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CalGEMs Global Emerging Markets Conference – Ecopetrol S.A.

Ecopetrol S.A. · Jun 2, 2009 · 56 slides

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Slides

  1. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 1
    OVERVIEW OF ECOPETROL CalGEMs Global Emerging Markets Conference San Francisco , 2-4 June, 2009 1
  2. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 2
    AGENDA Investment Environment in Colombia Oil and Gas Industry in Colombia Ecopetrol: Overview, Track Record, and Strategic Growth Plan 3
  3. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 3
    AGENDA Investment Environment in Colombia Oil and Gas Industry in Colombia Ecopetrol: Overview, Track Record, and Strategic Growth Plan 4
  4. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 4
    POSITIVE INVESTMENT ENVIRONMENT IN COLOMBIA Stable democratic government; improved security conditions Sustained positive GDP growth rates; higher credit ratings Stable monetary policy and exchange rates Favorable conditions and…
  5. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 5
    STRONG ECONOMIC PERFORMANCE: AVERAGE GDP GROWTH OF 5.2% SINCE 2003, EXPORTS DOUBLED SINCE 2000, AND RATINGS CLOSE TO INVESTMENT GRADE (BB+/Ba1) GDP Consumer Price Index 9% 7,50% 10% 6,80% 7% 4,90% 7,7% 5% 8% 3,40% 4,70% 6,5% 2,90%…
  6. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 6
    POSITIVE CONDITIONS HAVE LED TO SUSTAINED INCREASE INVESTMENT IN COLOMBIA Investment (% GDP) 30 25 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Foreign Direct…
  7. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 7
    AGENDA Investment Environment in Colombia Oil and Gas Industry in Colombia Ecopetrol: Overview, Track Record, and Strategic Growth Plan 8
  8. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 8
    SPECIFIC FAVORABLE CONDITIONS OF THE OIL AND GAS INDUSTRY IN COLOMBIA Transparent and stable regulatory framework Medium discovery potential Excellent geographical location Open door policy for private investment Extensive…
  9. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 9
    COLOMBIA HAS A TRANSPARENT, STABLE REGULATORY AND INSTITUTIONAL FRAMEWORK FOR THE OIL AND GAS SECTOR Institutional Structure Regulatory and legal framework Favorable and stable contractual Policies Exploration and Production…
  10. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 10
    COLOMBIA PRESENTS COMPETITIVE STRONG E&P INVESTMENT OPPORTUNITIES Colombias strengths in E&P Competitive landscape Potential of hydrocarbons discovery Attractive legal and economic framework Favorable contractual terms Political…
  11. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 11
    E&P MAP OF COLOMBIA SHOWS MEDIUM DISCOVERY POTENTIAL Total Area for E&P (Apr-09, million hectares) E&P Land Map of Colombia Caribbean Sea Total Area Sedimentary Basins164.4 (100%) Panama Venezuela Total Contracted +…
  12. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 12
    RECENT AUCTION ROUNDS ATTRACTED PARTICIPATION OF INTERNATIONAL COMPANIES 2007 2008 Caribe Round Colombia Round Heavy Crude Oil Round BP Meta Petroleum Meta Petroleum Petrobras KNOC Shell Hess Ongc Videsh Exxon Mobil Ongc Videsh…
  13. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 13
    AS A RESULT OF IMPORTANT REGULATORY CHANGES COLOMBIA ENTERED A NEW EXPLORATORY CYCLE IN 2003 Exploratory Cycle (seismic kms and no. of exploratory wells) Seismic activity (kms) No. of wells 30.000 120 2003: Beggining of a new…
  14. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 14
    CONTINUED GROWTH IN E&P ACTIVITY IN COLOMBIA SINCE 2003 HAS LEAD TO A HIGHER PRODUCTION OF OIL AND GAS Number of Wells and Seismic Activity (thousand sq. kms) No. of wells Seismic 120 96 30 100 70 25 56 16 80 20 1 60 35 2 47…
  15. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 15
