EC - Earnings call transcript Q3 2020

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Operator

Good morning. My name is Hilda and I will be your operator for today. Welcome to the Ecopetrol’s Earnings Conference Call in which we will discuss the main financial and operations results for the Third Quarter 2020. All lines have been muted. There will be a Q&A session at the end of the presentation.

is by mention projections Ecopetrol’s company’s performance. it in the of begin, future call this senior we important that to comments the Before management include results, constitute or risks that could as These into uncertainties any do they take not to projections future nor materialize. do account commitment

of event Felipe will projections attention. Alberto a this shared you Ecopetrol; As the conference Ecopetrol Bayón, be are Jaime results call. Thank may no assumes future result, call led Mr. begin in Mr. by different CEO in The and CFO. COO; responsibility that from you Consuegra, conference. Bayón, the your Caballero, your for

Felipe Bayón

the to emergency continue continue discuss morning, and overcome the to Personal financial be And welcome where of you the to health call, for safe. have awareness during our We your and we this year. Good to and hope families operating be will we social XXXX. results elements experienced everyone. quarter that key conference third

the of with demand by a has our levels. aligned and quarter performance operational a operations higher gradual This increase third ramp with in financial and year been recovery. up associated The activity operating in better characterized reflected was

where protocols. to rigs we end April progressively remotely. Ecopetrol personnel thanks our have June an their example, biosafety active work continue of Likewise, had in drilling on-site September. strict to about of For to field returned our safety, and digital To-date, employees S.A., XX rigs of transformation our XX% preserve since under our program, from health work employees’ increase in rigs the two have to by order to

the optimizations be plan during measures, to facilities us steady in as process allow in remotely was of launched considers of increased self that staff safe played employees use Within and and working XXXX part and allow and XXXX, to of the we role the has October during a infrastructure, amongst will for This generate remain operation which will to process, scheme to tools. operational pilot adaptation of pilot an Ecopetrol office distancing Group. will digitalized will implementation our new that analytical the efficiencies the others return crucial our management prepared the artificial company’s and intelligence this flexible preserve of normal. a we through social Although, year a to the highlight

as with reactivation the health País, of program, social to we economies. being our and the by and executed Group well well commitment of caused through of XX% line recovery COVID-XX, Apoyo the strengthening Regarding the emergency the have the approved investment investment local Ecopetrol’s as Colombians, in

Let’s April. move around easing sales consequence to have Gap] in This end on allowed recent to second of to the to improve to the barrel the at most lockdown in by compared to in lowest levels of early it’s of of our and year, level restrictions the in the September, first demand the XXX% of return half volumes resulted sales the a that activity. observed the March the observed recovery highlighting economic from difficult in to reactivation recovery products of $XX when [Audio us quarter. discuss end by per barrel the of coping $XX the market of trend the After of demand one third rose in observed quarter per quarters next main the Local end slide our conditions. the with years compared for

per around per highlight crude hand, the second to the the of significant barrel. $XX to barrel stood basket sales $XX other quarter the basket also we recovery On when our compared

continue However, we to similar with levels still XXXX. those observed in the price of crisis

results. summary our of Let’s quarter move to slide next a the on for third

per compared resulted events reached second The price quarter. along details have a when day. an XXX,XXX during compared our That net Ecopetrol’s recovery prices recovery and provide Ecopetrol and Consuegra, operations EBITDA our quarter oil X,XXX the the conditions. production financial perform for billion quarter, security the the results operating some results COPX.X in in now quarter. production a better of more I that quarter. who equivalent with the second when demand with to compared XXXX. third of the in year, the better difficult Despite to impacted as operational second to and is increase to of Group trillion XX% revenues, higher Our the barrels barrels give line reached of of COPXXX will Alberto will income floor further in

Alberto Consuegra

Thank you, Felipe.

operating aligned saw gradual we and totaling of recovery a three the a demand domestic drilled levels. During recovery higher over price exploration, wells, results XX the we with year. quarter, wells our third On

progress Energy in the agreements by in the Lewis Hocol of Atlántico. gas the of subject Currently, completing barrels the we Perdices the natural Energy highlight drilled discovery Sales our for assignment test XXX,XXX exceed four continue ANH Chacha equivalent in feet in inclusion commercial would X reached with exploration production was with cumulative in well XXXX. X.X more average appraisal production operating Arrecife-X do per Ecopetrol’s We I frontier achieved [ph], planned carried in the Xst, approval. the due than wells Lewis drilled, the through wells the project. track the October department on gas to Groups originally targets our by block XXXX well, of of joint extensive oil and and million is side to cubic out Hocol to expect began Abroad, of like three phase of to of of Gato interests the a the day. a XX day. appraisal Hocol play gas Mato located agreements the of per field the to of an

by the to year. with production near of oil expected We for up line XXX,XXX equivalent per day barrels our target year end

