S.A.		5,126		-		-
Total for the six-month period ended June 30, 2012		2,811,389		268		29,148

38 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

	Purchase of Products		Transportation Cost		Other
Expenses:
Refinería de Cartagena S.A.		323,534		-		113
Hocol Petroleum Ltd.		80,526		5,114		56
Equion Energía Limited		12,245		1,393		2,127
Ocensa S.A.		-		728,257		-
Oleoducto de los Llanos Orientales S.A.		-		232,138		180
Oleoducto de Colombia S.A.		-		81,397		-
Cénit Logística y Transporte		-		310,636		-
Ecopetrol America Inc.		826		-		773
Total for the six-month period ended June 30, 2013		417,131		1,358,935		3,249
	Purchase of Products		Transportation Cost		Other
Expenses:
Refinería de Cartagena S.A.		285,803		-		316
Hocol Petroleum Ltd.		-		5,159		-
Equion Energía Limited		15,184		1,839		1,832
Ocensa S.A.		-		278,397		-
Oleoducto de los Llanos Orientales S.A.		-		242,900		-
Oleoducto de Colombia S.A.		-		28,247		-
Compounding and Masterbatching (COMAI)		-		-		5,390
Ecopetrol America Inc.		2,496		-		-
Total for the six-month period ended June 30, 2012		303,483		556,542		7,538

There are no special price conditions or exceptions to market values with related parties. Oleoducto de Colombia S.A. and Ocensa S.A. migrated in January and February, respectively, to a Benefit Center business model. For this reason, these companies charge their customers with a rate regulated by the Ministry of Mines and Energy, which allows them not only to recover their operating costs and expenses but also to obtain profits.

No member of the Board of Directors, Legal Representative or Administrator of the Company is the actual beneficiary of 10% or more of Ecopetrol’s outstanding shares.

In 2013, non-material purchase and/or sale transactions of Ecopetrol shares were made by the following administrators of the Company. Such transactions were duly authorized and disclosed to the market on a timely basis.

Official	Operation	Authorization Minutes
Chairman of the Board of Directors	Sale of 20,311 shares	N° 172, March 15, 2013

39 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(16) Taxes, Contributions and Duties Payable

Detail of taxes, contributions and duties payable is as follows:

	As at June  30, 2013			As at December  31, 2012
Current tax:
Income tax		3,529,621			6,560,992
National Tax on Gasoline and gasoline surtax (1)		197,138			-
Global tax (1)		-			135,266
Sales tax payable (2)		(241,275	)		-
Equity tax		238,247			476,494
Industry and Commerce (Municipal) tax and other minor taxes		33,778			4,689
		3,757,509			7,177,441
Non-current tax:
Equity tax		476,494			476,494
Total taxes		4,234,003			7,653,935

(1) As a result of the implementation of Act 1607 of 2012, the global tax was eliminated and the National Tax on Gasoline and Diesel Oil (ACPM) was established.

(2) Corresponds to the balance in favor for VAT prior to filing the tax return corresponding to the third two-month period of 2013.

Income Tax

For taxable year 2013, Act 1607 of December 2012 reduces the income tax rate to 25% and creates the Income Tax for Equality (CREE), which will have a 9% rate for years 2013, 2014 and 2015. As of taxable year 2016, the rate of this tax will be 8%.

Except for some special deductions, as well as for the offset of losses and excesses of presumptive income and the deduction for donations -benefits not applicable to the CREE, this tax basis will be the same taxable basis as that for income tax.

The income tax provision of June 2013 was computed by applying the 35.30% effective tax rate computed for May 2013 to the accounting profit before taxes. This rate includes 25.96% for income tax and 9.34% for the Income Tax for Equality (CREE).

The effect of temporary differences implying the payment of a lower or higher income tax in the current year is accounted for as asset or liability deferred tax, both for the income tax and for the Income Tax for Equality (CREE), as applicable, provided that there is a reasonable expectation that such differences will be reversed for the asset deferred tax, or sufficient taxable income will be generated to recover the tax with regard to the liability deferred tax. The deferred tax is computed at a 34% rate (25% income tax and 9% Income Tax for Equality (CREE)) or a 33% arte (25% income tax and 8% Income Tax for Equality (CREE)), as applicable.

40 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited) 

(1) The expense on the concept of income tax and Income Tax for Equality (CREE) is as follows:

	As at June 2013			As at June 2012
Current income tax		2,573,730			3,772,433
Current income tax - CREE		955,891			-
Income tax of previous periods		(2,727	)		28,312
Asset deferred income tax		351,429			(35,784	)
Asset deferred income tax - CREE		(408,024	)		-
Liability deferred income tax		(285,566	)		161,952
Liability deferred income tax - CREE		493,936			-
Total		3,678,669			3,926,913

The asset deferred tax is computed based on the value of accounting provisions not accepted for tax purposes, which are deductible at the time of their utilization, and at the value of asset inflation adjustments originated between 2004 and 2006. The liability deferred tax results from: a) The difference in the policy for amortizing oil investments, which, for accounting purposes, are amortized by using the technical units of production, but, for tax purposes, are amortized by using the straight-line method; b) the difference in the reappraisal of fixed income investments, which, for accounting purposes, are reappraised by the market value, but, for tax purposes, are reappraised by using the straight-line method; and c) the difference in the amortized value of goodwill accelerated for tax purposes starting in 2011.

