EC - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Sylvia 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 First Quarter 2021. 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

conditions of to than the ability These Call. morning, was pleased last Operating cycles. you will and COP of EBITDA to integrated the to first continue of and affect welcome strong Chief XXXX, XXXX set Ecopetrol was year the income levels. After results market later. more Quarter in with our and and beginning. since of our I for of which Group, achieved times year our production The results to an Good we strength business COP first full the demonstrate X.X even employees the am under generate Conference the continuity net of to year. Results on began, trillion. were and a XX This with COP share operating results trillion, since this quarter throughout Consuegra, our the everyone, XXXX outstanding a midst value First margin the net XX the months the will and the well-being the X.X years, its COVID-XX operate the Alberto The operations celebrating net financial very generated year our us the a EBITDA the ensuring for Ecopetrol XX% and X.X Officer, that revenue and our top half is of XX.X challenging very biosafety quarter Group of expand for EBITDA for year, priority. figures while income our of quarter of with pandemic first consolidated income continue for best provide as strict protocols trillion financial Ecopetrol a EBITDA of the conditions an

ratifying and trillion, transaction. difficult highlight to diligence continue per X.X a a a of Board and fully crisis to ability valuation began in the approved Directors for Ecopetrol established of them process As of gas want highlight production assess realization price COP relevant following, the the of in even we special successful and safe manner. to virtual crude increase the the of price achieving of matters, XX a compared In where XX% to for export evidencing that to positive potential digits, our learn of milestones XXXX generate first acquisition conditions. details second, Meeting basket integrated for in net quarter of of zero margin an an of the the the refineries second strategy double due ISA time, agile, to the quarter, profits overcome per the with compared quarter other XX% was from equivalent to our committee to comment. I commercial further the by we will a General the strategy, the of I as dividend performance We On targets announcement the barrel of our work whose setting very share Ecopetrol strengthening our fourth, successful XXXX, first our carbon mentions XXXX, advance and third, in and efficient the Shareholders of to first, for the the Group, with COP

risk some results we still presented today are right the are constantly track. proved there are moving monitored, the in that Although

the in a According commit XX% in seeking seeks change. area oil to represents climate of X Ecopetrol and emission by COX in to X and by year scopes the company X on million slide. to net less to committed equivalent commitment compared transition tons million Latin times TESG the XXXX, like to first on This restoration move Paris is mitigate of plan Ecopetrol next and a sustainable Let's emissions X in X the reduction by advance emissions We development XX the both ratifying an reduce our its XXXX energy agenda. by Bogotá to Colombia. for X, Agreement. Thus, became our XXXX carbon zero and America gas to the with baseline. to scope our and equivalent COX goals target between the of city size XXXX, to decarbonization and

alternatives. This Mature plan and as well important solutions a emissions climate pillar The testing will agenda, well be standards. to technologies roadmap XXXX highest operations $XXX available initiatives and in of term, essential million In XXXX as targets. criteria, fuels currently and of might always complemented implemented the and in energy that will methane investments XXXX, total strict of are our XXXX when included plan, seeks we capital in efficiency, and the be medium and as the already energy will through as mainly use its have long we to addition, that by as It as corporate that under Ecopetrol natural well scopes of XXXX, the in were of on sequestration hydrogen, quality emerging than the maturation more considered reduce value respectively, energy setting decarbonization the emphasize we storage energy in for portfolio capture ensuring short strategy. focus initiatives XXXX, and reduction the is renewable technologies flaring business and develop energy of compared batteries, to our included that the geothermal to both of XX% solar, by and In X, carbon fund wind others. emissions and to reduction By routine baseline. each and competitiveness projects projects, projects, and amongst is generation projects. X under XXXX technologies discipline evaluated efficiency short term this include these X potential

move roadmap. Let's to The just the next defined slide. of on decarbonization part our pillars agenda transition four the the energy mentioned in

resulted efficient gas In competitiveness and from efforts continue core and make During of the and progress forward on to the first our our oil the business made main which operation, in of business, all some COP focus quarter of EBITDA margin in in efficiencies. XXXX, focused put achieve we pillar, and the them. a strengthening billion more derived CapEx efficiencies to actions strategies XXX we

unique agenda, a fields. potential production. thanks diversification the initiative. we've we the determine in benefits stake a dedicated sector stable green created digital $XX income, growth been contribute to continue such will and some started the and In progress the with of potential a investments in hydrogen this pillar, process acquisition to ISA, the transmission Colombia hydrogen in within that million predictable Additionally, of margin carry to of due as alternatives Latin in projects of tool, process countries. a solid the human to management controlling and Ecopetrol advance diligence the refining energy company Group to Likewise, sources American out in the integrated digital in talent, for the of captured gross force We profitable positioning task a in has and research support

in start farm, continue operations is Fernando San in the second the year. this Solar construction to expected which We advance to of half of the

in Board flaring recommendations of the appointment a report, of to Accounting World forum we to incorporation of routine Vélez Board, want the governance of I newest report Also, and well transparent Cecilia stakeholder sustainability to and of our for the in a metrics the mention operations Finally, the in ISA commitment the a management pillar, integrated full Standards line XXXX the SASB, the our highlight following: the, In as Sustainability our with Economic in as begun information, stand-alone sustainable capitalization Ecopetrol. climate-related of and special have of want Force I in establishment the as who transaction. turn Disclosures, quarter. will want the I TESG explain member María a reduction I to the White operating valuation disclosure of of gas will our In the integrated with our Alberto management of and Task a committee strong TCFD, XX-F now on corporate sustainable main Climate-related XX% for Financial report. XXXX. our the along the results the highlight Directors Consuegra, between in report, floor to standards,

Alberto Consuegra

levels. trend In of towards results to you, your recovery continued of in pre-pandemic activities Thank first quarter the show line operational Felipe. most the positive remarks, in the the a with

of exploratory X the off El of and in wells the XXXX, XXXX. drilled in X, Niño exploration, Regarding kicked success the two with Flamencos campaign

In the we the reach and due and technical continue Mato sealed YW-XX in progress of Sur-X geological phase phase. problems part well the dry Salt. Brazilian discovery SN-X the deliverables quarter, other plan The since South-X to of Brazil, completed was Gulf for well in of Pre viability defining the make this Gato allowed of blocks and Boranda During the evaluation Mexico the ESTR development commercial the Boranda five wells did The knowledge LIRIA further to as the the we and are Moyote-X was abandoned of studies declared the in well wells, geology. drilling hole. in do it not the the target

compared reached of of X,XXX year. day, representing the XX% of oil the registered same equivalent production to an the average period an activity exploration in increase the volume Finally, per volume of from barrels previous

move please. next Let's slide, on the to

the barrels in same During good the production and to quarter months XXXX. In stand year, mid-Magdalena X.X% assets year, oil to and the Group's out. oil fourth Piedemonte period XXX,XXX Compared day. the Ecopetrol production assets the equivalent first of results quarter, compared in the the of three per gas first X.X% of of the was the decreased previous

and period, this issues. the production and heavy the basic divestments was a public Peru as during Castilla operational However, in of restrictions due BSW, increasing in consequence to water, order oilfields XXXX, in deceleration and sediment during affected field, activity operational

Given range the which resume of to maintain first upstream in X year in that was volumes, production the volumes lower we XXXX. between plan these the the quarter generated XXX,XXX aims COP for announced estimate total the growth and trillion, EBITDA per towards XXX,XXX goal the XXXX. is impacts, XX% the for of production production a the Despite equivalent path and segment day, for we EBITDA oil