Ecopetrol. part Ecopetrols company’s Group’s and Additionally, pillars. turnover asset launched an entire development the by offer This by six and the Ecopetrol process owned XXXX, in supports Campos three nine is assets, strategic Group and to them portfolio its stake initiative Ronda divestment production of Hocol of

the quarter, have Currently, to the will greater During some XXX pipeline heavy are in efficiencies. analyzing the segment tested consolidated stability we combined of scheme. main systems, refineries The downstream per a operational crude $X.X allow economic units. transporting business dilution our barrel The presented us and margin centistokes of of the barrels per feasibility gross reached which along XXX,XXX of throughput its of we day.

versus reported figures, month most XX% the these as into a in our throughput Looking critical XXXX. April, September, that it worth of of is noting recovery levels their refineries

exclusively monthly throughput day per achieved barrels and we during consolidated For barrels year per operational and September in distillate within to average throughput between of capacity full day. domestic end petrochemical with records a remarkable XXX,XXX this yield the set July. At our XXX,XXX Cartagena in crudes expect exhibit Refinery two performance. XXXX Esenttia the quarter. In business, for an XX% range The over

volume to the During initiatives. the review to next Please sales historical continue quarter, and slide our it highs records. polypropylene production reported gas

gas of production an previous of by XX% equivalent, its users compared upstream XXX,XXX increase the Our gas have this mainly processed the and Ecopetrol reached in and XXX September barrels to to gas to segments XX% due the fields natural Gas the Through of at of year, maintains this posted EBITDA operations oil as fact new to social aiming least management acquisition period NGL same margin EBITDA. year. the due contributed close to of investment of an the XXXX. initiative commercial Guajira interest increasing connected connect the new in the Chevron’s for of and users demand. XX,XXX when

process major third gas natural fields. quarter, we commercialization the During from completed the XXXX

to XXX% research seven of move to duration us contract commercial next is contracts place. framework In the allowed to Colombia, Please Our comprehensive years. the regulatory in strategy projects let’s a with needs one in the pilot from on develop year the client’s to slide. ranging

contract, process move are So projects environmental before obtaining we setting. for process we Selection special authorities. forward with may assignment with the of awarded would begin the licensing the we Contractor of contracts the If ANH research a

Regarding Oxy. activities two operation our late you as Basin currently July partner the in with Texas, rigs in our recall, with business resumed together Permian in we may in

during By of first an average the to a we per oil of X,XXX of end drilled Ecopetrol X,XXX of During barrels the in expect XXXX quarter out. completed net to new XXXX production, wells and in third equivalent XX have estimated be range the we for five production day ride wells to XX drilled quarter wells. before

in next Let’s to our in of slide terms to costs. order the on disclose move efforts

annual the For we reflected our XXXX, have results. incorporated trillion savings plan, in into gradually which been company’s financial COPX.X have in

decrease was a per by quarter, versus exchange $XX.X unit significant XX% in a period XX% explained effect. to reduction the period barrel, is tariffs, purchases During shift well and in the listing explained XXXX. the decrease inputs, barrel the decrease mainly compared in The for as costs, the This per a costs. a same cost of XX% the as costs rate previous reduction fixed third mainly year, of the activities $X.X of of was by and the renegotiation and year, same total

quarter profitable Group’s our the reach efficiencies on reiterate will For I sustainable information greater enable production. to wish results. to commitment give which more we I a Notwithstanding associated now share and fourth Jaime with over operation financial achieving profitable of Caballero, foresee increasing wells, will time. the an reopening the in the floor to cost above, the to who order