Income tax returns can be reviewed by the tax authorities for up to two years following filing. To date, the tax return for 2012 is open for review.

At present, there are differences with the DIAN with regard to the computation and payment of the first income tax installment of 2004. It is the DIAN’s view that the value of the surtax for the said year should have been included in the basis for computation. The result of this process will not affect the Company’s cash flow because the DIAN offset the amounts in question directly from balances in favor previously requested for other reasons.

The balance of asset and liability deferred income tax is as follows:

	As at June  30, 2013			As at December  31, 2012
Asset deferred tax:
Opening balance - Income tax		1,507,035			1,519,196
Movement of the year - Income tax		(351,429	)		(12,161	)
Movement of the year - CREE		408,024			-
Closing balance		1,563,630			1,507,035
Liability deferred tax:
Opening balance - Income tax		1,657,613			1,706,394
Movement of the year - Income tax		(285,566	)		(48,781	)
Movement of the year - CREE		493,936			-
Closing balance		1,865,983			1,657,613

41 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited) 

Transfer Pricing

As of 2004, income taxpayers who had entered into transactions with related parties abroad, and/or with residents of countries considered to be tax havens, are under the obligation of determining, for income tax purposes, their ordinary and extraordinary income, costs and deductions, and assets and liabilities, taking into account the denominated market prices and profit margins for these transactions. Based on the opinion of the Company’s external consultants, no significant changes are expected for taxable year 2013 related to the compliance with the principle of full jurisdiction set out in Article 260-1 of the Colombian Tax Code, and there are no foreseen adjustments to the determination of income tax expenses for the said year. 

Equity Tax

Pursuant to Act 1370 of 2009, the value of the equity tax payable was to be registered just once on January 1, 2011 in order to be paid in eight equal installments during 2011, 2012, 2013 and 2014 as established by the National Government.

Based on the above, and in accordance with accounting management decrees, Ecopetrol recognized the value of the equity tax payable, and the corresponding charge to income, for the proportional value corresponding to 2011, 2012 and 2013. The pending balance payable was registered as a deferred charge amortizable during 2014.

(17) Labor and Pension Liabilities

The balance of labor and pension liabilities is broken down as follows:

	As at June  30, 2013		As at December  31, 2012
Current:
Vacation		82,247		65,773
Premiums, bonuses and allowances		94,516		86,638
Severance payments		26,825		44,669
Salaries and pensions payable		3,538		2,729
Interests on severance payments		1,518		5,007
Other		3,939		2,221
Total current		212,583		207,037
Non - current:
Actuarial liability for health and education (1)		4,189,503		3,992,829
Retirement pensions, joint ventures		67,789		71,052
Total non – current		4,257,292		4,063,881
Total		4,469,875		4,270,918

42 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited) 

(1) Actuarial computations for health and education were prepared by applying the Mortality Tables updated in 2010 and by using a technical interest rate of 4.8%. In order to estimate the value of future fringe benefits for these items, an increase of 4.755% was used (2012 inflation), corresponding to the average inflation rate recorded by the National Administrative Department of Statistics – DANE (from the SpanishDepartamento Administrativo Nacional de Estadística) during the three years prior to the year of computation, plus an additional percentage of 1.5%, taking into consideration the actual growth of the company. In order to estimate the 2013 reserve update, the CPI of the immediately preceding year was used (2.44%) plus the additional percentage (1.5%). As a result of the change in the accounting amortization principle that occurred in 2010, it is estimated that there will be a portion pending amortization corresponding to 6% at the closing of 2013. As at June 2013, such portion is equivalent to $345,921.

The amortized actuarial liability for health liabilities is as follows:

Concept	As at June  30, 2013			As at December  31, 2012
Actuarial computation of health liabilities		4,142,351			4,062,323
Less - Actuarial computation pending amortization		(345,921	)		(454,973	)
Amortized actuarial liability		3,796,430			3,607,350

The difference in the amortized actuarial liability is as follows:

	As at June  30, 2013		As at December  31, 2012		Difference
Health:
Active personnel		422,947		401,883		21,064
Retirees		3,373,483		3,205,467		168,016
Education:
Active personnel		38,480		37,736		744
Retirees		354,593		347,743		6,850
Total:		4,189,503		3,992,829		196,674

(18) Estimated Liabilities and allowances

The balance of estimated liabilities and allowances is as follows:

	As at June 30, 2013			As at December 31, 2012
Current:
Provision for legal proceedings (1) (see note 30)		781,869			770,922
Provision for pension liabilities (2)		500			500
Provision for abandonment, facility dismantling and environmental recovery costs (3)		(28,856	)		1,358
Other provisions - CP		55,678			269,518
Provisions for contingencies (4)		464,564			92,561
Total current		1,273,755			1,134,859
Non - current:
Provision for abandonment, facility dismantling and environmental recovery costs (5)		3,736,102			3,802,841
Provisions for Community Members (6)		451,107			424,500
Total non - current		4,187,209			4,227,341
Total		5,460,964			5,362,200