EBITDA segment the doubling previous an reached Additionally, margin year's the result. XX%, of

production LPG to compared Gas and the Chevron's to XX% to of asset the and a the the increase higher of Let's hydrogen contributed production acquisition the Permian business a next Gas the the same quarter. of the progress initiatives. of had year, had participation previous of the about strong and the Guajira gas XX% and the EBITDA production this quarter, of about from by in In slide Piedemonte, upstream Hocol. results margin EBITDA segment. talk LPG mainly and derived go the the during combined XX% group's due to of gas a period production XX% business LPG corresponded to and of the

with level XXXX Q XXX%, by to close closed sector. first industrial The of led third-party of the recovery the mainly total demand

works Regarding seven the start testing in as the Hocol in Merecumbé-X in gas progress Porquero limitation more of Also, the and three of the pre-rig maturation the testing making of field. made Arrecife-X portfolio, Hocol In our the was development of wells progress in is the Piedemonte, extensive second new of progressing discovery wells. with Bullerengue of Q. is extensive

maps. aim during at Regarding the operational in dioxide metric design phase the of the works Gorgon-X work phase the and and of appraisal we of carbon and five the equivalent policy, and block XQ COLX on segments, regulation planned XX,XXX the maturation the pilots, the to achieved our XX quarter, LIRIA together Cupiagua and that, suppliers Also along drilling well first with the as and tons moving with partner exploratory a based of hydrogen the should well Shell, reduction initiatives the noted commercialization XXXX. XD well. fronts, strategy moved pre-rig was be We're phase. limitation part forward synergies thanks a completion of are It exploration, road our in development analyze, groups of at and for YW-XX during third-party of public of the country's the between

the Let's to progress non-conventional. talk the about slide go next to in

we Colombia, Kalé the to On activities unconventional on pilot from in - related project. reserves made progress our

quarter. And ANH, Wilches, National this in we monitoring we assessment, to end for Agency, of environmental out and the first During started filing filed EIA. territorial for of carried Ministry issuance in third Hydrocarbons of which the the the months of environmental quarter, eight the for expected the after Energy the dialogue and by is work the estimated EIA, license time led acronym Puerto the Spanish. its the impact Mines by baseline The is be

X,XXX on barrels drilled quarter. the wells XX of XX day, Permian at achieved partner, XX efficiencies the of after our United activities completed Regarding States, was operation equivalent Rodeo year. wells The Oxy, end joint the were at Net on during production per Basin, some the beginning despite wells, in the Ecopetrol effects production the to with the the of Therefore, the of XX the winter same including in almost royalties our venture of materialization completed not wells results the the XXXX. strong oil and for production XXXX. reflect due

of a to peak by be net royalties the is Ecopetrol day equivalent of to of XXXX, oil barrels the achieved XX,XXX year. per For expected approximately after end production

The volume recovery. due Next a of products refined slide, to please. increased transported demand

of the crude Bicentenario However, of this reversal like to volume the consecutive period, of in oil since completed. operating were which first production the country. to pipeline transition would transported used. a quarter result model new contingent X, lower the XXXX no XX the not the of of to in In the levels completing the months as alternative was compared cycles is segment conducted, decreased total highlight I February that

as and the of As Group's leader Ecopetrol its for is operation segment. systems transportation a transportation result of responsible hydrocarbon position now consolidates CENIT solely the its

results oil issued in aligned superior case. spending, of be CENIT, which On other Cundinamarca agreement last this hand, General's favorable between March will trend be concept To a instance levels of administrative The on Frontera. will XX, crude Office the production date, the country. with Attorney of and the in of the the the transported Bicentenario the quality the volumes approval

The of by the our price. Let's compared evidence results with good standing despite due segment's please margin gasoline recovery, downstream levels the to move strengthening supported integrated by on to sales out more diesel the of stand and of recovery diet the results next demand were to The during slide. out. gross refineries incremental expensive a which segment explained XXXX, trend product Brent the presented basket mainly the of

at Barrancabermeja last of and despite during achieved thanks five light higher strong segment quarters, and The is availability to substantial the first increasing of the to of plants. the and contribution quarter keeping businesses. the margins and of a yields, the for the thanks of the throughputs costs best control expenses operations higher EBITDA to downstream our result The due to consecutive petrochemical business EBITDA supply efficiencies had refinery the under the XXXX, crude aimed

year. will During of the third started the we quarter, cycle first also which the maintenance refineries of our last quarter this successfully until

control per barrel increased by of the first per efficiency. demonstrating lower to was dilution of same the reflect in and production versus the purchase interventions levels price. Let's and develop the year, by to execution was responds services increase of the versus under the decrease higher unit the quarter cost and total showing Ecopetrol lower and quarter. per to transported move on explained and and will of heavy by Brent adjustment to savings mainly integrity cost the which drivers where commitment oil. same quarter quarter and operational Then rate the of expenses the costs XXXX, by of the the the the through for and due XXXX, the this the premise reduction to quarter and of matrix versus XXXX Caballero, for activities period results maintaining XXXX, to barrel, per slightly first lower decrease of by The X% the to in imports $X.XX lifting a the expenses of a mainly of cost costs lower the Total was barrel partially optimization the processes. X% compared lower the the per for the of X% unitary operating quarter previous in The the purchases than segment the period next offset Jaime first previous the cash operational cost new decrease about operating the self-generated first I volumes of a talk compared X.X% main to use slide, the an the of sustainable period of barrel, transported. year, will NAFTA exchange activity production again, and the mainly $XX.X $X explained explained by component downstream efficiencies due pass cost higher The financial energy of in the same the to barrels explained The energy increase decreased during of presented barrel Group. well $X.XX floor of the that who of efficiency please. the time

Jaime Caballero

quarter the operational X.X income net recovery increased effect of note out valuation quarters. expenses the financial trillion indicators. impairment This turn efficiencies the made derived year continues model. a the a the explained The the the positive the thanks, expenses explained. resulting factors, was a environment. net lower to mainly quarter increase barrel, COP incremental It by leverage in mainly by during the the prepayment of COP the throughput. and inventory XXXX same highlight the decrease of improvement associated depreciation, during line showed of be include prices is Brent income lower recovery The term for expense. fourth, as of substantial and and higher one such the market breakeven trillion; net in next improve debt carried which result of during given a Other X.X year. expense impact of market is improved best a impact impact of COP the services no a in mainly compared country's throughout highlight lower to FX end in The plan COP in were others FX crisis and for of with the to per financial with sixth, previous the $XX.X in and marked an compared conditions, to It and liability to XX proximity benefit of activities higher primarily ability the and and had smaller short target is the compared Ecopetrol points and position and provision on and reflects of inventory items company trillion, quarter in with see production, operational these increase of by COP in higher was realized in improved COP XX.X%, trillion. the of the and executed interment of a In differentials captures operating the close Many explained the effect income end. the third, billion COP of the Please increase of higher the personnel includes quarter result from of considerable EBITDA stood labor billion, costs includes until the COP expected additional the XXX previously capture XQ taxes, increase fifth, quarterly net income Net plan. during of to retirement operational higher of fourth no three and company's group's expense X.X XXX voluntary products, in of Mexico sector, profit incurred better of average comparable continues and is a trillion results, which net to non-recurring leverage at basket by COP margin X.X X.X volumetric COP COP cost The adjusting of production. a to leverage oil first full prices of quarter positive of the indicator from COP performance this net the only latter explained decrease the the primarily negative would These sale to main first X.X new profit X.X an the dry Moyote of lower margin cost a historical as first, X.X business. important COP is X.X XXXX, well recognition event, expenses COP the in for be from activity. slide Savia to following EBITDA higher billion, recognitions effect integrated the to improved during remainder the of tax the period, the important third COP business tax a billion interventions result lastly, group's this lowest in billion, disruptive rate is realized and it's of explained Relative improvement the business be the adjustments mainly trillion, barrel, due the compared market that the and The explained scenarios, year, costs nonrecurring the per the XXXX. dollars, XXXX of in Alberto. ratios others profit of main non-operational to for of transportation the trillion to and carried could due in for EBITDA of in out crude a in February, stands that companies of end EBITDA level challenging with factors: to rate X.X of of and by increase Likewise, trillion XX in efficiencies, as refinery exploration factors of company's X.X the exchange EBITDA established at of quarter year-end the Peru. XXXX, COP XXX the trillion purchases with higher to XXXX effects income a of the and greater that of a nearing trillion, income activity related thanks to X.X COP prices, variation about lower second, a quarter bearing exchange trillion, valuations and of result rescheduling trillion. of When

in indicators, with has of other fourth slide the point from main figures. ROACE, next the line lowest XXXX. recovered to its Finally, observing the quarter review turn to investment Please

was the the During comparing the extraordinary the adjusting quarter on reduction were Colombia. of was turn the environment. project, of effects, flow. the closed investment slide explained the effect accounts focus $XXX The million and pandemic fourth the noted by at Please announced as such that year, for XX% to associated income well of FEPC, upstream's between reserves. to for and goals of with of cash at trillion. to were execution of year operational the a range of the It the when the nearly should and COP balances. in next the mostly the of on positive trillion. actually Fund, reduction allocated $X of Price CapEx about first represents production for without receivables period total good do tax to mainly and COP activity despite in COP relation a quarter and That first from decrease without challenging This is This for quarter trillion confirms quarter outflows within plan. against in X.X Fuel the first with the growth billion upstream. the focus and billion Separately, invested X.X When nearly as period of the quarter be to an the shows operating accordance observed XX%. as the of XX% with pace COP for of estimates increasing higher in effects activities with of same Stabilization quarter's year XXXX. trillion, slightly $X.X the investment cash XXXX, compared opportunities of execution in remains the acquisition Mato a X.X first The compared Gato the of stands X.X increased line balance flow COP XXXX is the level review to receivables trillion a COP item booked X.X commercial X.X with trillion This the as cash with XXXX.