Jaime Caballero

$XX Brent the year-to-date. trillion, generating first reach reverting exhibited than some the quarter debt-to-EBITDA $XX.X. of a indicators the equivalence. to current this showing Alberto. those improvement for Thanks the EBITDA barrel level market reached higher activities, the demonstrating was interventions despite you, versus remain, breakeven short-term breakeven, anticipate and $XX.X Please lower production improved Thank of next considering year-to-date, the gross compared EBITDA reference positive COPX.X end a to even cash to an levels, the of trillion conditions. the the prices, quarter. Thanks lower quarter the towards during The major to the increasing quarter. the third to in discuss once income COPX.X highlight to realization due first a the guarantee strengthened by fulfill quarter increasing the XXXX year, supported The Net necessary levels. for the of Brent a closing in optimizations, price, mainly to the operational a which to EBITDA of for the sales. lowest business basket Group’s was on again the increase more to flow, best across new per operating to slide positive comparable the the conditions estimates. which crude demand carried cash and If both quarter to than inflows income position which semester. in in due and contributed a previous experienced flow in and commitments income the Cash reference, which and quarter, COPX.X per Net on strategy XX% the was for of we the sales an generation from segments, out per is barrel. of let’s to amount increased are that EBITDA outflows for the I’d oil XX% downstream move second of Cash performance, our free commercial captured trillion higher the impact reversing upstream market grew Brent barrel, prepaid products. margin all period first improvement we year conditions OpEx obligations price like trend revenues the results, turnaround XXXX resilience to the

effect increase products. and in positive the to associated sold the gas Second,

by extension non-recurring inventories, lower maturity thanks material Fourth, gas billion volatility, due costs the financial not in offshore premium fields. in Fifth, during combination make an of events increase those which quarter. and did well the reactivation paid this allowed XXXX acquisition of revenue the the expenses OcensaBond, portfolio the as valuation in Guajira mark-to-market showed operating quarter, relevant associated the with the linked of and to observed as which as the net being trillion profile of from associated the securities of previous we to higher to improving a COPX.X La to the XXXX. wells mainly to business operations and assets offset reopening. Third, its austerity expenses, were the expense most The recognize valuation of COPXXX partially plan of of higher

reached income tax billion, tax increase the of for XX.X%. Net period result income the the third highest effective Finally, income quarter quarter with an of higher year-to-date. provision was for during the rate COPXXX the as a

during positive next slide. a COPX.X to in trillion, including flow CapEx capital free working flow Let’s quarter. outflows amounted the continue reached variations cash Operating COPX.X to please quarter cash for trillion. the the underpinning

shareholders majority paid dividend nation as and of and shareholder COPX.X to our the Invercolsa. period, COPX.X the outflow During the of balance to amounted transport trillion, non-controlling trillion which to the were subsidiaries

COPX.X shareholder. quarter, for short-term trillion bond, prepayment to among expect majority Ecopetrol the remaining due of Net the related During XXXX and the COPX.X as of Highlighting well we of quarter the fourth totaled operation refinancing pay the debt to Ocensa’s the obligations. disbursements balance these, prepayment trillion. as

Our plan, while reflecting the at COPXX maintaining the trillion, cash Group’s position business management deliver closed to discipline. ability cash

the current $X.X towards among mainly to execution continue lower directed campaigns billion, has the to investment refineries, Castilla, thirdly, community the rate of schedules of in time Permian, than required Rubiales the decrease and spread and been in and project lines. and factors totaled which COVID-XX plan. please cases, to, next affected situation the in Let’s Sur drilling our and secondly, postponement opportunities, Llanito and due Barrancabermeja view firstly, extended CapEx out September the that to Caño growth carried as operational fields resulting execution territories, to of measures blockades XX% expected execution implemented mainly the maturity from the activities with fields, slide the others. certain The of Cartagena Rubiales execution

the and fields, Tibú been among have to others. due hand, On achieved lower project Castilla, efficiencies in costs Casabe other

of execution acceleration reactivation Although in trend is execution challenges XXXX his billion and two and our all fourth of the President, of increasing drilling a the in range expect execution billion. a compared continuity completing and as increased to to during the The previous for facility projects execution operational we September. the underpinned leaving and fourth growth in quarter CapEx the fields CapEx the for the the remarks. I Mr. give by $X.X within main now $X in observed remain, investments total workovers, terms quarter maintaining Bayón Felipe floor segments, the quarters, closing strong

Felipe Bayón

Thank you, Jaime.

quarter, social past of and technology, and months to for year. third environment, end forward September, investment environmental the the some social move investment, COPXXX social to compared Ecopetrol has front our the billion nine continued commitment of COPXX TESG. in In to our During we first by governance, an to allocated the of billion

for As people operations. movement a the committed Valuable of disabilities the with their companies global milestone, inclusion within with XXX, quarter, up joined we The a of made