43 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited) 

(1) The movement in the provision for legal proceedings as at June 30, 2013 is as follows:

	Number of Proceedings			Provision Amounts
December 31, 2012 opening balance		673			770,922
Additions, (new provisions)		118			19,650
Recovery from transfer of proceedings		(7	)		(1,381	)
Uses		-			(7,322	)
June 30, 2013 closing balance		784			781,869

The movement in the provision for legal proceedings as at December 31, 2012 is as follows:

	Number of Proceedings			Provision Amounts
January 1, 2012 opening balance		812			682,158
Additions, (new provisions)		309			402,044
Recovery from transfer of proceedings		(446	)		(307,789	)
Uses		(2	)		(5,491	)
December 31, 2012 closing balance		673			770,922

(2) Corresponds to the estimated pension amounts, pending payment, for people who joined Ecopetrol after January 29, 2003 (Act 797 of 2003) and until the first quarter of 2004, who are covered by the General Pension Scheme (from the Spanish Régimen General de Pensiones).

(3) The decrease corresponds to $30,214 mainly used in the following fields: La Cira, Casabe, Guajira, Tibu, Lisama, Teca-Cocoma, Tesoro, Llanito, Galán, Yariguí-Cantagallo, and Nutria.

The following shows the movements in the provisions for short term abandonment, facility dismantling and environmental recovery costs:

	As at June  30, 2013			As at December  31, 2012
Opening balance:		1,358			89,193
Update studies on well abandonment costs		-			(18,737	)
Short-term update		-			29,868
Uses		(30,214	)		(98,966	)
Closing balance		(28,856	)		1,358

(4) Represented by: (i) $28,395 for potential PDVSA claims for payment of works to clean up and decontaminate Lake Maracaibo in Venezuela, and $71,108 for situations with environmental implications; (ii) $154 corresponding to the success-based fees for the representative in the litigation against Ecopetrol S.A. initiated by Industrias Crizasa; and (iii) $364,907 for provisions created in order to anticipate potential events of nature and other that may affect transportation facilities and impact the regions where there is presence. As of January 2012, three large scale projects are created: Dosquebradas Project, Integrity Program, and Contingency Program.

44 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(5) The movements of the provision for long-term abandonment, facility dismantling and economic recovery costs is as follows:

	As at June  30, 2013			As at December  31, 2012
Opening balance		3,802,841			3,566,262
Additions, updates - (Decreases)		-			266,447
Short-term transfers		-			(29,868	)
Retirement of assets		(66,739	)		-
Closing balance		3,736,102			3,802,841

(6) Includes the interim relief ordered by the Council of State in its decree of June 24, 1994 in the invalidity action brought by the Ministry of Mines and Energy against Comuneros (community members) of Santiago de las Atalayas and Pueblo Viejo de Cusiana, corresponding to the attachment and seizure of the payments to be made by Ecopetrol for royalties, based on Royalty contracts No. 15, 15A, 16 and 16A, declared null and void by the Council of State in its ruling of September 13, 1999, in which it was ordered that said interim relief should be cancelled and that the attached and seized amounts should be handed over to the State – the Ministry of Mines. Ecopetrol has capacity as receiver. Of said amount, $90,752 corresponds to the value initially recognized by Ecopetrol, as well as the valuation of the fund containing the resources; $333,748 corresponds to generated interest. In a ruling on December 12, 2012, notified by edict on January 21, 2013, the Council of State declared that the special plea for reconsideration filed by the Comuneros was dismissed. Said special plea for reconsideration was filed on December 13, 1999 by the Comuneros..

(19) Other Long-term Liabilities

The balance of other long-term liabilities is as follows:

	As at June  30, 2013		As at December  31, 2012
Credit deferred income tax		1,865,983		1,657,613
Advances received from Ecogas for BOMT’s		335,928		369,517
Other liabilities		43,275		76,685
Total		2,245,186		2,103,815

(20) Shareholders’ Equity

Subscribed and Paid Capital

Ecopetrol’s authorized capital amounts to $15,000,000, and is comprised by 60,000,000,000 ordinary nominative shares at a $250 pesos par value each. 41,116,698,456 of such shares have been subscribed represented by 11.51% of non-controlling interest and 88.49% held of shareholders from Government entities. The value of the reserve shares amounts to $4,720,825 comprised by 18,883,301,544 shares.

45 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Additional Paid-in Capital

Mainly corresponds to: (i) The surplus with regard to its par value derived from the sale of shares upon capitalization in 2007 amounting to $4,700,883; (ii) $31,225 corresponding to the value generated by placing shares on the secondary market, arising from the execution of guarantees from debtors in arrears in accordance with the stipulations of Article 397 of the Code of Commerce; and (iii) the surplus over the par value arising from the sale of shares awarded in the second round, which took place in September 2011, amounting to $2,222,441.