    MAJOR OIL AND GAS COMPANIES OPERATE IN COLOMBIA UPSTREAM DOWNSTREAM TALISMAN ENERGY ENBRIDGE PACIFIC RUBIALES OCENSA GRAN TIERRA ENERGY OLEODUCTO DE COLOMBIA PETROMINERALES NEXEN C&C ENERGY BP BHP BILLITON CEPSA CHEVRON…
  16. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 16
    AGENDA Investment Environment in Colombia Oil and Gas Industry in Colombia Ecopetrol: Overview, Track Record, and Strategic Growth Plan 17
  17. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 17
    ECOPETROLS HIGHLIGHTS Transforming in to a global energy player Among the four largest oil and gas companies in Latin America Market leader in Colombia Major upstream growth potential Increasingly efficient refinery,…
  18. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 18
    ECOPETROL HAS BEEN IN THE OIL AND GAS BUSINESS FOR MORE THAN 50 YEARS, AND IN 2003 BEGAN TO TRANSFORM INTO A GLOBAL ENERGY PLAYER Key milestones From a local oil & gas . To a global energy player company 1951 2003 2004 2005 2006…
  19. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 19
    ECOPETROL HAS THE LEADING MARKET SHARE IN THE SEGMENTS OF THE OIL AND GAS CHAIN IN COLOMBIA Portfolio highlights 2009 Business Area Current levels (Mar/09) Market Share in Colombia Exploration P1 Reserves* 1,473 MMBOE 62% Oil:…
  20. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 20
    ECOPETROL IS BALANCING ITS PORTFOLIO WITH LOCAL AND INTERNATIONAL OPPORTUNITIES Local Exploration Projects International Exploration Projects GULF OF MEXICO Offshore Caribbean Round K2 Tayrona 7 Blocks 9 new prospects Caribbean…
  21. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 21
    EXPLORATION AND PRODUCTION HIGHLIGHTS IN 1Q 2009 Signed a Participation Agreement with Anadarko Through subsidiaries, EC will have a 50% participation in the BMC-29 concession located in the Campos Basin in Brazil Confirmed oil…
  22. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 22
    ECOPETROLS POSITIVE PRODUCTION TRENDS Gross production evolution (MBOED) * Regional production breakdown (March 31/09) Gulf of Mexico K2: 0.2 mboed (0.04%) 58% 60% Gas 59% 60% 57% 58% 59% 447 458 Catatumbo 367 367 376 385 399…
  23. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 23
    REFINERY OPERATIONS Refinery runs and utilization in Barrancabermeja Refinery (MBOD and Utilization %) 232 230 232 (93%) (93%) 228.5 227 (92%) 223 224 (97%) (91%) (89%) (90%) 213.4 (94%) 2003 2004 2005 2006 2007 2008…
  24. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 24
    COMPETITIVE COST STRUCTURE Lifting Costs (US/BOE) Finding & Development Costs* (US/BOE) 8,3 21.0 7,2 18.7 5,2 5,51 5,44 12.9 3,3 2005 2006 2007 2008 2008 1Q 2009 1Q 2005-2007 2006-2008 2007-2009 Refining Costs (US/Bl)…
  25. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 25
    IMPROVING ENVIRONMENTAL, SAFETY, AND SECURITY PERFORMANCE Environmental incidents Accidents (per million of labor hours) 112 5,8 88 59 56 2,6 1,8 1,7 1,3 15 2005 2006 2007 2008 2009 1Q 2005 2006 2007 2008 2009 1Q Stolen…
  26. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 26
    STRATEGIC PLAN DEFINES AMBITIOUS TARGETS FOR 2015 THAT CALL FOR A CAPEX INVESTMENT OF US 60 BN DURING 2008-2015 Mega Goals From .To Capex investment 2008-15 of USD60 bn Upstream: USD 38 bn Current Goal Increase 2008 2015 2008-15…
  27. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 27
    2009 INVESTMENT PLAN OF US6.2 BN, A 29% INCREASE VS. 2008 CAPEX Budget (USD bn) Key projects by segment Progress in Q1 2009 Executed 1Q Plan 2009 1.000 seismic kilometers Domestic exploration 26 Blocks GoM (US) International…
  28. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 28
    RECENT ACQUISITIONS Closing Acquisition Overview Strategic importance Value date Petro-tech Peruana Off Shore 50/50 Partnership with Offshore E & P (11 blocks) Feb-09 USD 450 mn (Jan-09) KNOC 12 MBOED production * E&P 1P…
