Ecopetrol (EC) 11 May 222022 Q1 Earnings call transcript

Good morning. My name is Hilda, and I will be your operator today. Welcome to Ecopetrol's Earnings Conference Call in which we will discuss the main Financial and Operational Results for the First Quarter 2022. All lines have been muted. There will be a question-and-answer session at the end of 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 Bayon, be are Jaime results call. Thank may no assumes future result, call led Mr. begin on Mr. by different CEO in The and CFO. COO; responsibility that from you Consuegra, conference. Bayon, the your Caballero, your for

that to historical following for morning, quarter am issues. by of results and welcome of announce we call I underpinned the the this to continued our during Good financial some quarter, deliver first results the of XXXX. everyone, to conference proud

we which first the conditions higher than First, barrel per positive average price in shared $XX industry brent is XX% of of XXXX. have with in quarter, an the quarter the

Second, TESG to with our us third, and inflationary efficiencies value mitigate efforts with capture savings And helped on commitment our for clear that our pressures. a sustainable generation stakeholders goals. focus company's the

to income that recent have approval and The a amongst the dividend payout years. XXXX I would the like months COPXXX a corporate the XX.X% our the bylaws changes the shareholders at the bylaws two extension members' our represented XXXX. to four period introduced and of in of for AGM, Transforms. net of ago, to named year same highlight meeting, COPXX.X a governance to giving AGM few company's approved of from of continuity the which announced Additionally, the of Energy a aimed were which we trillion share, others, included changes Board strategy strengthening in the In of per some to equivalent dividend the the yield XX%

public oil April recovery barrels, equivalent on and and year quarter the All equivalent some current production for in for continue the steps first production XXX,XXX In barrels was of the The whilst terms we after per order year, barrels the beginning production reached at oil per of in this path. and challenges the XXX,XXX decisive of day, of equivalent operational and the an March, of the year XXX,XXX XXX,XXX aligned faced take production of day. average XXX,XXX per with we day. target barrels to between

for the associated will to prices Spanish, plans facing Jaime evolution and be or terms in investment call, to higher increase of the challenges later in it receivable we that our with capital Although none in account the fulfillment of on related requirements FEPC are and fuel whose in costs business is working fund explained and of detail this by important the compromises impacts this note XXXX. stabilization

success in to in I strategy. on next transition, go highlight important El well the the with Tolima, declaration following: the the the pillars We Slide. Block the In started with strategic of of Colombia. the energy to exploratory our XXXX the in growing the Boqueron Nino-X want Let's pillar four first, located of year milestones

efforts Santos six our the potential blocks with were in exploratory in Brazil in we Basin in line new Second, located basins. exploratory awarded high

management TESG generation reallocating environment, of following. highlight pillar Invercolsa divestment active as through portfolio XX.X% part with by objective the of of the capital Third, within strategy want our energy of transition. of our of participation and for the governance, technology I the social value our the In to authorization Directors of Board the in

COX forest to the biodiversity against protect committing grow Economic tons compensate to trees climate contribute XX by initiatives hectares XXXX. and trees the of World Forum of XX,XXX by change, trillion First, we million and joined the of equivalent to X fight protection million X the

we Second, peers to XXXX from our S&P the standing the advancing Sustainability commitment Yearbook in for second out year on Global consecutive ESG were included issues.

to from will Third, of in we delivery emissions in the of consolidation of Fourth, Integrated line Management with in released operational our locally what increased and we be transition. anticipating the second significantly the number sustainability to Report of metrics with our our first highlight and energy report. XXX XXX internationally, the the and report. XXXX the both required the start-up would objectives value, electrolyzer the improve low in The aligned I of refinery of of produced environmental year. the energy hydrogen to The commitment solar of XXXX the Sustainable be use SASB Colombia like hydrogen feasibility disclosure and produce green the information to portfolio the latter, reported for XXX to and capacity green production from being today performance located the with Cartagena the some in generation the to used coming This equipment hydrogen which refinery the will that produced technical assess fuels this us to per quality in XX-kilowatt technology. at pilot used and for gray we the kilograms with hydrogen. allow is a will continue hydrogen panels. pilot X,XXX In

of the of Finally, be that and we operations, of water the by pillar, our XX% discharges reducing of [indiscernible] in we remaining knowledge our capture. edge cutting we compensation elimination to into the the bodies highlight. neutral announced capture in of In the year March, mainly XXXX use water water pledge XX% by freshwater

industry. oil Amazon are with Accenture for to and we with data open and Services First, platform an the alliance gas in use whom an efficient water developing Web management the

[indiscernible] the Second, technology the social, governance in and with InnovaTe use economic, environmental and of which the in operate. to efforts seeks launch innovation we to program version of that the the strengthening territories seventh of the support

with the Third, the of the one the a will MOU the which a create start progress to to transition center such petchem in of innovation approach the with Europe's flagship solutions of industry energy Tecnalia of hydrogen technology as center. in we and research and and items the center. Caribbean challenges Fourth, Cartagena, energy project tech of consolidation the key in the technological development signing of with made ecosystem the

returns Finally, few a pillar, I in competitive like to would highlight things. the

