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Santander Latin American Energy and Materials Conference – Ecopetrol S.A.

Ecopetrol S.A. · Oct 5, 2009 · 53 slides

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Slides

  1. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 1
    Ecopetrol: Making Our Vision a Reality Santander Latin American Energy & Materials Conference London, October 5-6 of 2009
  2. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 2
    Agenda 1. Company Overview Key Highlights Corporate Governance Corporate Group 2. Strategic Plan Growth Organizational Consolidation 3. Financial Highlights 4. Company Highlights 3
  3. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 3
    Agenda 1. Company Overview Key Highlights Corporate Governance Corporate Group 2. Strategic Plan Growth Organizational Consolidation 3. Financial Highlights 4. Company Highlights 4
  4. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 4
    Ecopetrol is the Colombian National Oil Company, with strong operational and financial performance, and is the largest company in Colombia Key highlights Location Fourth largest O&G company in Latin America, Ecopetrol Presence and…
  5. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 5
    Ecopetrol has high standards of corporate governance practices driven by an independent board of directors Ownership* Corporate Governance Code In compliance with IFC, OCDE and local standards Compliance with SOX in Sep-09…
  6. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 6
    Ecopetrols Corporate Group enables the development of the strategy 2007 2008 2009 Exploration and 50% Production Refining and Petrochemical 49% 100% Oil transport and 60% Multi-purpose 35% 65% Pipelines OLEODUCTO DE…
  7. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 7
    Agenda 1. Company Overview Key Highlights Corporate Governance Corporate Group 2. Strategic Plan Growth Organizational Consolidation 3. Financial Highlights 4. Company Highlights 8
  8. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 8
    Ecopetrol is focussed on a strategic framework that will drive us to accomplish our goals GROWTH STRATEGIC Upstream FRAMEWORK Downstream MISSION Integral Management VISION Corporate MEGA Governance ORGANIZATIONAL CONSOLIDATION…
  9. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 9
    Growth and Organizational Consolidation Strategy One of the top 27 Upstream and companies in the PIW* Downstream ranking by 2015 (currently ranked 38) Consolidate an Organizational excellence model of Consolidation business…
  10. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 10
    E&P Strategic goals for 2015 Produce 1,000,000 BOE per day Reserves addition of 430 MMBOE per yr 1 Development of current fields 100 MMBOE 12% production CAGR 2007-2015 Heavy crude, mature 12% production CAGR 2007-2015 fields…
  11. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 11
    Upstream strategy: Achieve a balanced Exploration Portfolio Exploration Strategy Presence in the most prospective areas in Colombia Short Term (2009-2011): Near current production fields Local Mid Term (2011-2013): Proven basins…
  12. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 12
    Upstream strategy: Consolidate Local Production and Diversify Portfolio Production Strategy Increase recovery factor from 23% to 32% Aggressive field development plans Expand secondary recovery in brown fields Further application of…
  13. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 13
    E&P portfolio in Colombia Exploration (17.5 mn Ha) Production (504 MBOED) Short Term Regions and production % Caribbean Sea 2009 2011 Medium Term Central 29.5% 2011 2013 Northeast 25.5% Long Term Mid Magdalena 15.3% 2013…
  14. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 14
    Diversification of international exploration and production portfolio Gulf of Mexico Early production areas Proved basins 2 blocks 5 blocks 8 blocks United states Frontier areas Production assets Offshore area: K2 8.388.619 Has…
  15. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 15
    Production highlights: Production goal for Dec-09 (500 MBOED) achieved six months before planned Ecopetrol Corporate Group Production of Jun-09 was 12% higher Production of 532 MBODE reached in Jun-09 than initially estimated Hocol…
  16. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 16
    Downstream Strategic goals 2015 Objective Current Goal 2015 Refining Deep conversion, clean fuels production and increased Capacity Capacity capacity 300 MBOED 650 MBOED Add value (Ecopetrol & Petrochemical Increase participation…
  17. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 17
    Downstream: Key projects Projects Modernization of Barrancabermeja Refinery Refining Master Plan for Cartagena Refinery Supply 100% of raw materials to Propilco Petrochemicals Petrochemical Development Program Research on…