As COP X.X X.X outflow allocated service of for financing a COP component, to subsidiaries. of which trillion trillion, trillion X.X COP were to dividend was midstream to the and minority correspond there of debt shareholders total payments

X.X mainly operating the from totality the that Finally, COP pesos. and of to the to on and compared the portfolio factors COP inflow of of is an second stands at decreasing income. equivalents flow COP to investments. financial cash the paid when Of during observed the first due with $X.X XXXX same of April Free COP associated X.X in X.X same that total and recovering Ecopetrol was XX% of trillion, year worth other liquidity, what XX% term is and dividends shareholders denominated flow. trillion items, composed the in balance for cash half dollars quarter impacted It mentioning X.X final from The and of is of trillion trillion XX short cash trillion. long

Now the over closing remarks. I to hand CEO for

Felipe Bayón

acquisition. life disclosure and transmission safety best continues the and ISA would our conclude, alternative of energy We've like of the energy Jaime. the the in to practices of reiterate as The into sustainability stakeholders. and we be advancements deliver our targets, through transition, announcement our to progress such solid I to of climate-related you, regarding strong sector decarbonization that the of results Thank made entry employees the are To our shareholders adoption pleased to the our and information for top the priority.

preventive approach under continue will operate to We high standards. and biosafety

billion of the XX and health. path being resources economic both in Apoyo boost towards will development, with very investments open the of agenda, support will thank in the Again, the reactivation, year, we rest sports development, and much infrastructure, our foundations transition competitiveness, the the continue today goal XXXX, I pandemic continue COP in País the of at part to to our production the infrastructure Q&A session. program, laying in plan. the least business established line Likewise, in objective deepening this, to Ecopetrol and business TESG this permanent group and increasing With addition reserves, of XXXX-XXXX the during work social rural call. to for restoring in conference growth energy As allocate the community, you of education, face road and our

Operator

And from Thank Instructions] our question de Rezende from you. Ricardo [Operator first comes JPMorgan.

Ricardo de Rezende

question. and Jaime, Hi. my A thanks taking for afternoon, side. Alberto. questions my Felipe Good couple on

a call that is something in discussed on the Spanish. The you first on follow-up one conference

So cash help the Castilla. than had flow the ISA change were the lot expecting at then the Would transaction? And should what the transaction? looking at that equity funding be a for second all does you would with cash and reduce issuance debt transaction of that How transaction? funding issuance And to of use you you $XX. choose, thing if to Brent you stronger on on is the excess the on the or production part the that

you a in in could total we question doing guidance new that - that be that Just some May, Castilla conference also works for you production, important region. could mentioned be Spanish it's - the year, very had on you're delays was a look your the at that call when month to the the on there

impact be you. for the could a Thank delay So could to that May if from example, for see, June, production that year? how how your relevant we

Felipe Bayón

being thanks about English been call. before context that is first in Spanish in for to the in think the for we're today, want results are we to I in the thing appreciate following on COVID-XX And call. the to and and the year that the still highlight I And conference middle of has very fully circumstances. think XQ good pandemic. you're reported, Ricardo. here I as And some Good the Really detail One, go into for out these Ecopetrol I and appreciate the questions, the two of everyone Ecopetrol. want not crisis and morning, provide things. trying both

protest following been occupation that, days been for at country We ICU immersed eight numbers. sure, very, the some I'm or us have in with levels addition to currently with the And social in third very as last wave has the difficulties. you've in high week, the Colombia

government, with gasoline can, well as working as food, the we're the supplies, a fuels the Energy, provide to and it require and So country, across in Mines the that diesel with we the people medical supply the Ministry country. medicine that and of as the ensuring and the

want year, to I acknowledge want all just level So since been to that working thing I it there. employees the of the group is second at since last our start have all we our in systems transportation of supporting and work the at to operations ports at terms went being for our everywhere. at products, our refineries, being fields, our at crudes remotely, both of And

which So raising know big, kudos Ricardo. it, you big big to been it's thank and one in a you. ISA, and terms I the of And them of questions,

negotiating couple thing a mention mentioned terms that to track. are diligence in potential due contract on the announced is the in previously, things. process, of the acquisition want terms in these are I've described ISA And we've potential transaction both Just both doing of first we terms potential - controlling And that that as we've stake of before. the January, of and that activities we're doing both in a and a

on and publicly are that's And call, companies, that think finished. share I processes cannot details I both and ISA listed and you everyone such will the thing. you as Ecopetrol the we until since Ricardo, know, So understand are first

very that's important think I that I there. put So to want just a point out

different funding that terms acquisition, of assess I In the sources. can to of of sources confirm continues the company

that regulations both both or comment relevant to potential debt, sources, look made and different is the Mix have all sources will of equity. not and We trade structure, shares. market will such applicable sources will channels. in of applicable available or be not thing are cash we around the continuing Information and our be on I where we transaction, specifics the position. for those you'll of And with terms and different defined on yet as markets fronts that potential transaction funding understand as to - and of the the these are that of through you of markets information our in to to of transaction one any issuance, we at the other terms cash our to the final in conditions the on the depend largely have comply those sources, need the timings equity conditions, able that

just take are I with to terms you where ISA. that, share with we and our the to I want the in question of around So of And on some upfront views wanted of information. process sharing

go and provide think had issues, call right detail. saying and resolving news. track Castilla. you think issues provide to I Spanish, of of a Alberto, we're some ask we was which if I'll And on I bit those bit Castilla, can will I to I this good in in And in that Alberto ahead Alberto - we've in it's our ahead, terms please. moving the terms more with ask a In mentioned detail, more

Alberto Consuegra

Ricardo. Felipe, Good Thanks, morning.

we month So will Castilla, shortly, with reactivation the through authority. what situation of we're of during May. in evaluation understand the the is issued currently environmental this be the going And permit probably

have saying in way So production the reducing against reducing benefit in in the impact we terms will about we situation of if of X,XXX Castilla, see terms current the that what we gap gap, the X,XXX estimated so day per current in level. of or production sort barrels terms we far to another see

Operator

from Our next from Carvalho question UBS. comes Luiz

Luiz Carvalho

be I'd of Colombia, Thanks to touch to to, points. three perspective. if to a kind Hi. And back let's fiscal conditions the question. challenging allow for the seems in from it macro in say, taking one me like you a this come

increase think the don't order potential, to selling, also, X% shareholder the is know, the that know, say, taxes? of the decision general framework, first how even don't specifically Congress. any the management taxation do how any terms in dividends, to you industry of And already potential don't the or either foresees or trying know, to I'm question you'd try approved Ecopetrol stake either So I the potential shape new a from is, I understand royalties impact - by for, potentially, in controlling to for that I or to oil example,

management just So under these and them trying to each discussion. the understand sees a of options if or bit them better one are of how

The know, right now, sense that can the negative seen a is very just one company. and can fracking - the to any looking second management any you And if a know, of in company back analyzing but the minority mean, forward? concerned a potential, of potential, say [Technical coming this understand to questions Thank the to or previous how couple you already on quickly is as be on in get the potential don't question how about table option to do Difficulty] terms update dilutive last shareholders due trying ISA, I provide the I you independent of are I the don't I Colombia about, is on options the you. that benefit might