Detail of the additional paid-in capital is as follows:

	As at June  30, 2013			As at December  31, 2012
Additional paid-in capital s		6,954,549			6,954,549
Additional paid-in capital receivable		(292	)		(302	)
Total		6,954,257			6,954,247

Summary of valuations and Surplus on Concept of valuations

	As at June  30, 2013		As at December  31, 2012
Properties, plant and equipment (i):
Plant and equipment		3,805,077		4,997,112
Buildings		1,731,499		2,216,476
Land		2,250,321		2,805,889
Pipelines and lines		1,308,374		5,374,552
Transportation equipment and other assets		65,421		107,321
Communication and computer equipment		21,906		33,070
		9,182,598		15,534,420

	As at June  30, 2013		As at December  31, 2012
Variable yield investments:
Investments in mixed economy companies		710,229		647,119
Investment in Government companies		376,517		496,125
		1,086,746		1,143,244
Total		10,269,344		16,677,664

(i) As at June 30, 2013, valuations of property, plant and equipment decrease by $6,351,822 mainly for the transfer of pipelines and lines to CENIT.

Equity Reserves

The legal reserve is made up of 10% of net income and can be used to offset losses or distribute in the event of liquidating the Company.

On March 21, 2013, the results for 2012 were considered by the General Assembly of Shareholders, at which it was decided not to increase the legal reserve since it currently represents 50% of the subscribed and paid capital.

46 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Similarly, increases were made in the reserves for compliance with Regulatory Decree 2336 of 1995 (reappraisal at market prices) for $215,406. From such amount, the reserves accumulated as at December 31, 2012 amounting to $1,829,362 were also released; and the reserves for executing investment projects amounting to $2,628,878 were increased, as well as $1,260,000 for performing infill drilling campaigns, and $1,338,204 for unrealized profits of the Business Group. Additionally, reserves amounting to $605,135 were released to strengthen transportation infrastructure.

Detail of reserves is as follows:

	As at June  30, 2013		As at December  31, 2012
Legal reserve		5,139,587		5,139,587
Occasional reserves for investment programs		9,945,733		5,323,786
Regulatory Decree 2336 of 1995		215,406		1,829,362
Total		15,300,726		12,292,735

Incorporated Institutional Equity

Corresponds to the product of commercial activity mainly linked to the following associates contracts: Nare; Matambo; Garcero; Corocora; Estero; Caracara; Sardinas 6, Remache Norte 3, Abejas 3, Jaguar T5 and T6 wells; Orocué; the Guarilaque 7 well; Campo Rico; Candalay, Jordán 5, Remache Norte 2 and 5, Abejas 2 and Vigia wells; and the incorporation of the Cocomá materials warehouse.

Effect of Applying the Government Accounting Regime - RCP (from the SpanishRégimen de Contabilidad Pública)

Corresponds to the transfer of negative balances derived from devaluations of property, plant and equipment, as established by the Public Accounting Regime - as from 2008.

This heading also shows responsibilities pending decision arising from proceedings on loss of materials, through enforcement of the process established in the above-mentioned standard.

(21) Memorandum Accounts

Detail of memorandum accounts is as follows:

	As at June  30, 2013		As at December  31, 2012
Debtor memorandum accounts:
Exploitation rights - Decree 727 of 2007 (1)		71,875,645		65,885,263
Other contingent rights and debtor accounts (2)		32,959,521		25,276,301
(Deductible and non-deductible) costs and expenses		22,890,984		22,033,048
Pension-related autonomous equity (3)		11,592,849		11,866,064
Securities given in custody and guarantee		1,776,797		5,549,724
Implementation of investment projects		31,484		129,455
Legal proceedings		724,515		648,581
Total		141,851,795		131,388,436

47 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

	As at June  30, 2013		As at December  31, 2012
Creditor memorandum accounts:
Legal proceedings		35,026,321		33,504,773
Goods received in custody (4)		29,997,253		27,328,905
Contractual guarantees (5)		29,013,405		14,327,340
Pension-related autonomous equity (7)		12,081,316		11,730,386
Non-tax liabilities		10,660,393		9,821,795
Other contingent liabilities (6)		3,244,490		3,242,524
Potential liabilities - pension liabilities (7)		611,654		809,596
Non-taxed income		5,567,612		5,821,444
Mandate agreements (8)		1,380,177		1,416,574
Administration funds - Decrees 1939 of 2001,  and 2652 of 2002		973,564		973,565
Future BOMT payments		67,244		108,769
Total		128,623,429		109,085,671

(1) Reserves evaluated as at December 31, 2012 based on the volumes in the audited reserves study and applying the average price set by SEC approved regulations.

On March 7, 2007, Decree 727, which replaced Decree 2625 of 2000, was issued featuring the regulations for valuating reserves and accounting for the Nation’s hydrocarbon reserves in the Company’s financial statements. The decree also establishes that the value of the hydrocarbon exploration or production rights it owns must be recorded. This value is recorded under memorandum accounts, in accordance with the opinion provided by the National Accounting Office - CGN (from the SpanishContaduría General de la Nación); however, the memorandum accounts are not part of the Company’s balance sheet.