  29. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 29
    STRATEGIC ACQUISITIONS (1/2) Exploration & Production Petro-Tech Peruana (Off Shore International Group) One of the largest oil and gas companies in Peru Strongly positioned in offshore hydrocarbon exploration and production.…
  30. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 30
    STRATEGIC ACQUISITIONS (2/2) Refining Reficar Increases refining capacity according to the 2015 goal of 650.000 barrels Potential synergies between the modernization processes of Barrancabermeja and Cartagena refineries…
  31. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 31
    A TRACK RECORD OF REVENUE GROWTH, IMPROVING OPERATING MARGINS, AND CASH GENERATION Revenues (local and exports) (US billion) 15,1 11,1 5,5 9,1 36.4% 7,7 3,1 27.9% 63.6% 6,5 3,5 38.5% 72.1% 4,0 2,6 40.0% 3,0 39.0% 61.5% 61.0% 8,0…
  32. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 32
    HIGHER PROFITABILITY AND ATTRACTIVE DIVIDENDS Net income (USD billion) 5,2 2,6 1,6 1,7 1,3 1,1 0,6 2004 2005 2006 2007 2008 2008 1Q 2009 1Q Dividends declared per share (USD cents) 12,00 131,9% * 140,00% 10,00 120,00%…
  33. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 33
    STRONG BALANCE SHEET: FLEXIBILITY TO FUND GROWTH BY LEVERING THE CAPITAL STRUCTURE Consolidated Balance Sheet (US billion) 10,6 6,3 10,6 10,5 9,6 23,9 21,7 21,3 8,9 20,9 8,4 16,2 15,4 13 13,9 13,3 10,3 10,8 4,6 5,0 6,6…
  34. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 34
    ECOPETROL HAS HIGH STANDARDS OF CORPORATE GOVERNANCE PRACTIVES DRIVEN BY AN INDEPENDENT BOARD OF DIRECTORS Ownership structure Corporate Governance Code Unilateral Statement of the principal shareholder Mar-09 (The Nation 89.90%) In…
  35. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 35
    AN EXPERIENCED MANAGEMENT WITH AVERAGE 15 YEARS IN THE INDUSTRY LEADS ECOPETROLS 6,500+ EMPLOYESS Senior Management Javier G. Gutierrez Core business unit CEO Corporate 3 years Adriana Echeverri Chief Financial Officer 15…
  36. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 36
    FIRST QUARTER 2009 HIGHLIGHTS Oil and gas production increased 6.3%, in line with the objectives for the year Successful execution of strategic plan, important strategic acquisitions amounting to more than USD 2.0 billion across…
  37. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 37
    CONTACT INFORMATION - ECOPETROL S.A. Investor Relations Department Director Alejandro Giraldo (alejandro.giraldoecopetrol.com.co) Analysts Claudia Trujillo: (claudia.trujilloecopetrol.com.co) Silvia Angulo:…
  38. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 38
    ADDENDA 39
  39. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 39
    COMPETITIVE CONDITIONS FOR PRIVATE INVESTMENT INCLUDE FAVORABLE TAX RATES AND LEGAL STABILITY Tax rates, and deductions Lower tax rates Current tax rate of 33%, down from 38.5% in 2006 Tax free transfer of profits or dividends…
  40. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 40
    REFERENCE PRICES Prices 140 130 120 110 100 USD/Bl 90 80 70 60 WTI Avg price 1Q 09 of USD 43.1/Bl 50 40 Basket of ECP exported products avg price for 1Q 09 09 of USD 33.1/Bl 30 Basket of ECP exported crude avg…
  41. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 41
    SALE VOLUME TRENDS, DOMESTIC & INTERNATIONAL Total Q1 sales increased by 15.6%. International sales accounted for 40.8%, up from 33.1% in 2008 Total sales volume (MBOED) 645 547 558 474 263 40.8% 448 462 420 433 184,5 33.1% 216…
  42. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 42
    OPERATING RESULTS (1/2) Total revenues (COP Trillion) Operating costs and expenses (COP Trillion) 7.22 7.23 4.09 4.18 5.24 3.46 3.46 5.11 2008-1Q 2009-1Q 2008-1Q 2009-1Q 2008-1Q 2009-1Q 2008-1Q 2009-1Q Non Consolidated Non…