Felipe Bayón

Luiz, and being us with again, for today. you, thanks Thank

the I presentation over refinery of we're In terms highlighting like things the we've done. some loads of think that sales overall in the situation our and Colombia, and

at look levels, and at gasoline you they are pre-pandemic If diesel, mainly.

of pre-pandemic I is of a good think where the economy So how a It's I it's with attraction level. and good we And think JET, a the thermometer that's going. very of are reflection. are at or proxy we sign

that's think number I one. point So

there the that overall think consensus think, levels, And our a at, of fronts if the In I you progress you the underlying recovery work I has terms recovery. look our of and economy. is been the results that investment made. see show we've activity levels, And of

I'd like the think And I'd that's to first to like share. So I thing see.

that we we but there this vaccines. significant during out sense, I say are at continue there's I of all-time levels third Vaccination COVID. opening So high. wave. We're that have in a number still progress, and in around my at an to cautiously I'd think would Q&A uncertainty to like remarks optimistic, the clearly, ICU are programs put that received

that if our prices view, more could approved thing our dividend Luiz, think policy was issues in it's what the from between more with point decision dividends. at terms to the share translate results us is in But Alberto that and March year. of as final of of at imply production, be some think Ecopetrol we're taken look progressing around and could our terms or and eventually the other that. an royalties, next contribution with that AGM and into will XX% I outlook could income, of And that be solving there taxes So net contribution of mentioning of is that distributing in XX% of you overall I our the is more there important would

as mentioning, that chamber. project and reform withdrawn taking that's is thing previous sure the that tax framework, I'm the taxation but from of a Senate following you're a you're the terms In and which the is other the formality from but And changes And that process no news, has was Finance. withdrawn, been today, including there's project announced there's that. actually has the place as level, you government government I team the saw think support of the initially Ministry the economic conceived at to been for the was that

to a wait presented and of potential So presented what light we impact. in be to is provide I'll what's would of need assessment say new for an that project

to other the you're have on I I I So things say touched think, that's, the that I've all about taxation think framework. And mentioning.

just just be go to was what ISA, back of to will I want clear. very terms I In I saying.

the that in has of project. three, other several earlier de our on taking several will Investigación funding include four, could mix at sources I I talking that terms of Piloto optionality, will options include will the And could point depend is things defined. - terms this that the or would are think we're number earlier. on update terms into of looking was pilot Point account. depend about depend one. we're sources number talking debt, that the And about of I equity. during and you asking final been that could saying Proyectos cash was sources not number fracking In it That's actual it will was were include be Colombia. the thing our of So those or number potential two in point transaction. Point about I you [Technical And an Difficulty] the presentation, on Integral, or And market there's conditions. mentioning And

in an our will the environmental lieu pursuing, in that or inform We assessment of of all submission environmental or underpin support or the in sorry, license. the have continued area conditions with

Spanish we're is the inside not variables. it stakeholders. just it like and of to inside, is We've in we'll about In reemphasize about Colombia, doing said we're we in continue what fast. we measuring, There terms mentioned or than pool. actually fish to different it measuring that before, doing, We've like this doing operating and Language] Everybody that. fracking things I've more also in that of that quickly well. and say, to be with And doing So that it do progress transparently [Foreign we're we've mentioned, the different I'd terms It's continue this would would that. openly, said XXX looking

your the process. So If in questions. of we the please? so for next much Luiz, terms we're take you thank progressing can one,

Operator

The next America. question comes from Frank Bank of from McGann

Frank McGann

you. morning. Good Thank

based a to comments your yes, the just things - comments well your - follow-up couple as some the as release. on in on previous Just of

river. environmental to Just the not what problem issues related related it's - the there, exactly to the Castilla the field issues and to as not clear I'm or is

a for for you production also that the could been might ‘XX. by the - the with in Quifa on you water you May. might plan main overcome and areas then I provide the looking and some said mention about explain perhaps what there's the rest planned of have that some on And And increase risks - to be that you injection at XXXX? be? If restrictions what should, that effects be towards activities anticipate about the that and concerns you little and how details are think, release could ‘XX whatever that doing in increasing wondering just - ‘XX. then lastly, CapEx problem bit the you're you - bring was into what to mentioned actually specific I'm and for what issues And to mentioned year, those risks could a mentioned more of what those possible field. just the completed Maybe or issues associated costs It's

Felipe Bayón

again, here today. being us And Frank. Absolutely, with thanks for

that's issues say news, to passing synchronized I'd I And with think very of we're Alberto, solving and terms very progress on floor that the in such. work good authorities the before like around good to the So making Castilla. and strong

term, terms activity, the of issues is good. in always About the and in being and I'm solving capital. the very where of wells. of opportunities So drill disciplined. to And deploy we very positively additional there the the of framework terms the in in opportunities Obviously, near that's quality optimistic

So over Alberto, the to Frank? you. Thank if the from you. you pass question I'll can take, floor please,

Alberto Consuegra

Frank, good morning. Thanks for your question.

we complying ensure all, First to with but so that authority, and specifically local order currently disposal month point takes the level national that optimistic to mentioned, disposal very but get for as And water with in sometime the wastewater of all executed. the are are of during can the at the national Quifa environmental river discharges, have Ecopetrol flow the May. complies parameters been reaches permit wastewater, we permit Felipe environmental the with the adequate environmental the Cormacarena, are authority, These has activities we in regulation and the dilution conditions the back temporarily for agreed include being established their suspended site. place that

terms impact current And say of terms So this of between to production, in plans the situation XX if and that's our activity to that production. With anticipate would what be of X,XXX barrels. least we XX will well are execute wells of recoveries, able to provide about us to at XX grow and additional X,XXX production will course, the to I there. respect in

associated have in mainly about year. that so optionality in $XXX production this We additional far an potential bringing activities, with million identified has program

So that's right you what tell now. I can

that terms of year, major the being this impact we terms through in anticipate In we see don't costs. lifting costs, our done activity of because of

Felipe Bayón

to like remains plan build what Thanks, on And on next one a I'd move was we to unchanged. before XXXX-XXXX our the the is couple messages. saying And Alberto. Alberto just one, that first and for

are and to plan gaps we we've that. about dealing bit to we'll little the that So you there. Point currently, that our report shared two I close and the number a -- our talked are to we've And we work the the we projection, think and commitments with working in reflects will and continue challenges with point number our one. is full that's one

was detail. as wanted build to Alberto I on So what just giving

please? the So Can the to next we one, thanks question. for move

Operator

Levy Our comes Morgan from question from next Stanley. Guilherme

Guilherme Levy

taking Hi, cost. good My afternoon. for the lifting question. on is Thanks first one the

have until the is level cost lifting So lower in that trend to quarters, the used we the seen past XXXX. to compared trend

much revision [ph] second reopened So of be refining. wells just perhaps the itself what question I how expecting peak of through this cost is much linked of get Production And do improved And during segment the that the company sense reductions was closed were has on higher reduction could end to I the this to of wondering of the with cost to contracts? the and how crisis yet? year? were in a quarter-on-quarter, so wanted not Thanks. is that

Felipe Bayón

an are you doing additional give some to ask for actually some basis things, will take structural aimed the company. opening ask will then I question. things on also lifting I'll on thoughts but cost of at And costs. the the with us for thanks Guilherme, around I Jaime dealing to nature Alberto give of overall the we're that

zero-based are. we So want you things like and where we on budgeting things that we're to some share working with that other

point I'll think Walter then number ask I talk one. that's to about So refining. And

bit, So with can Walter. Jaime, we'll the help ask then then first ahead. if go us Alberto, Please you and

Alberto Consuegra

the lifting Good range of in barrel. rate in per at $X.XX morning, lift our to seeing time, Guilherme. cost of is this would And $X,XXX, be exchange of an what terms costs we are that $X.XX

from in production to seeing well stop additional ensure because to also, disposal manage because to year's of that we're decline we're interventions plant wells So lagging able because that issue. and to are uplift be in costs We're last variable of activity the of going reopening execute our pandemic. production maintenance we there increase trend the water could main Castilla with going fields associated work

to and associated coming of optimization we efficiencies, you anticipate costs be matrix, our energy renegotiation contracts mentioned, service from However, with we're of as management. materializing also that going of optimization water

we're maintain per of see in going throughout between our barrel to all, and that guidance all be we the year. So $X.X able to $X anything