Jones to the Environmental will Sustainability to of and it’s again project. disclosure environmental company In to Petroleum governance, Industry terms Conservation it Dow Index Association, International And the report formalized, to the IPIECA, and promote adhering carbon to the on in social and within the industry. progress Standards, Sustainability adoption Accounting gas of continue Disclosures, improvements performance and recommendations. evaluating oil of Task Likewise, SASB, make we TCFD the The Force Climate-related Financial the

we front, of environmental the On strategy. in achievements four our axes highlight

First, we our to the quarter XX% in percentage XXXX. XXXX the reuse end of third increased at water XX% XQ from

of Vice Production our Presidency emissions regarding been XX% around have total fugitive identifying in Secondly, the strategy of the leaks. XXX monitored facilities

closure we repaired them. already some XX% of the have for we remaining September, of plan to and As definitive leaks That XXX and closed equates of a have leaks. the

the the from in of in in concentrations to images areas the satellite in with identify Space Thirdly, highest made leverage operations our analysis methane is being technology European Colombia. TROPOMI, progress order on the Agency,

concluded We expect analysis XXXX. to by be this December

we for have the launched in projects Solar from Park megawatts of signed scheduled Colombia. whose of Fernando XXX August, XX with which the in we of sources the XXXX, of wave by a November a XXXX. will the of in for target processes in our megawatts capacity largest self-generation park total of be a capacity of renewable is To different new generation begin meet Finally, regions to XXX solar competitive a construction contract in Colombia construction and megawatts, San

the safe, adaptability and efficient ethical employees operation commitment Ecopetrol Let’s move responsible. demonstrated to its of is slide. has on its that to and an the resilience, next

Social which of For quarter, main regions development ratifying we in to to and remain last operational, corporate TESG climate our sustainability Governance, you Technological social presented protects change committed our and the new plan financial the Environmental operate. and main the and business the year-end, metrics our commitment XXXX-XXXX strategy the Group’s of in transition pillars our we guaranteeing energy action, where to

our the as in joining report this Before the Thank an on well you targets to Ecopetrol’s is invite This and TESG us includes Q&A environmental, future. historical dashboard conference social governance data a the sustainable towards session, as to on move download the from all main you. website. moving to for you call. indicators, again, It designed annual I for

Now, open session. I to Q&A would like the to call the

Operator

you. from Thank question We [Operator Instructions] a have Barra from Gabriel UBS.

Gabriel Barra

have Felipe, here. Alberto. two end my for questions Hi, the Thanks presentation. I Jaime, from

developments company the right? company off tests, still lower you last the improvements towards expect that right? you -- those developments the new contracts and and National have figures company’s normalized next for question should is after per running steps is, think than presentation were So Colombia, when the we my in how look should coming in month. you the in company about the these level regarding for expectations $X.X the and the these you now my demand we in this Hydrocarbons the in framework if effect Thank is fuel XXXX the in launched the reported of the I Ecopetrol’s what And expect On our have fourth estimate here the levels XXXX going production the The first mean, barrel. result at by And demand new in see that What the we costs XXXX? production my of next here below size year And required set to these with should one the and But this you. the as from may, I they the regarding next monthly guidelines has base forward the country this I the the quarter the relation to And here questions Colombia? the question, -- opportunity. quarter. in -- mentioned, expect around pilot select timeline year-to-date, first cost, question saw the Agency execution would the the do to is has the pre-COVID, And development company -- that’s it’s advance be lifting of I If have just sales my unconventional developments from the interest to results. and of are the much regarding new the this how domestic how lifting case are during to delays here. of the on an return XXXX see -- more markets?

Felipe Bayón

Thanks, am the going part about ask I a Gabriel. I first Alberto unconventionals, take demand about lifting little will to Consuegra to talk on and cost. bit talk

we In terms been development the unconventionals, by the pilot projects be that norms government of will sign presented of regulation, we out again the the of by will how November, the ANH. the with conducted is end has around contract the the and hope

already As has we we want in area. know, this stated prequalified been Ecopetrol you have to operators that be and the publicly

We that conduct studies what we to next? inform will the impact or pilot assessment want the environmental projects. for to comes related all So, of the licenses work need the request the

the well logistics, contracting then place, start everything and licensing for will of we this the the be work we So, support and we once we works, the for piece year, to work the work will the civil around all licenses all the construction for a In start big And do rigs the request. to operations. and a end that’s start parallel, work in have and license will that preparation of pads, some able year preparatory the by construction works else.