(2) The balance corresponds mainly to the following: (i) The balance of tax memorandum accounts amounting to $30,224,255, which reflect the differences between the values of both equity and income statement accounts taken from the 2012 tax return, and the accounting balances. The differences are derived from concepts such as valuating, allowance not accepted for tax purposes, the difference in the amortization method for oil investments, which is done by using the units of production method for accounting purposes, and by using the straight-line method for tax purposes, and the effect of the adjustment for inflation, amongst other, (ii) securities in custody amounting to $2,253,560 and (iii) Other contingent rights, mainly for recognition of the right linked to high prices for the Quifa contract amounting to $481,706.

(3) Reflects the contingent right (debtor account) on resources placed in the pension-related autonomous trust, to pay transferred pension liabilities, in order to control the existence of liquid resources in the autonomous equity fund. The value transferred at June 30, 2013, amounting to $11,592,849 ($10,092,528 on the date of transfer, December 31, 2008), corresponds to the pension liability for monthly pension payments, shares and pension bonds; the amounts tied to health and education remain within Ecopetrol’s pension liability. The transferred resources, and their yields, cannot change destination or be returned to the Company until all pension liabilities have been fulfilled.

48 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Detail of pension-related autonomous pension trust funds is as follows:

	As at June  30, 2013		As at December  31, 2012
Consorcio Ecopensiones 2011		3,045,580		2,855,165
Porvenir S.A.		2,555,738		2,609,500
Consorcio Pensiones Ecopetrol 2011		2,088,883		2,151,960
Unión temporal Skandia-HSBC		1,832,099		2,142,634
Consorcio Bogotá-Colpatria-Occidente		2,070,549		2,106,805
Total		11,592,849		11,866,064

(4) Includes, mainly, the value of royalties corresponding to the balance of Ecopetrol reserves, amounting to $29,698,047 (2012 - $27,222,901), computed according to SEC-approved regulations. This heading also includes the inventories of products sold and materials pending delivery to clients, amounting to $37,447 (2012 - $37,203), as well as goods received in concession custody: Coveñas, $41,660; Pozos Colorados, $21,058; and Tumaco, $6,083 (2012 - $41,660; $21,058 and $6,053, respectively).

(5) Includes contracts pending execution, in Pesos, Dollars and Euros, updated at the representative market rate as at June 30, 2013, amounting to $23,898,764 (2012 - $14,327,340); and standby letters of credit guaranteeing contracts signed by Ecopetrol, amounting to $855,409 (2012 -$327,705).

The financial closing for awarding two contingent guarantees to Refinería de Cartagena S.A. - Reficar by Ecopetrol was carried out on December 30, 2011. Such guarantees are part of the financial support granted by a group of Export Credit Agencies and by commercial banks for the project of expansion and modernization of Refinería de Cartagena. The financing structure is of the Finance Project type with a maximum repayment term of 14 years, counted as of the six months following the date of the Project termination. For the Project financing purposes, Ecopetrol granted to Reficar: i) A contingent guarantee for the resources necessary to complete the project (USD2.000 million, equivalent to $3,858,000 at the Market’s Representative Exchange Rate of June 30, 2013); and (ii) a contingent guarantee for the payment of eventual amounts that could be needed by Reficar for the debt service between June 2013 and July 2014 (USD208 million, equivalent to $401,232 at the Market Representative Exchange Rate effective at June 30, 2013).

(6) Includes, mainly, the closed pledge on the shares held by Ecopetrol S.A. directly or indirectly in Hocol Petroleum Limited, Offshore International Group, and Polipropileno del Caribe S.A., with 120% coverage of the credit amount granted by the national bank (see note 14(1)).

(7) Made up of the value of the actuarial computation of monthly pension payments, shares and bonds as at June 30, 2013, plus the percentage of amortization of the 2010 reserve that arose from change in the accounting principle for amortization. As at June 30, 2013, the amortizable reserve was 4%, equivalent to $611,654.

49 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

The balance of the amortized actuarial liability is as follows:

Concept	As at June  30, 2013			As at December 31, 2012
Actuarial computation of the liability for monthly pension payments and pension bonds		12,692,970			12,539,982
Less - Actuarial computation pending amortization		(611,654	)		(809,596	)
Amortized actuarial liability		12,081,316			11,730,386

The balance of pension-related autonomous trust funds, the value of the actuarial reserve, and the amortized value of the pension liability for monthly payments are included in memorandum accounts.

The actuarial computation was carried out by using a technical interest rate of 4%. The increase in salaries, pensions in cash and pensions in kind was computed by using the average inflation rate as determined by the National Statistics Administration Department (From the SpanishDepartamento Administrativo Nacional de Estadística - DANE), during the three years immediately preceding the computation year.

As at December 31, 2012, 13,210 people were covered in the actuarial computation, 19,528 were covered in the actuarial computation of health care and education, and 13,907 were covered in pension bonds.

(8) Includes the value of assets received in custody from Refinería de Cartagena S.A. in fulfillment of obligations acquired under the mandate contract signed between Ecopetrol and that Company to operate the refinery, namely: product inventories amounting to $415,108 (2012 - $429,108), materials inventory amounting to $30,269 (2012 - $30,269), and property, plant and equipment amounting to $934,800 (2012 - $957,197).