  43. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 43
    OPERATING RESULTS (2/2) Non operating revenues (COP Trillion) Net income(COP Trillion) 2.29 2.29 1.19 1.17 1.61 1.61 2008-1Q 2009-1Q 2008-1Q 2009-1Q 2008-1Q 2009-1Q 2008-1Q 2009-1Q Consolidated Consolidated Consolidated…
  44. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 44
    SALES EVOLUTION Total sales (COP Trillion) 7.22 7.23 2.46 2.47 34.1% 5.11 34.2% 5.24 1.72 33.7% 1.82 34.7% 65.8% 4.76 65.9% 4.76 65.3% 3.39 66.3% 3.42 2008-1Q Non 2009-1Q Non 2008-1Q Consolidated 2009-1Q…
  45. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 45
    COSTS OF SALES Cost of sales (COP Trillion) 3.68 3.76 3.15 3.15 1.09 1.17 31.1% 0.93 29.6% 0.93 29.5% 29.5% 68.9% 2.59 2.59 2.22 70.4% 2.22 70.5% 70.5% 2008-1Q 2009-1Q 2008-1Q 2009-1Q No Consolidated No…
  46. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 46
    SG&A EXPENSES SG&A Expenses (COP Trillion) 0.41 0.42 0.31 0.31 0.32 0.32 76.2% 78.0% 0.24 77.4% 0.24 77.4% 23.8% 0.09 0.10 0.07 22.6% 22.0% 0.07 22.6% 2008-1Q 2009-1Q 2008-1Q 2009-1Q Non Consolidated Non…
  47. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 47
    NON OPERATING RESULTS 1Q 2009 consolidated (COP Trillion) 1Q 2009 non consolidated (COP Trillion) 0.11 0.11 0.20 0,20 0.25 0.20 1.87 1.82 3.20 3.15 1.17 1.22 Revenues Expenses Profit (Loss) Revenues Expenses Profit…
  48. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 48
    SEGMENT RESULTS Domestic sales (COP Trillion) International sales (COP trillion) 2.37 0.78 1.81 0.55 0.49 0.94 0.40 E&P Refining Transport Sales and Corporate E&P Refining Sales and Marketing marketing -2.22 2009-1Q…
  49. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 49
    PRODUCE ONE MILLION BARRELS PER DAY IN 2015 Productions CAGR : 12% 1 MMBOEPD MBOEPD International GAS 132 25% 190 MBOEPD 550 MBOEPD 462 41 National OIL 61 75% 810MBPD 427 448 406 2008 Goal 2011 2015 Current…
  50. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 50
    SLIDING SCALE ROYALTIES Hydrocarbon production by field (kbpd) % of royalties…
  51. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 51
    WIND FALL PROFIT CLAUSE Contracts 2003-2008 New Contracts M (economic Payment : Pr Vc Q rights of M = Payment : Pr Vc Q M = ANH) Amount : Vc Q Pr: Price at delivery point (US/BL) Vc: Volume of contractor (kbpd) Q: Take of ANH (%)…
  52. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 52
    GROWTH STRATEGY MAINLY FOCUSED ON THE UPSTREAM BUSINESS Organic growth and acquisitions Upstream Capex (USD million) Further development of existing asset base Enhance recovery factor in brown fields (La Cira-Infantas and…
  53. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 53
    PRICE DEFINITION FOR GASOLINE, DIESEL AND NATURAL GAS IN COLOMBIA IS LINKED TO INTERNATIONAL PRICES Regulation Sales to public price Dec 2008 (Bogota) Price definition Gasoline: USD 3.38/gl Gasoline Defined by the Ministry of Mines…
  54. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 54
    ECOPETROL HAS INCREASED ITS YEARLY CAPEX BY ALMOST 10X SINCE 2003 Capex plan 2003 2009 (USD mn) 29% 6.224 163% 4.824 36% 40% 12% 9% 1.760 922 1.255 Capex in 553 651 USD million 2003 2004 2005 2006 2007 2008 Sol. 2009…
  55. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 55
    Exploration Capex of US1.0bn for 2009 Exploration Drilling Seismic , G&G USD998 mn USD732 mn USD 218 mn 32 G&G Seismic 34 186 2 6.27 No. of wells 8 KM Equiv. 732 24 7 1.53 Drilling 3 4 Local International Local…
  56. CalGEMs Global Emerging Markets Conference – Ecopetrol S.A. – slide 56
    Production Capex Of US2.7bn for 2009 Production capex 2009 4% In progress Investment (USDmn) Direct Partnerships 23% Seismic Activity 32% Main fields (60%) 890 567 Drilling Casabe 32% 227 - 9% Rubiales - 270 Plants and…

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