it’s specific the specifically, themselves. wells when on wouldn’t will the because completing start, and of licenses dependent put then date activity drilling, largely and So the wells fracking on I a that of

close country the that as activity doing and terms on will data technical and decide thing you based the mitigate you again, concentrated have clarity stress give those probably the experience And in timeline at on Piloto at production us in Investigación impacts one have right we science the Permian on of that the by I quickly you In of the have for projects. in to of the Proyectos impacts, when end is pilot November the June. barrels as if look started have as how the area But can a on XX,XXX that, would the results de if potential the we the this, the from to timing. Midland, the in development, Texas we projects pilot we now know, once the ramped country we operations, of -- for look we up a a Integral, though, to proxy had

on of its activity that cycled, production the short and those. again, you will deploy bring quickly pilot being projects But the into can advance very So answer depend final market. into the and very the and quickly results how

one numbers expect that of But you diesel was resumed, gasoline are XX,XXX and In but do terms ballpark flights still go if as limited gasoline Alberto, demand. so can with And in will numbers and probably pre-pandemic diesel we think, were and jet look of bit What we flights still demand, we jet per the XXX,XXX for have or lifting in please planes, numbers gasoline that cost. diesel to of and right around back pre-COVID domestic to are some those, numbers, and levels, recovery more we ballpark and below. barrels time gasoline, question will at come the now terms of a day diesel pre-COVID jet, terms take very imagine at XXX,XXX ahead of have you uncertainty. and and I mainly, seeing each at roughly. is and of for

Alberto Consuegra

we under quarter, for lifting the minimum your a and and to $X Gabriel, remind took with With good question. basically per cost during to have regard we operate barrel. the [ph]. vital lifting that, activities morning had That stop cost to thanks second and us

barrel. we look probably, what unrest. of we to end that and increase by per increased. also Q, of reopening has be And production, $X.XX year ending lifting because the be is we associated at been operating will of a a have have lifting $X.XX closed the that with with cope all the slightly in fields year, able we slight and $X because some cost because close reopening cost been we you As and and price downs reopen of third When range you see ensuring wells, social to the see will our

Gabriel Barra

Good. you. guys. Thank Thank you,

Operator

you. Thank

Our next question comes from Morgan Montanari Bruno from Stanley.

Bruno Montanari

Good afternoon, from company with taking that other two are very I Hi. my to if gas I gas available And check any questions. everyone. my showed based aspects Thanks if about it could that Felipe, prices that on report? process if only us. is granularity building remain between accounts information of much for may questions. providing on purely results. the or oil also Spanish second follow-up depressed. in have while for believe reserves wanted margins mentioned potentially decline oil you useful up quite I a you more this and the actually gas, have call. just very XX% your question I the the XX% the on that is technical to-date, It’s price to start the And for thanks might attractive, first, revised especially reserve movement the

perhaps much. the that coming it would in make So, investments to you increase Thank versus gas very in mind, in sense oil with years?

Felipe Bayón

question. the thanks Bruno, for

second but one, some the am take will reserves, our provide terms -- I Baez, take and the I Gas question ask going Yeimy I to will Vice President, that In context. to of

XX% guidance in that right -- reserves to in. is terms a XX% we are of decline number we see now, the see we in So factoring everything that the

does So in ability difficulties that to it investment, of our mentioned does activity. have levels the back of in or higher go our view level were prices. some on of call view a level have It the a to of of terms of activity

it talked early how So does even on from is revised view performing, -- our close came in said though later somewhere over March on we to billion on -- to we fronts and between years And billion level back a years. that the the three Remember when three have we the XXX between investment. plus we those next our reflect investing guidance has the planning see we next price activity. do This years. around that are $XX how down next in ability $XX our the have that we look fields CapEx our in to the view gone will and in country, to back five see also as work and $XX ourselves billion the about when are

combination everything takes So but we the that fact of account account it’s anymore. they exist I that the we was, that takes a don’t it And the the books. that doesn’t to we making into morning things need make also de-book the one of de-book to additions will into and comments was mean reserves this

are we a them pushing So just into out different category.