50 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(22) Revenues

The balance of revenues is comprised is as follows:

	For the six-month period ended
	June 30, 2013		June 30, 2012
Domestic sales:
Mid-distillates		4,620,116		4,436,060
Gasoline		2,538,772		2,552,536
Services		785,067		775,850
Other products		621,439		626,415
Crude (1)		592,041		226,574
Natural gas		525,827		484,277
L.P.G. and propane		175,621		275,845
Asphalts		173,484		195,669
		10,032,367		9,573,226
Recognition of price differential (2)		237,858		429,524
		10,270,225		10,002,750
Foreign sales:
Crude (1)		17,705,748		18,061,908
Fuel oil		1,711,402		1,572,748
Natural gas (1)		297,631		347,446
Propylene		64,520		73,472
Diesel		23,231		-
Other products		13,228		19,301
Gasoline and turbo fuel		8,531		163,809
		19,824,291		20,238,684
Total revenues		30,094,516		30,241,434

(1) Since 2010, crude oil and natural gas sales to Refinería de Cartagena and propylene sales to Comai have been recorded as foreign sales as they are originated in a free zone. In 2013, $2,524,265 (2012 - $2,518,555) in crude oil sales, $32,221 (2012 - $44,030) in natural gas sales, $64,520 (2012 $80,365) in LPG and propylene sales were recognized to results.

(2) Corresponds to the application of Decree 2713 of 2012, which defined the procedure for in price differentials (value generated by the difference between parity price and regulated price, which can be positive or negative).

51 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(23) Cost of Sales

A breakdown of the cost of sales is as follows:

	For the six-month period ended
	June 30, 2013			June 30, 2012
Variable costs:
Hydrocarbon purchases - ANH (1)		3,966,844			4,506,736
Imported products (2)		3,764,757			3,741,356
Hydrocarbon transportation services		1,967,793			998,240
Purchase of crude in association and concession contracts		1,784,082			2,155,646
Amortization and depletion		1,732,738			1,551,439
Purchases of other products and gas		494,564			440,625
Initial inventory less final inventory		194,493			(660,605	)
Processing materials		124,568			117,943
Electric power		110,682			87,168
Volume adjustments and other allocations		(70,509	)		(77,442	)
Total variable costs		14,070,012			12,861,106
Fixed costs:
Services contracted in associations		1,048,163			845,442
Maintenance		664,369			551,297
Depreciation		643,184			613,440
Labor costs		578,782			490,788
Contracted services		564,370			492,414
Taxes and contributions		217,577			85,165
Operating materials and supplies		145,849			108,966
Non-capitalized project costs		141,543			145,002
Amortization of deferred charges, intangible assets and insurance policies		38,925			43,957
General costs		27,580			22,772
Amortization of the actuarial computation for health and education		18,964			14,299
Total fixed costs		4,089,306			3,413,542
Total cost of sales		18,159,318			16,274,648

(1) Corresponds to Ecopetrol’s crude oil and gas purchases from the ANH derived from domestic production, both by the Company in direct operations and by third parties.

(2) Corresponds mainly to purchases of very low sulfur diesel oil and diluents agents to facilitate the transportation of heavy crude oil.

52 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(24) Operating Expenses

A breakdown of operating expenses is as follows:

	For the six-month period ended
	June 30, 2013			June 30, 2012
Administration:
Amortizations (1)		148,392			145,574
Labor expenses		117,145			90,992
General expenses		50,320			53,027
Depreciations		7,645			11,303
Amortization of the actuarial computation for health and education		1,225			883
Rentals and leases		285			1,322
Taxes		99			80
Maintenance		-			7
		325,111			303,188
Marketing and projects:
Taxes		659,340			643,944
Covenants for support of public security		156,723			128,585
Operating provisions, net (4)		148,290			233,724
Exploration expenses (2)		141,095			95,253
Labor expenses		124,114			103,431
General expenses		113,945			93,184
Project expenses (3)		79,997			259,885
Customs operation		60,170			44,737
Audit installment		26,566			34,392
Contributions and donations		26,294			14,755
Loss of fuel		20,589			24,812
Transportation via gas pipeline and freight		12,626			66,206
Maintenance		6,752			7,013
Previous periods		(18,795	)		(166,477	)
		1,557,706			1,583,444
Total operating expenses		1,882,817			1,886,632

(1) During 2013, $137,163 (June 30, 2012, $137,305), corresponding to the goodwill of Propilco, Ocensa, Hocol, Offshore and Equión, was amortized.

(2) Exploration expenses as at June 30, 2013 on the concept of unsuccessful explorations amounted to $17,412. The most significant ones were: Dry wells for $14,330 (Nunda, $6,300; Embrujo, $5,721; Pecari, $2,722; and Reto, $1,830), seismic studies for $53,452, viability studies for $26,183, and entries not subject to capitalization for $44,048.

(3) Project expenses related to the construction of the pumping station San Fernando-Monterrey for $47,376, new Refining schemes for $9,882, advanced biofuel project for $5,643, and potential evaluations of bituminous sands, and heavy crude oil for $7,030.