Jaime Caballero

we you And this. our what we're kind picture the production that is levels 'XX, there upward to and trends that that the reach increased view of right. And Thanks, challenge a outlook increased cost, in Alberto. and about would day broader might where 'XX activity in are relation how to it. we that is on XXX,XXX with in level broader plan, increasing And and challenge a facing? production, the we're recall be facing approaching spoke unmanaged, cost We're barrels a an of activity XXXX in a

we the broader the within company. are dealing that challenge that's So

- our we a into of just activity ceiling And that like this of plan, been ramp-up exceed and we per aspiration for goal we have $X.XX Alberto for barrel year, production said, never $X the time. that that we barrel. look is cost You and of one over ourselves as the guidance total might we also one of recall costs, a different we our big there around And company lifting that looked when is around at variables. where particular all that targets. outlook, that set the integrates kind the has two There's per unitary

picture. big the that's So

that the the levers 'XX and what company out for we plans right? on cost. a you we essentially, of in and are we've want that X.X COP COP in and the the So structural X.X a that? we 'XX, shared performance we within with levers. actually And for rolled in goal competitiveness we What to you, fundamental behind are plus have There between to doing do actually trillion. four It's how XXXX, want are That's achieve, basis that our called built program right? efficiencies launched plan, trillion big around - we've have we this, the increase

lever Alberto has efficiencies, and first operational The is them. described

be good going supply a And particularly, lever, supply we There's I'm we efficiencies. cover have improving around think strong a that, is efforts to we second, better. management that. So with not but chain demand in are better Ecopetrol, and we chain, fundamental which around at capturing can our regional

is in of component seen around starting efficiency, results. results we plan to financial retirement have that our that in effects noticeable launched see is the year. and we the It organizational the last might third are you positive The

a lever this it's It's processes that continue in coming the of around years. then our massive the and do that and fourth result structure component And that's something a of operate. gradually into And that plan, believe technology have will that, bring digital. we course, benefits we of Ecopetrol. we the way in a As is, into the we over program smaller how

matter one we've agenda. We a So important to them around throughout this group the Those part is last were From in and taken budgeting, process pilots successful, a year we've decision cost the zero-based around with right? sustainable all of pilots that totality. is component segments. standpoint, different philosophy some of roll that that adopted out in the its fully started

bottom So we but this, line challenge it are in systematic way. the we of on conscious Thank around cost, you. and confident feel we're that approaching a

Now speak over to about to Walter, is refining. who going

Walter Canova

Yes. say for the regarding a very we question your downstream. for Jaime. the it downstream. solid that, communicated, Thank Thank first as I you, will have quarter was you, Guilherme,

refinery the think, last for the XXX the the activities, in improvement of the finished, on an is quarter the we first KBD quarter, this the units first an XXX of of alkylation during and turnaround quarter, planned first also side, XXX course, XXXX. and mainly the improvement that versus cracking year February, starting quarter refining of the versus I did And fourth KBD with Cartagena On units. of KBD considering

For XXX KBD are the sustain months, to the to KBD. projecting we XXX following

wave we for last to XXX third both in regarding - Of KBD projecting are has month, COVID-XX. a course, both with situation But the pandemic the the refineries. mark question for been the as for have we if maintained XXX big it total

be per and we Regarding I margin refining question, answered think X-digit margins, side I we'll the downstream $XX.X the projection the rest that the high for your we you around the at finished year. Guilherme. barrel is business, - the for and of for $XX mainly. as This Q, of the saw, hope first

Felipe Bayón

we the Thanks, next can move please. to Walter. one, If on

Operator

Our from comes Rodrigo Almeida questing next from Santander.

Rodrigo Almeida

presentation. the for you couple high-level side. Thank questions here of have more my from I a [indiscernible] Felipe just additional Hi,

And group I wanted as understand whole. related ISA I going think a bit, back the, strategy the little just towards to long-term the bit. a looking first the to say, of one more to still is a little medium

for And production. the again the very I those I are And XXXX. two and way, how question just related the group, any is few increasing comments on I we into that be to think long-term have into you And reserves allocation the you over and very continue So other for that on look growth. outside into that past a deploy business on us that incorporation that if would say, capital think, it could just wanted would would us. of another little strategies this the Colombia additional, Congratulations. helpful congratulations has I well the share outside you understand of I years, expansions by forward? commitment Ecopetrol are of there expanded impact, I if bit could the be to of preliminary Colombia? ISA nice to hear, have similar shows questions going think capital -- that by the And And target carbon-neutral have. decarbonization. say, how plan with

Felipe Bayón

Rodrigo. Thanks,

around our us start can trends with massive that which some congratulate think and announcement of you. were the Ecopetrol. historical talk XXXX and you some made is by where comment. we believe from the that electrification. in and saying on decarbonization comments that think you announcement, way, things around and a two do with I've it's There I world are are your When But last we - we ISA disclose I'll the I and

we're More with there's in doing some And I the having to what go the short that net to very of that joined. back the listening Ecopetrol competitive you highlight think sort of term Jaime, the we're sort competitive just that consistent I'd about and in or our remain zero-based the And we've add And SCM, We've businesses environmental, we we're company, to Stakeholder to we like doing And for Economic by to in think digital and zero everything we commitment see we're of can do of think COX fit mentioned in with of announcement So transformation, get making be that XXXX, just in fundamental. We've terms budgeting, sustainable some Metrics, in ensure to at very But SASB terms of advancements if said, presentation, data. very endorsed you methodical. the the we're we're terms to And sense. specifically of talked the made diversification And from we're some by Latin being, that decarbonization. long TESG. ISA. we've we Alberto in. context umbrella and just we be have and our heart emissions companies And in if things doing, one, and and of is nicely you at America remain of part And about advancing talked diversification share if structurally the progress within need go being the Capitalism to of we then around technology of good of question how term. first through now. conversations which I and some progress. the very, following, to TCFD, the about to want commitment look our the governance, put or how we XX-F, been the company report we've and things only talked think January we of when need the we've example, from of Forum, go or sustainable and World right a and it's We Economic we competitive. doing to as I about think we're protect things just that very what and I in terms in we're forum. social last World that's terms good about

I question. that's first your So think

it. was been and have When the been and done plan I during things The just updates we're program. update and we've want the one, materialize, second not the around the I we've us a on and an and providing the terms And with Gato XXXX-XXXX presentation, Alberto you. in some of do we capital And information. I'd things allocation, but following the Brazil which Permian, to know Mato highlight opportunities company, the you've providing US. in in to about is talking the in like doing of share and this presentation, giving following, we're

the about XXXX. we If operations, the performance you - back, we've and if step we started operations in Permian had, production think November

in I'll with And we sliced been ended XX year, May crisis months. even X,XXX in that's points. and March, it's did, dumped you of The XX of important with point. barrels. barrels production, additional when XQ that's last April, March for a And WTI was very months they exit as net so and prices the barrels data up rate before royalties think And And I Ecopetrol royalties. production, X,XXX XX,XXX give after

rate in years April, was barrels. of just month just was Ecopetrol's two JV the the terms April, something was XX,XXX one, production - first the The was in for And production time barrels. for XX,XXX provide XX,XXX we gross show the average the Permian barrels production even bit in And of to where in Ecopetrol. around for spending April I'm and we barrels, color not exit April ago to that more announced are progress. XX,XXX And a

your think again, questions. this made. progress that we've you thanks showing for just And So is I

on We bit XXX,XXX to back. you more and we're we a the you given to dealing the where We've on that will I'll please range, more that given some we are color I'm Castilla need with. Alberto, things ask Alberto and communicate. we've details give provide going to to ahead. Alberto come things ask context. go there's around of XXX,XXX Whenever And production. bit a us to new

Alberto Consuegra

good Rodrigo, Felipe. morning. Yes,

recovery Just Felipe elements on uncertainty to in what our still there said, first, are plan. of complement

Cira. and Castilla Chichimene, at additional content, production pandemic but constraints us our plan, operational a So issues demand basically Castilla successfully XXXX Water or recovery we will Sediment I gap, And prefer La depends in Basic provide being in providing BSW, conflicts also in still social the the of to for right to able you high waves risks I with anticipated rather already would will rather mentioned. which levels manage have ramp-up the it production, bringing to work wells that stabilize and fill water you into quarters, to sorting the the to the generalities than give by associated in This disposal areas.

for outlook So the that's kind year. of the

Felipe Bayón

next Alberto. If can we for you, take detail. Thank the Thanks the question please.