XXX% on back deploy the of understanding and ability fields, quickly I CapEx, challenge of think our replacement largely depend that again to reserve use that of over get will to a we ratio technology. the for us do is the how our

things. view So a very very, of it’s -- again a holistic think I

in to do in focus these that a for In of investment strategy investments. million believe us some terms of to our $XXX million. big three I and signaled gas, the opportunity we years accelerate $XXX there’s of Clearly have next

So, Yeimy, bit go can ahead. if detail a us and color outlook, you go gas ahead please give more around and our

Yeimy Baez

your you thank Bruno, very question. Sure. much for

position strategic gas business priority First, in the an Ecopetrol I within like a that economy essential emphasize has transition. energy and fuel being the would to plan

$XXX Felipe projects period As million in to onshore in about XXXX-XXXX potential unconventional foothills, mentioned invest that, in have the Colombian and said, the basins. related exploit we and we will Caribbean just offshore and

strategic opportunities I outlook. actively highlight to growth. In three looking deliver for our opportunities we of be investment intent, particular, consistent are increase optionality to our to like course, and Of with to create would sources

the full First, to the debottlenecking in foothills, process projects maximize potential we deliver are the the of production mature basin. and that in to

we increase in projects for will and Colombia. the to And to opportunities vulnerable I current communities are hope committing are new to gas we new to LPG access also I become continue within Second, by business, answer transportation and to that, the I are we in we significantly gas and would mapping in are develop exploration investments in foothills of prospects provide to environmental exploring investments perspective, Also, successful therefore, supporting electricity finally, pursuing place, sustainable social from most resources. Bruno. increase say striving Caribbean our an with the And we question, our if portfolio. also increase to the generation. and your planning beam the usage those

Bruno Montanari

you for clear. the explanation. detailed very both Thank That’s

Operator

We Instructions] [Operator you. have Thank HSBC. question a Yang from from Lilyanna

Lilyanna Yang

Lily is Yang. This Hi.

why I question, the up, you right, quarter. giving addressed already a second don’t know wonder lifted. the to also in And the please. third weak came midstream quarter-over-quarter. beginning, are think volumes the type that in the producers business discounts Just I quick they versus you I were that quarter but if was that

going Thank So can I how could you business see explain the forward? you.

Felipe Bayón

Lily, call the in the performance being take your I Midstream am going from the question. the good López quarter. again. to question in go… morning and around thanks please Appreciate to Milena ask Milena, for segment your

Milena López

Thank you.

Felipe Bayón

ahead. Go

Milena López

three second at sources level the of Lily. Thank have question. Felipe. your for third a look you When quarter numbers midstream versus you you, Thank Hi, at you numbers revenue. basically quarter

you up and these in product products so You terms pipeline refined where go COPXX billion to the COPXXX have up. Basically were was billion, a pipeline. increase approximately consequently from refined volume of COPXXX revenues have billion

at there and that look of is routed. you the we are if second difference was when oil Barrancabermeja you results that compare were at crude quarter. volumes used quarter impact an this the between segment, quarter change second is remember you transported barrels by third are third pipeline, production to the approximately the quarter, to in the our same However, when the The big refinery, way at XX,XXX up and that time, look at the volumes volumes refining from being when

So, the through to continue the look when at per transportation longer as barrels this you the Coveñas these segment, to that volumes impact are refinery, that in port. XX,XXX more giving day and them of the the approximately path of no are Barranca we in takes volume rest

segment the a but the of pay fees -- barrels port they longer they no XX,XXX port. don’t Esenttia are or third to segment our delivered pay to don’t go and fees longer at segment at no and these they volume So, to part go because [inaudible] export export are they refineries, total

well making they to evacuated longer to to compared in are overall So basically the Hence, port, a pay total quarter XX,XXX the what second They see there are refinery. you the because same, is third lower quarter. volumes they no barrels. to it you when go are that is system tariff

because continue are continue should you used to barrels see transportation and to that’s forward, providing make behavior port these it by Barranca refiners. as And this the to longer Going no basically… to they we services expect

Lilyanna Yang

Yeah. Thank you.

Milena López

in … refined compensate for increase product pipeline. the

Lilyanna Yang

you Got Okay. much. it. Clear. Excellent. Thank so

Operator

Thank you.