  18. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 18
    Agenda 1. Company Overview Key Highlights Corporate Governance Corporate Group 2. Strategic Plan Growth Organizational Consolidation 3. Financial Highlights 4. Company Highlights 19
  19. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 19
    Organizational Consolidation: Strategic goals for 2011 Objective Goal 2015 Skilled Human Talent required to Top 10 companies to Human talent achieve the strategy work for in Colombia Reach international standards on Accident Rate…
  20. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 20
    Agenda 1. Company Overview Key Highlights Corporate Governance Corporate Group 2. Strategic Plan Growth Organizational Consolidation 3. Financial Highlights 4. Company Highlights 21
  21. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 21
    Sustained increase of investments to achieve goals Capex 2005-09 Acquisitions 6.224 Capex Organizational investment of 870 consolidation 14% USD 60 bn Transport 4.824 178 2% 2008-2015 598 10% USD mn Refining and 1.238…
  22. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 22
    Solid financial performance driven by operative results Revenue and Ebitda (USD billion) Operational and Net Income (USD billion) Revenue 28% CAGR Op. Income 41% CAGR Ebitda 27% CAGR 5.45 14.12 Net Income 53% CAGR 5.01 3.79 9.63…
  23. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 23
    Strong Performance in Capital Markets Ordinary shares (COP) ADR (USD) 3.000 2.790 30,00 28,77 2.615 Ordinary 25,00 2.355 22,39 20,99 Shares / 2.500 2.505 21,50 20,00 2.110 ADR 1.975 15,00 2.000 10,00 04-Nov-08…
  24. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 24
    Progress in financing plan 2009 Loan facility (May-09) Financing Syndicated loan with 11 local banks Amount COP 2.2 trillion Term 7 year (including two year grace period) Interest DTF + 4% T.A. semi-annual Capital Semi-annual with two…
  25. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 25
    Agenda 1. Company Overview Key Highlights Corporate Governance Corporate Group 2. Strategic Plan Growth Organizational Consolidation 3. Financial Highlights 4. Company Highlights 26
  26. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 26
    Company highlights 1 Strong industry framework in Colombia 2 Leading market player in Colombia and strategic position in the region 3 Quality of asset base and reserves 4 Attractive growth prospects and strong platform to…
  27. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 27
    CONTACT INFORMATION - ECOPETROL S.A. Investor Relations Department Director Alejandro Giraldo (alejandro.giraldoecopetrol.com.co) Analysts Claudia Trujillo: (claudia.trujilloecopetrol.com.co) Silvia Angulo:…
  28. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 28
    ADDENDA 29
  29. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 29
    Addenda 1. Portfolio highlights 2009, Track Record, and Strategic Plan 2. Upstream progress in 2009 3. Downstream progress in 2009 4. Progress in organizational consolidation 2009 30
  30. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 30
    We have the leading market share in the segments of the oil and gas chain in colombia Portfolio highlights 2009 Business Area Current levels (2Q09) Market Share in Colombia Exploration P1 Reserves* 1,474 MMBOE 62% Oil: 67% Gas:…
  31. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 31
    The company 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 O & G company . To a global O & G player 1951 2003 2004 2005 2006 2007…
  32. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 32
    Ecopetrols Strategic Plan Main strategic goals Progress 2008-09 CAPEX 2008-20151 2007 2008 2015 Total US 60 billion Production of 504 MBOED 10 Acquisitions Production 399 447 1,000 International operation in (MBOED) Peru, Brasl y…
  33. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 33
    Addenda 1. Portfolio highlights 2009, Track Record, and Strategic Plan 2. Upstream progress in 2009 3. Downstream progress in 2009 4. Progress in organizational consolidation 2009 34
  34. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 34
    Upstream progress in 2009 Internationalization strategy Brazil: Participation Agreement with Anadarko to explore in BMC-29, an offshore concession located in the Campos Basin 248 seismic kilometers acquired Peru: Authorization to…
  35. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 35
    Diversification of the national and international production portfolio, relying on acquisitions USA-Gulf of Mexico K2 MMUS 510 Colombia Share: 9.2% Production: 1 thousand barrels per day Hocol MMUS748 Share: 100% Production:…
  36. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 36
    We continue increasing our seismic and exploratory well activities Ecopetrol Seismic Km 8.880 1.500 5.633 3.773 2.481 7.380 1.670 1.988 855 249 1.739 30 2004 2005 2006 2007 2008 Jun-09 Meta 4 2009 Pozos A-3 Nacional…