53 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Detail of operating provisions is as follows:

	For the six-month period ended
	June 30, 2013		June 30, 2012
Transfer of pension liabilities		157,687		294,456
Debtors		26,656		11,701
Litigations		24,981		191,128
Inventories - products and materials		3,382		-
Property, plant and equipment		1,182		19,166
Investments		13		-
		213,900		516,451

(4) Detail of the recovery of operating provisions is as follows:

	For the six-month period ended
	June 30, 2013		June 30, 2012
Property, plant and equipment		37,554		138,575
Variable bonds		20,829		-
Abandonment costs		3,669		134,970
Debtors		1,974		-
Litigations		1,381		135,247
Environmental contingencies		203		-
Other		-		6,170
Inventory of products and materials		-		2,735
		65,610		417,697
Net		148,290		98,754

(25) Financial Income (Expenses), Net

Detail of financial income (expenses), net is as follows:

	For the six-month period ended
	June 30, 2013		June 30, 2012
Income:
Foreign exchange gain (1)		1,354,358		2,230,730
Yields and interests		117,314		209,647
Dividends in cash		66,576		32,541
Profit from appraisal of investment portfolio		48,540		89,852
Hedging operations (2)		916		3,682
		1,587,704		2,566,452
Expenses:
Foreign exchange loss (1)		1,305,481		2,642,254
Interest		190,583		178,412
Other minor expenses		22,735		1,199
Hedging operations (2)		1,667		3,184
		1,520,466		2,825,049
Net		67,238		(258,597	)

54 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(1) The accumulated profit for net exchange differences as at June 30, 2013 was $48,877 (June 30, 2012 - loss for $411,524), is mainly due to the effect of the peso devaluation. The accumulated variation of the rate as of June 30, 2013 was of 9,1%.

(2) The results of hedging transactions for the six-month period ended June 30, 2013 and 2012 correspond to those derived from exchange rate derivatives.

(26) Pension Expenses

Detail of pension expenses is as follows:

	For the six-month period ended
	June 30, 2013		June 30, 2012
Amortization of actuarial computation and pensions (1)		174,866		176,122
Health care services		109,012		97,155
Education services		31,030		32,519
		314,908		305,796

(1) In December 2012, the actuarial computation study was updated. The actuarial computations of health care and education were prepared applying the mortality tables updated in 2010 and using the technical interest rate of 4,8%. In order to estimate the value of these items’ future benefits, an increase of 4,755% was used, corresponding to the 2012 inflation rate plus an additional percentage of 1,5%, taking into consideration the Company’s growth.

(27) Inflation Gain

Corresponds to the net amortization as of June 30, 2012 for a value of $10,735; in 2013 it does not exist since the amortization of the deferred monetary correction ended in December 2012.

(28) Other Income (Expenses), Net

Detail of other income (expenses), net is as follows:

	For the six-month period ended
	June 30, 2013		June 30, 2012
Other income:
Profit on sale of materials and property, plant and equipment (1)		184,143		1,585
Deferred BOMT income		64,165		62,645
Recovery of collection expenses		34,536		40,276
Other minor revenues		3,758		2,345
Compensation received		2,910		5,605
Income from services		1,744		1,484
Recovery of payroll expenses		987		1,002
		292,243		114,942
Other expenses:
Gas pipeline availability under BOMT contracts		52,155		55,340
Inter-administrative agreements and social investment		22,564		46,197
Loss in fixed assets writes-off		20,143		114
Other minor expenses		7,122		4,959
		101,984		106,610
Net		190,259		8,332

55 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(1) Corresponds mainly to $154,844 profit for divestment of fields El Difícil, Guarimena and Entrerríos related to assignment of rights and retirement of assets in June 2013.

(29) Results from subsidiaries, Net

The results of the application of the equity method to subsidiaries and significant influence companies for the six-month periods ended June 30, 2013 and 2012, were as follows:

	For the six-month period ended
	June 2013			June 2012
Cenit - Transporte y logística de hidrocarburos (1)		386,353			-
Hocol Petroleum Company		134,294			267,638
Ecopetrol Pipeline International Limited (2)		182,642			12,813
Equion Energia Limited		124,296			204,471
Ecopetrol Capital AG		15,659			31,775
Invercolsa		23,805			1,465
Black Gold Re Limited		6,651			12,675
Ecodiesel Colombia S.A.		5,495			316
Offshore International Group		6,138			48,881
ODL Finance S.A.		-			18,590
Ocensa S.A.		-			13,388
Serviport (2)		-			1,414
Ecopetrol America Inc.		-			(4,450	)
Oleoducto de Colombia S.A.		-			7,600
Oleoducto Bicentenario de Colombia S.A.		-			(3,368	)
Ecopetrol del Perú S.A.		-			(6,180	)
Ecopetrol Oleo e Gas Do Brasil Ltda.		-			(117,756	)
Polipropileno del Caribe S.A.		(2,548	)		7,500
Refinería de Cartagena S.A.		(87,601	)		(25,383	)
Andean Chemicals Ltd.		(90,299	)		(22,099	)
Ecopetrol Global Energy (3)		(271,697	)		(38,674	)
Net Result		433,188			410,616

(1) The investment in CENIT includes the participation in Ocensa S.A, Oleoducto de Colombia S.A., ODL Finance S.A, Oleoducto Bicentenario de Colombia S.A. and Serviport.