Operator

Vicente Our next Falanga from comes question from Bradesco.

Vicente Falanga

a efforts question two. Alberto. on I Thank you, had Felipe, And transition Jaime, was emissions company. lower - to congratulations My to the

on provided in First Are water tariffs during recover separate oil Colombia? players expect disposals? Or the And on have my you to projects? to more more been expand pandemic Ecopetrol doing environmental working provide can but facilities any irrigation do for there you licenses do install details to have second financing these that Thank on midstream you sorry update to water? of you delinquency that the what is on all, the from for Castilla, an question, you to could provide in insist on very funds? front? smaller you And Ecopetrol When much. effectively

Felipe Bayón

part again, bit López Colombia going last give producers ask on And for doing did some of Vicente, we're the question during respect a again, your which our I'm to the being detail small thanks that fundamental of in views to a Castilla more Alberto things support to to for Milena to And us us, in is for thanks Ecopetrol. with what help going our tariffs. transportation ask I'm we on following question, and with here and on water, thanks year today. of then and operation.

and Alberto then please. So Milena,

Alberto Consuegra

as Vicente, reactivation. water good outlet to We river. the already that regards going the very have necessary executing to optimistic morning. permit disposal we are the With work Guayuriba are at at and we we already get that able currently we're this, be the to paperwork submitted Castilla, mentioned for

And these We will the of get completed permit throughout hopefully, May. works be expect back. month we this that

to constructing we that's authority, kind And risk, other some a the with be with them. - type a particularly we this situation Cormacarena it also that that. manage by of fields are relationship hope with So well in going healthy of adjacent the able to

improved So we're situation now water managing disposal in to right regards the of issues. an kind with

Felipe Bayón

Milena? Alberto. Thanks,

Milena López

morning. Good

a we perspective. principally have we situation flow producers helping engaged series of aimed year in oil measures when cash So a with the prices, last lower at from

CENIT things done these defer to subsidiaries. its three payment terms was across had had to up six transport of payment tariffs producers and components. This basically So allowed that We months.

certain up transport certain in producers periods not higher flexibility. transported compensate we allowing in months, you or of those months first which their the low our during following have had terms the during also pieces flow in lower giving that discounts, largest at prices. in cheaper measures of of volumes there the payment some up the some six of three of pay to producers allowing the some four also We were were volumes, some on did XX could if payment to they months to generally or for CENIT, up sense flexibility terms where you allowed terms contracts by months were transporting oil of six in months. some had And terms was we smooth But primarily And measure generally but months. pipelines, to segments that speaking, extremely cash average, you

Felipe Bayón

next can if Thanks, Milena. please. And take question, the

Operator

comes Financiera. from Duarte question next from Our Corporacion Andrés

Andrés Duarte

wasn't have you. for three questions call, able my during Thank Spanish you the I results. so outstanding for Good cheers to short those thank taking morning. of I questions. ask course, and

to is one first The related production.

manage around XX% had question. gas you that problems production you the And wanted to That's first the mentioned increase did to You in this item. on I understand how yearly?

I around respect previous wanted XX% pretty imported what There's That's increase you're increase? The XX% respect energy That's to with And second for costs. around one a is Q. understand a products. to renewable related mentioning generation. XXX to this goal XXXX. megas in finally, the wanted - I to to explains with large. capacity,

if market. electricity you. So to were sell like regulatory on capacity changes this actor to again, in the limited consumption some wanted understand results. congratulations expecting you the for an is And local order or I to Thank become for

Felipe Bayón

being We for will today, really the I here thanks team. it. with pass message Andrés, to us wider on appreciate and

renewables, but gas, Baez, about that ask to question. and Yeimy going terms I'm our of gas, So talk to terms Gas, for President in take in will I of Vice

take going products, to renewables. to is question, question. I'm that going of I'm terms ask In with your Pedro which And Manrique third to start

of self thing daily we buy that we And or broadly, consume basis, first XX% energy the our is So on XXX is a that generation, equivalent comes the from installed capacity the of grid. roughly, rest roughly energy an roughly, equivalent the megawatts. from and the of

megawatts, XXX I So numbers. and self generation the it's can confirm, The only. those are

view refinery. And the of is in from Ecopetrol increase we that continue about we Fernando, geothermal to when and to we progress make announcements building, capacity. eco terms some going We've options near that Cartagena continue our with We're programs. landed. San some in So well. things park will wind our of solar continuing we're solar terms our But we right construction, now other talked will have we're started doing forward yes, in Cartagena, measuring the as XX%

So that ahead. will continue go to

to then over ask, please So the products. he and to Yeimy? if about can so I'm first can going Yeimy, question, hand imported you talk the take Pedro,

Yeimy Baez

Felipe, you, Andrés, your question. Thank and for you very much, thank

from it the mainly versus the to main period Floreña, This in assets per increasing Well, result a us in X,XXX about the well. are increased drivers barrels all, in our better were we first XX barrels and anyway, during that per the important but were in we the the expected you value first production position pretty Japan. also know of equivalent to the the we of Hocol a production power and Equion operational of can located the acquisitions and so Andrés. to the these course, is continue during secondly, of industry of able mobility required to the efficiency Colombia. preserve terms is of that XX% because foothills those mentioned, much, generation significant allow good, -- quarter, important we is being plants, for actually it area the effects in of assets. pandemic, day, materialize quarter day. as very these two really of facing in working was additional XXXX for day. with are increased the Guajira the and have as Caribbean able actually about challenge also manage Pauto the you also demand, in in economic those the been natural the use assets rest delivering gas we we were, we results deliver is As last Well, Well, Cupiagua, XXXX. by the Hocol. first producer Saying in finally, to gas Thank going in effects equivalent about has that and reflect we are these were to how they And that especially same of an our we leading sales see we Equion in results are And the with transition relinquishment of The significant license. value to gas this production - in keep gas-related expect committed the And to course, that us coast.

Pedro Manrique

you, the on Thank Felipe. answer Andrés in increases interest your question year, And imported your products the this in for first thank and your you XXXX. firstly the for quarter going of Ecopetrol. I'm in to question

a First of we and in importers the reason net units seeing gasoline. is that alkylation maintenance. our increase Barrancabermeja, and refinery system program are we first under of FCC maintenance had all, And in mainly we the why the are were because

levels. to demand pre-pandemic imports. additional to the mentioned is had of And required the quarter second higher that Felipe the reason why increase recovered So first in that we levels XXXX, before, as because gasoline local actually

versus this XXX So was the in had average have we that quarter we KBD pre-pandemic in KBD XXX levels.

made recover us import more actually they So of gasoline.

increase basically in you. that's products. driving that So importing is what Thank

Felipe Bayón

next for And again. please. we Pedro. one, Can thanks the Thanks, take the questions

Operator

Our from HSBC. next question Yang comes from Lily

Lily Yang

for you you Hey, Thank my question. hello. all. Good to taking see

the give still a Ecopetrol just increasing policy So proposals at that's the less to COP to oil just get out so when fuels, imports. oil right? nothing maybe can any for for sector tax that I question revenue reform far? us more is sector, you in there's structural, you trillion would proposal to the wanted very some pricing on taxation know the can there we parity even it's much is, what still them of mean quick, one. very of different - implications the this export about the us XX to another sure for And One any Yes, country but make or seems And quick be treasure.

and So about but international, investments. do walk Any pipelines discussion the parity anytime more room review coming change for soon pricing indications news would this the the on rate any growth of you if more midstream. And the see the is that of the import towards they side energy need can to for is CapEx? You there? the indicated fuel I a on with where about status see ministry question, model or to third out add what see it's

business CapEx of can you in areas, an give returns because, timing this in idea us if view, offers and So about [indiscernible] which attractive ballpark our Thank you.