  37. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 37
    Solid and balanced reserve base Gross proven reserves (MMBOE) New gross royalty reserves (MMBOE) Oil Natural gas Extensions and discoveries Revisions Acquisitions SEC NA NA 1,558 1,499 1,385 RRR 199% 31% 110% 1.748 1.601 1.611…
  38. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 38
    Attractive exploratory position in Colombia Exploration contracts as of Dec. 2008 Number of wells and seismic activity Ecopetrol has exploration contracts for approx.17.5mm Ha Number of wells Seismic Kilometers (000) Ecopetrol has…
  39. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 39
    Focus on maintining production growth Production growth (2008 vs. 2007) Projected growth 12,0% 7,1% 9,2% 6,3% Current secondary recovery rate is 23% 1.000 4,3% 3,1% 1,3% 0,9% 0,5% 190 447 -2,1% -3,4% 810 85 -3,8% -6,2%…
  40. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 40
    THROUGH DIFFERENT INITIATIVES WITH OUTSTANDING RESULTS Development wells Number of wells Brown fields average daily production (MBOED) Stand Alone Partnership La Cira Petrolea y Sardinata Yarigui-Catagallo 618 Casabe La Cira 35…
  41. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 41
    Addenda 1. Portfolio highlights 2009, Track Record, and Strategic Plan 2. Upstream progress in 2009 3. Downstream progress in 2009 4. Progress in organizational consolidation 2009 42
  42. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 42
    Downstream progress in 2009 Acquisition of 51% interest in Refineria de Cartagena closed Progress in Cartagena Master Plan cost synergy analysis with Refining Barrancabermejas refinery upgrade 82% progress in Hydro-treatment project…
  43. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 43
    Refining Deep conversion, clean fuels production and increased capacity MEGA Capacity 650 Barrancabermeja Refinery KBPD Hydro-treatment Plant Industrial Service Master Plan - Jun /11 Refinery upgrade - Jun/13 Cartagena…
  44. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 44
    Transport and Logistics Guarantee the logistics to make oil, gas, derivative and biofuel production viable MEGA Revenue from new Key Projects business US 128 Million The transport system to evacuate crude from the Eastern…
  45. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 45
    Biofuels Ecopetrol will be the leading producer of biofuels in Colombia Biofuel Production Projects MEGA 450 Kton/year Ecodiesel Biodiesel Plant 50% share Ecodiesel 100,000 tons/year of production by the end of 2009 BioEnergy…
  46. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 46
    Petrochemicals Increase participation on the national an regional petrochemical market to achieve maximum added value of gas and refinery overhead MEGA 2.700 KTA Supply 100% of the raw materials to PROPILCO Petrochemistry with…
  47. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 47
    Gas Consolidate natural gas as a profitable business for Ecopetrol Development of Gibraltar treatment plant facilities at (30 GBTU) 50.1% progress MEGA Cusiana LTO2 (70 GBTU) and Cupiagua Gas Plant Revenue 1,100 GBTUD (140 GBTU)…
  48. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 48
    Modernization plans Barrancabermeja modernization plan Cartagena expansion plan Current conversion rate < 76% Modernization plandeep conversion 95% Increase capacity above Other2 Heavy crude Medium crude Bottoms Medium distillates 1…
  49. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 49
    Downstream progress in 2009 Refinery Runs (MBOD) Gross Refining Margin (USD/Bl)* 233 8,0 214 (92%) (86%) 79 (98%) 79 3,4 (98%) 2008-2Q 2009-2Q 2008-2Q 2009-2Q Barrancabermeja Cartagena Refining Costs (USD/Bl)…
  50. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 50
    Addenda 1. Portfolio highlights 2009, Track Record, and Strategic Plan 2. Upstream progress in 2009 3. Downstream progress in 2009 4. Progress in organizational consolidation 2009 51
  51. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 51
    Progress in organizational consolidation 2009 Plans for technical competence development completed for 100% of employees Human talent Work plans to improve corporate work environment Strengthening of leadership style 5 year…
  52. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 52
    Improving environmental, safety, and security performance Environmental incidents Accidents (per million of labor hours) 112 5,8 88 59 56 2,6 41 1,8 1,7 0,9 2005 2006 2007 2008 2009 2Q 2005 2006 2007 2008 2009 2Q Stolen…
  53. Santander Latin American Energy and Materials Conference – Ecopetrol S.A. – slide 53
    Comprehensive Management Model: assurance of management quality to obtain sustainable results Excellence in Management Operative Excellence Internal Control Nivel de Madurez de los Componentes del SCI Comprehensive certification of…

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