(2) ECP Transportation Investments and Ecopetrol Transportation Company were merged into Ecopetrol Pipeline International Limited.

(3) The investment in Ecopetrol Global Energy includes the participation in América Inc, Ecopetrol Oleo e Gas Do Brasil Ltda and Ecopetrol del Perú S.A.

56 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

(30) Contingencies

The following is a summary of the most significant legal proceedings with claims above $10,000 million pesos, for which allowances have been recognized, in accordance with the evaluations of the Company’s internal and external advisors, as at June 30, 2013 and December 31, 2012:

Proceeding	Suit	Provision Amount as at June 30, 2013		Provision Amount as at December 31, 2012
Garcero partnership contract	Class action suit against Ecopetrol S.A., the Nation, the Ministry of Mines and others, on the extension of the Garcero partnership contract.		155,184		155,184
Municipalities of Aguazul and Tauramena	Class action suit. Contributions to the solidarity and electric-power-generation income redistribution fund, pursuant to Law 142 of 1994.		220,044		220,044
Municipality of Arauca	Class action suit. Contributions to the solidarity and electric-power-generation income redistribution fund, pursuant to Law 142 of 1994.		283,010		283,010
Salary impact suit – saving stimulus	Apply the salary impact to the amounts paid under the saving stimulus scheme and consequently reassess fringe benefit payments (legal and extralegal) and monthly pension payments, from the date at which Ecopetrol S.A. began recognizing it.		18,689		18,689

As at June 30, 2013, the balance of the allowance for legal proceedings was $781,869 (December 31, 2012 - $770,922).

(31) Commitments

Gas Supply Contracts

In addition to existing contracts, the Company has entered into new gas sale or supply contracts with third parties, such as, Gas Natural S.A. E.S.P., Gecelca S.A. and Empresas Públicas de Medellín E.S.P. At June 2013, Ecopetrol had sold an average of 541.98 GBTUD in the amount of $818,263 (2012 - $1,519,631) million Colombian pesos (including exports).

57 (Continued)

ECOPETROL S.A.

Notes to the Interim Unconsolidated Financial Statements (unaudited)

Ship or Pay Contracts

Ecopetrol S.A. and ODL Finance S.A. have signed the following Ship or Pay contracts: i) the first contract is an agreement that supports the five-year debt obligation (Financial Tariff) with Grupo Aval. All payments are collected in a trust fund, from which the debt amortization payments are made. This contract was replaced by a new one, subscribed in May 2010, for a seven-year term to reflect the new terms agreed with Grupo Aval, and ii) the second contract backs a securitization process (securities-related autonomous trust) for a seven-year term. The securities are administered from their issuance date by an autonomous trust fund structured for that purpose, to which the rights for invoicing, collecting and paying the securities holders have been assigned.

Under the first ship or pay contract, ODL Finance S.A. is committed to transport 75,000 barrels of crude a day during the two-year grace period for the facility, and 90,000 barrels of crude oil per day during the subsequent five years. Under the second contract, ODL Finance S.A. is committed to transport 19,500 barrels of crude during the first phase of the construction project (which began operations in September 2009) and 39,000 barrels of crude oil a day from the beginning of the second phase, which took place in the first quarter of 2010.

Bicentenario Ship or Pay Contract for Crude Oil Transportation

In order to finance the construction Stages 0 and 1 of the Bicentenario oil pipeline, crude oil transportation contacts were signed, creating the obligation on the part of the respective shareholder or affiliate to ship crude oil under its ownership: (i) from the Araguaney station to Coveñas, (ii) under the ‘ship or pay’ modality, and (iii) up to the capacity of the shareholder, determined by its share in Bicentenario, which will depend on the contracted capacity of all Bicentenario’s shareholders and/or affiliates, and which shall not be less than 110,000 bpdc.

In exchange for the shipping service, the shareholder or its affiliate must pay a fixed monthly fee, even if no barrels at all are shipped, from one of the following dates, whichever comes first: (i) The date in which the oil pipeline begins operation or (ii) 12 months from the date of the first disbursement of the syndicated loan, namely July 5, 2013. The right to receive the fee under the ship or pay modality was assigned to an autonomous trust fund created for the purpose of administering and making payments.

The contracts will initially be in effect from the date of the first payment of the fee, or the date of the beginning of service, whichever takes place first, and will end on either (a) 12 years after the beginning of the period, or (b) the day on which all of the obligations under the contract have been discharged, whichever comes last. Once the above period has been completed, the contract will be in effect for an additional period of 20 years.

(32) Subsequent events

Issuance and Placement of Bonds

The Board of Directors of Ecopetrol S.A. in its ordinary meeting of July 12, 2013 issued the following approvals with respect to the Company’s financing operations:

It approved the final versions relating to the regulations and the issuance and placement prospectus of internal public debt bonds and commercial papers of Ecopetrol S.A.

It authorized Management to carry out the necessary actions for the renewal with the SEC, and to initiate all processes with the local and international authorities for the structuring, issuance and placement of public debt securities of Ecopetrol S.A. in the international market for up to US$3 billion.

58