Felipe Bayón

have you here Lily, the you, to and call. good Thank in

for Ecopetrol. thanks always, As following

Congress tax of was is withdrawn Congress terms reform project In presented should officially so tax thing to formally, be the reforms, that today. that first from the

having the pull the the the - discussed of official will basically project both from it the said they back the in and the only So or has government and that chamber, withdrawal refrain will today. Senate happen project the even though take -

no project will still no So the project. the there's that is thing, there's replace that original - Lily,

anything So now right realm would that from that be sense, the in of speculation. we say

there's can't will provide So project not any it we no be yet. a - good because judgment

I moving that better a starts of proposed to it. we And that's have assessment. probably So a need or way do saying project as or Congress, think we obviously, as draft our soon in forward will

leave that's So it. where I would

some view In clarity, more price to Pedro continue to detail, Pedro the to that's ask views on Milena follow-on. far give us now, to something or to unchanged. your some we I'll going in right but will we policies give us updates ask to on as fuel ask questions. know And give terms that. terms I'm of going as And midstream, And I'm that short remain of us

and Pedro, parity you fuel us around So please? color then can some price more give Milena, if

Pedro Manrique

All to parity you prices mainly thank parity for entertaining this export been Yes, question. right. from import for the your moving for certainly, Sure, -- [ph] idea has gasoline. Felipe. Lilyanna of government

and means because will ready there be getting in basically fuels here are fully competition Colombia. that we So

waiting the - this group, government been but that while, and it's is obviously, again, a And for setup is for decision. take place of working discussion decision side for from government but a has to is benefit we the just as what a our So the we, we're because we're that that country. don't getting preparing decision near that you. ready see current conditions the of doing could making but and in that just us, the future, decision ourselves Thank in

Felipe Bayón

Milena?

Milena López

Lily, Morning. your thank question. you for

changing in their that as for a alter And February here the So year, for sets Energy actually is be applied which the is a you that pipeline in when It we it the pipelines. real of there. the methodology CREAG, somewhere it, calculated, tariffs decree the they tax look this of for refined get is oil the the into during refined business going should big the which of decrees, pesos. formula recall, sources This at regulation XX.X%. Gas. will to of weighted calculate of that and we XX.X% rate this refined inputs issued are before applied Commission denominated couple I calculating no cost product side, changes of they the and to average what is rate. they was time when did of be rate products on one Regulation basically, is and a which and pipeline between the calculation use we changing averaged, regulator cost way so capital in periods average be are this capital that and is And a a form for to our weighted And

a thing exact and as that important range The the been part it's other you an reason number the methodology give the has set. is opposed for calculating of that WAC is to I

comes effect are tariffs tariffs. new into However, are once a recalculated the WAC only when and only have for recalculated tariffs we methodology

So and half from CREAG, tariffs the pipeline the for comments new or formula me, calculating interested refined parties, has this government in will for methodology announced the new the of also the they the issuing product has excuse year. be second that also - all in

it to And officially, is is force the into once comes of have published, will with a eventually, in issued things tariffs, time, terms which will methodology and cost the the that capital, new market comments that at of in and point XX.X% expect once used chance that and then we time, So of use CREAG average to somewhere interact be it it sort. this weighted and will new be to that in at between calculate XX.X%. point

was on be side. the so weighted increasing we product formally different yet, capacity then was that suggested rate expect comments, looking it not would and remunerating to this ready the is has by And increased at capital issued issued WAC new systems that the the investments. average be this it expansion is other currently eight that's the was decree Ministry plan published for for what additionally, And time Ministry, all refined of that And So operate. be been obviously, has the at cost would pipeline also of They of periods. network. the the that in this one capacity

through end there some all next that of aimed the projects So ready then at way being go projects year that XXXX. are are and

So long-term it's plan. a

We analyzing them of started many projects were on couple projects. these have we A before. of were working

are Some of them different.

a So to million we vague but increasing for to million the pipeline investments in magnitude, I'm giving of of expect terms the be this expansion country. you worth of capacity order $XXX somewhere plan between $XXX

business, but been the this closely on possibility In the related the of organizing to in CREAG addition and working it, specifically regulation. pipeline has to not

product So that you strategic the can have refined reserves throughout country.

has something they're that so something And working not comments for that that's but been is yet. published on,

certainly from very the side. interested investments looking pipeline see capacity in terms in, increased risk of in well with the are and with and avenues demand line we those sort It's So we in sector. the something your little growth for are comments remunerated of at

in segment. So it's we're working the on something certainly midstream

Felipe Bayón

question, Thanks, Milena. the take next we please. Can

Operator

from Our next JPMorgan. question comes from Halberstadt Barbara

Barbara Halberstadt

Good developments are rating. Hi. is have call. sovereign seen Ecopetrol for in actually ratings. regarding My Colombia recent morning. Thank question you pressuring the the

rating case has keeping that So discussed a the Any been a have company has had? of any if with Ecopetrol possibility agencies, rating, I you of color downgrade Thank in you. was its IG the helpful? Colombia of the discussion non-IG to be of wondering rating would if

Felipe Bayón

much give And to non-IG would Barbara. obviously, and That's is I to ask going any of Yeimy in relevant as but a color guys. I'm movement of us that because, could Thanks, terms impact rating topic you is eventually, that for Ecopetrol. where as it required start, you to

So Yeimy.

Yeimy Baez

Hi, question. Thanks for your Barbara.

we go principles principle rating, So and managing with I stand-alone the our focus the think think time only this, the agencies ago. long this conversation on I started around around course, to first a can is, of

understate I fair there our in of of it's link years, number I sovereign a sovereign in are in are as rating. is will factors number Clearly, with I That's are fundamental right, in Over such. a consideration favor our our are our to changes any affect that the Having that, that of our degree, likely think that number the likely the things favor, last at And that. we've said think understanding. agencies rating, the a it that. been affect express that our rating. cannot will And to recognizing.

whole our tier clearly, ratio and as are gearing sector. debt a first the the probably in amongst levels Firstly,

headroom debt have we a the We sector lot of in operate. the in for context which of

that changing the kind ability has international think price per our Ecopetrol And the improved at to view from sector. in the is and volatility, XQ gas I for and Secondly, sector you thirdly, very look that very, we of of outlook the in one sector. are bounce if is right? are EBITDA oil oil showing results the fundamentally gas highest the the the very, of probably back barrel And demonstrating

the going this? things We know. What's be So outcome they don't of there, are our play those to favor. all and to

coming need well. I the factor monitor over situation we a weeks will the months, be think to volatility and as

here position we my months six those, see X, And but variables better control. focusing maybe So we Thank the are is goes, you. where than on message X, that we we're will we can in ago. a that in were

Felipe Bayón

If next please. Yeimy. go to can question, Thanks, the we

Operator

comes next [indiscernible]. Our from Rodríguez question Carlos from

Unidentified Analyst

you call. the And everyone. morning, thank I for conference Good two questions. have

is on first term. The long the one focused more

if the focuses, will and the I And gas oil if another oil should and for situation revenues split the sales of industry? And the and an offset order and that from statement second maintain exactly company, gas short-term in from overall not impact emissions? net products? you. international the mean becoming come mean what to is a local crude my sales does in of if question and Thank For Ecopetrol zero impacted. oil the the current Colombia number will in sales be and in company

Felipe Bayón

my was - Mines I of Thanks, parts the well of Carlos, in to mentioning Energy other the thanks to obviously, parts today different we as the situation. authorities that different there It's government, of and medicine. couple of, for with us. food, that and about and I And being mean, can closely situations with different Carlos, country. the deliveries with in we're in Q&A be of remarks with One, here when it's there's of know, country. working the the it's and question we've And I'll fuels ensure Ministry about start opened for very you up current impact things. terms second

them the and the in ability of logistics, the are complicated and to that terms provide the people through products more logistics chain of need to value it. Some the