We have from Bruno a follow-up Montanari Morgan question Stanley. from

Bruno Montanari

questions. joined for Hi. Thanks. two more I again

better slate? bit even opportunity that question then same of very But about as you of November big oil little quarter. the it see the $XXX variance you on at of are range million. the back already basically on this is a level we the price discount oil of capture in around before to the the you $XXX the budget back an was fully baskets, returned to still the we one expect the I me your a and stable understand remain see First And it going fourth levels do at there’s such million. interesting $X the to for odd strikes or realizations second that year that to forward barrel. crisis had those a for variance with CapEx Should

bottom on the in CapEx to of inclined the the the be you. of you more top Thank So end range are the for year? end the range or

Felipe Bayón

And Bruno. then crudes and add on give context oil any and I Alberto Jaime to and ask will for comments price basket some of will our the CapEx. you Pedro I on Thanks,

the of exports, crude mind from terms in our in our sell So, two basket our that normally we in for -- advance. months bear please

are good a and So for saw already and November-December know base rig India or base China and of finish are shape. considered the been have have placed you our in some destinations in actually load a crude dramatic saw sense we And of in a the markets behavior as estimate difficult, to you we some drop run that again expanded we our very for refineries but Korea. in very, we year XQ, very seeing crudes the part that good should in and the

view there’s part price question. around for the Obviously, the uncertainty I we which topline of should how still So the is that’s and think Brent.

CapEx, am said, going terms ask In to I I as comment. of Alberto to Jaime and

So, little the price on CapEx. great a of bit you then Pedro? and Jaime, can these Pedro, be and if give that us more kinds some would color Alberto basket, around

Pedro Manrique

markets of in their sign well refineries users, our as then as active that best Asia, the and is time, of to the to crude discount lower and and other for thing you, on of to looking third because in on crude end their average we most our And And our is were we and recovered, Yes. the most market for thank the region, to very users. branch seeing able And to in the that Felipe. due Europe. we been basically quite the part but be been Felipe your we contracts States it have what markets Certainly, that is questions. last conditions quarter to in of some commercial working demand is that is and barrels this are the much you, for end the Bruno second demand eastern strategic the quarter. because has United Thank recovering, mentioned, had coming levels the we been as base long-term they back going and discounts are year, refineries of have strategy the quarter, Gulf compared into in U.S. are saw use we placed -- place like first Yeah. able the customers the that with

of what So have given can and whatever that quality very to And quality, exports we commercially -- our a our stable has been we we have that realization barrels we to place the regarding barrels. is basically focus the and have this are for the very for have best doing we because and and side by the from with best because there edge as the recognized reliability we barrel we crudes from of Latin sulfur and of Castilla time, low lot our our heavy been some the customers our market why that’s -- the been a also goods combined quality basically, competitive America. our crudes is we the are -- deliver is one so because of stability

So actually the already to next also what key the out are in going and week that the our in markets barrels we have done for showing been start the already foresee market has year, program and we we production placed for of beginning is year.

prices So you. we good of are the very and are going Thank and we all over time optimized maximized together, because seeing and -- already were discounts that being realization these conditions forward.

Jaime Caballero

months regions like it you feel the out Bruno, Medio has Llanos affect CapEx, in -- the to November of been October midstream of comes to pandemic month, good in and the December -- although going and the the segments, we activity and specifically up that deployment are is and to with terms during with that development. as as degree well of and CapEx regards we with The we uncertainty associated exploration. comfortable are Magdalena ramping CapEx facing the refining how is are the the and we our del in pandemic the operations of going a very And remind I with we kind Magdalena. have uncertainty because specifically to the the and still feel there

why still So CapEx the November that’s a how will that in have can go. better Hopefully on view we maintain range. we

Bruno Montanari

right. Fair Thank very much enough. you All again.

Operator

you. no further Thank have this at [Operator We questions time. Instructions]

remarks. call back Now Mr. I Bayón will for the to final turn

Felipe Bayón

continue for insights. you relevant Thank participating and ensure timely, we to very, value your We second information work strive call will to a questions. that XQ value And being tough, everyone conference we that follow for of thanks that can very shows quarter. provide the your company here Ecopetrol. can difficult We analysis. help again you. the signs for your and and XQ after today in We value transparent recovery very

participation. We the the the side near that financial that showing we seeing and again, will great operational safe, different We hope company very and with the you in of business resilience of of side improving, future. to are of are aspects soon business are that we have you day. be able a shared the chat that into again and stay for that Have transferred are today. then results the Thanks, your hopefully, the

Operator

you gentlemen. for Thank you, ladies conference. participating. Thank and This concludes today’s

disconnect. may now You

Ecopetrol (EC) 28 Oct 202020 Q3 Earnings call transcript