COVID not in hope able a still wish, of understand our we we we're had sense to in it's markets the export protection I'm that quickly we last to in it that common And talking Colombia, year, were on absolutely even the crude crisis that point not and in CEO place of we of were where and can as recovery paramount, well long citizen own My could the depending markets impact, company, health the you though is So do some Carlos, this terms impact, terms some I the of have some our products. parallel adjusted economy diverting takes, as place products of out, now flexibility lives as them prevail, some people able to with refineries. do have we particular some but in that how in of but fundamental. the very middle and that when we and of and

that can commitments some But progress people. see of to can we the our fuels continue hopefully, in ensure the operate that own to sense. we terms we provide in So energy will to and

terms net highlight. things announcement, that and our I In want the emissions zero couple of to long term

is that for reduce we've The emissions. reducing first our highlighted terms we've we it our in will thing years our quarter-on-quarter And progress emissions. actually so, we're means that the last or how of

we equivalent tons, XXXX, mean trend XX.X were So year. XXXX, by that that hadn't done in you think turned about we where taking COX of million into and that would If point have million nothing tons no we XX XX.X% number emitted one. would and if the action,

XXXX. taking, that we're actions the actually With been tons have the means XX% would million be XX it would that XX.X% by

two, million So point Point zero XXXX. one. that XX will tons number in number become

bit of So business? we a explanation. that I to just Definitely wanted Does provide will additional being an the oil that mean not. not gas and

more to very to it's that be We efficient. that particularly, competitive. will mentioned different business. need we we and technology, continue be innovation fundamental gas oil absolutely through to today, the through we've processes, through And we're first continue and to but protect the work thing things, And in need what doing technology, we

number that potential will ISA to. one. example, means, the that for number we diversify. point So two, reference Point And we've made acquisition of

third The reduce to thing ensure decarbonization. developed means ongoing will can will existing continue we emissions. assess that use our we being that's it we technology to And technology is as that

a we in So sector. the change nutshell, not will

can We same different will convinced as energy for a will that's all first terms but People to megatrends: an transition continue about one a second companies, transition, was we fast to eventually, need are and shown the one, itself. for you've in two And but I one, that you continue do of has Ecopetrol not the be advanced energy the oil look, Ecopetrol Ecopetrol. committed that pathways your the are see will all that commitments, I us, I'm ambitions, think views, saying you company we gas other of think to transform electrification. and your tell fundamental in of there's that. things to your earlier questions decarbonization; company, in terms quite

see. I not definitely, that's roughly So out But where the think moving sector. of we'll we're

do. we what protect will We

We continue will more efficient. be to

If will our one, lever, the can we agenda; lever our for environmental, we to move next we decarbonize, -- will governance question. please. a as and Thanks the social our and We will agenda. diversify, technology, use TESG

Operator

Our next question comes of from America. Anne Milne from Bank

Anne Milne

- comment an adopting good for strong in the in the I in be And And be estimate do [ph] be just or other could any will confirm companies example next Congratulations $XXX this on your but leading EBITDA transaction exercise I on what's you for be numbers same formula have next you plans, Thank and that business knowing going you decreasing? on you're sector that next increasing TESG I if management Yes, that, if think I front investments morning, the And going million throughout example through? in of Felipe. this year just that you will this not about Colombia. there's that quarter. forward, if want [indiscernible] ISA standards. a much. update will the in to the hope very goes over global you that or also to liability independent many then, years. the talked two the guess, the Jaime,

Felipe Bayón

here. being thanks Thanks, XXXX-XXXX period. unchanged, commitment. for That's for and Anne, the and million Yes, for our that's the about agenda XXX of and our talked COP question, decarbonization thanks terms in time we've

there's on still I that for In for things pick will the what after transition on I was of table is think, saying, and to be some of comes energy been that, think innovation, technology. the new in as elements build a I us have new There on. defined, space but pathway other terms the of

to are nutshell, So additional the XXX plan, to next over provide you forward be XXXX-XXXX, COP guys where as some on or comes, updates million business as we investments we whenever to are able our we continue we additional move in above details. that a still and defined. to will be provide in But

terms that? the question, want think second in first I to that's of Jaime, take if And thing. you So your

Jaime Caballero

funds cash transaction, at answer of context it's depend can an and we Felipe how not associated liability course, for we management of I our is an require ISA. of take a we do transaction multiple own In market going Clearly, to liability context, financing management, stage plan, which that it's the involving details by do for beginning that of have conditions mix On to this and at about but of choose of conditions the your liability tell are it's Thank broad might that to our market yet an funding of eventual of Anne, option. is do, position. the you? the remains you to sources been could the the question, broad than that you that that the eventual -- on the option has an It's provided matter frame final be organic in we And an to determined, that that I is management. what open. cannot any to other some about you. form window more provide option. advantage transaction

Felipe Bayón

the to go can question, next please. we If Jaime. Thanks,

Operator

Luca comes De T. question from next Our from Rowe Andrew Price.

Andrew De Luca

Yes, answered, of actually to have you the Most questions back to hi. for wanted I but questions. my been something go Thank earlier.

in insight sector And about sort that's occurred taxes speaking, whether the the there something gas to more been any situation? that the have any sector or to would can't Just royalties? just fiscal gas and into know oil Colombia's be I'm broadly past, past what and I the but taxes discussions of around could form discussions do you. trying of helpful? understand, yet, talk you on broadly. support in higher the influencing Thank oil hasn't

Felipe Bayón

efficient, being some very, by line, this with for poverty announcements you the for you When Colombians XX% were below -- as thing of see Thanks, recently the complicated situation. that of operation, very government example, several ourselves of being this. made it's of over to We see -- our that to and followed country, that is being it I'd have it the a comments first the we Andrew, first may opportunity. from being means part connection best in people have today. we've from in bringing of And Ecopetrol. this providing and I we and we and the that thing the being say, here think have commitment the terms ensure around safe, years of thanks backbone do ethical terms And poverty operation being that's and recovery made of out for back that possible of gone can the

from of have our that think you're we think dividends are start very eventually. as to I around deliver, things, good from road. the point results we do there's need the the I a ensure And in that view, and performance. is we that thing best to thing XQ good mentioning, it's And very, So

royalties. policy, terms on in a could very we've if that or oil But income, of There's the help. results. prices dividend AGM if is comprehensive better taxes the will more that have should and that. more better And We decide we've clearly, some results range on in there and and productions there signaled, be there's better estimated

say, lot would there's do thing is So of in I think to regions our a presence. -- the that, addition we that that's part. in with The Andrew, one I our could I investments, all with that

country, services just We have to fronts local operate. of Colombia. work where that and XX -- community. in work were some from across only show for we the goods buying fronts when to of and we XXX in have terms May, it's everywhere the with relevance closer April, your helps context, We're Today, a we're we presence, in and

expanded terms we an Ecopetrol. of there's can role play that in So

to very, to discussed, Andrew, yes, we we'll reform. earlier, keep was be continue reform posted Lily and - I we'll around able some And to something tax to think, you progress starts obviously, guys that's be impact. So very monitor presented mentioning formally maybe, important assess we'll have was and whenever I potential the will question, as it fiscal we

wonder for thanks I there's any questions? that. additional but - So if

Operator

questions. further No

Felipe Bayón

Okay.

address ask to Quifa. if with before just like we close, So I'd to I regard can question Alberto Frank's

close then Alberto, give some the and can us So I'll Quifa, you call. Thanks. if on views

Alberto Consuegra

net production. Ecopetrol day options. field per and Yes. in the voluntarily water identify about operator X,XXX That's Quifa has reduced Felipe, our disposal barrels it to as partner additional seeks

pressures that future, in could So eventually avoiding production. more the reservoir impact impacting

and of the So to Committee association of be third been have be Executive at identified will second and taken these during discussed quarters year. options the and executed this

see in that to point at a production time, So expect recovery the previous in should levels. we

Felipe Bayón

for to Thanks Frank. providing Alberto. Thanks, answer that

with for presence. XQ us here So today your again thanks results being our XXXX at call. We appreciate

and from us of around the you the performance we also that communicate value and other that share before, help you which follow and reflections us said the we as outside. view how can company, We terms business in way especially It also guys but our occasions many things help the push the and improving value it comments, the many, results, views understand make. you we've it better our the some of some backs, challenges, and in in

so Thank being a day. So great safe. for here please have and today, thanks again you and stay much,

Operator

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

You now may disconnect.

Ecopetrol (EC) 6 May 212021 Q1 Earnings call transcript