First, of margin operations Permian amounting EBITDA the in first our an EBITDA million XX%. the of results obtained to $XXX in the financial and with in quarter an

operations commercial Ecopetrol close first for located the Trading Asia of Second, oil. by barrels crude in million Singapore X.XX

efficiencies. And maintenance, optimizations and efficiencies dilution from to to for amongst the of milestones these Third, want every lifting and the the opportunity petchem COPXXX of I cost in of thank billion initiatives achieving Ecopetrol workovers, outstanding in margins, resulting in each improvement others. in take strategies, employee product the terms

slide, I currently discuss to and challenges market these where want in environment the Ecopetrol. Let's what opportunities we the to that now next represent move to see the and

the our our which to in Although the projects. and delays generate prices of higher generated pressures on oil of in price energy some have international also has of the pressures scenario logistic challenges crude international and inflation, increase operating terms chains, our contributed results, costs, in times of costs execution

mitigate OpEx Barranca associated a was higher a and and for the the the consolidation We maintain of in attractive measures. Guaranteeing critical such to and the focusing a to on the domestic the refineries efficiencies, their segments. tight impact to competitive national relationships domestic our from operations level new on in our required fuels The maintenance said products monitoring of at even with relationships The on due demand. continent, volatility of supply consolidation and crude new scheduled efforts strategy order volume strengthening of strategy realization limiting adoption to factors that indexes of the the both a imports CapEx of have in there seeking with supply contracts worked in our clients through Cartagena. systematic products represented projections Having as This third-parties. the in under inventory increase to seeking volume to the scenario. situation, the the as actively different in structure strengthening commercial to trading decrease inflation. with decrease as in an this, supply long-term of of our our -- exported for region; lastly, following of prices The prices And operations. all commercial mitigate mainly market developing indexation demand for the levels contractual continued impact in Asian well price the the

the in gas increase talk performance businesses. As I give mainly increase quarter. was main gas, the of the Alberto the for about the growth market who in small to floor will in regulated its to quarter due previous the to operational compared for consumption in Consuegra, higher want now reflected the and results households to economic

Thank you, Felipe.

confirmed the by of Boqueron Nino-X of Nino-X partners, degree with the of along wells of in discovery located department the During the exploratory XXXX XX crude Guadalupe Colombia. the success Formation quarter by in seven Tolima finding operated Perenco drilled oil. we API the Block, first appraisal El well, The in El extension our

well Concerning wells the quarter the and of corresponded Ecopetrol sealed approximate average. XXXX, of production of the the of in of to the the equivalent at meters equivalent seek was oil Santos of barrels second represents of position Brazil On and Colombia southern XX unlike and to Gorgon-X, XXX,XXX Pilonera-X Cupiagua exploration activity, We the where the coast concession extent This from vicinity well is back and discovered for Caribbean March the production operated The formalized XXX gas verify XXth, first day the S-M-XXXX two of region exploratory of reactivation field. in La Gorgon-X the extensive a Llanero being in the gas. XXth, in at crude the well barrels hand, abandoned. and department initial the in area exploratory strategy located Ecopetrol XX% end Palomino the offshore Cupiagua basin. step XD XXXX, search in with Piedemonte the of to X,XXX of oil by reached the the kilometers of in Municipality the from first of wells we simultaneously, well gas oil depth spotted. tests and On the contract sands quarter Guajira. the of international highlight exploratory was of on block, March per other and drilled XX located in on cumulative Uchuva-X the which XX% to an in the the

to Ecopetrol during this XXth, of basin, permanent blocks offer Brazil. ANP were offshore the in awarded same on third held April Additionally, six cycle the

to plant autonomy, the beginning a with year upstream more the commercial due for vision integrated for Presidency, reduce the from XXXX segment and exploratory including Ecopetrol production, exploration, to the the which Shell, gas to Cupiagua in on at XX%. blocks stabilized partner subsidiary and XX next and please Capachos XX% and the Slide. have move the equivalent had the remaining in over stake is production Ecopetrol maintenance we April, the Our time execution With will of the order upstream have to we efficiency meet barrels in to the subsidiaries, guarantee oil greater the impacts Brazil. and participation, By new at market of segment, creation been On mainly operator, some model associated production, the synergy per finding an this March XXX,XXX drilling, and of day. operating some higher Vice Yarigui, of Can will first projects CPI new has CapEx the to a hydrocarbon. challenges Suroriente Group in now to fields. the the strategy, blockades In seeks regional

oil the that said, the out million in in line these the day. plan to for progressing the year. contribution It The balance now line in for organic with an a quarter project are the is of with activity accordance business of goal set amounted set. the the announced Group, LPG in the significant and per highlight average important with As is barrels are the XX% XXX,XXX the with of during of the Ecopetrol with investments and quarter production and fulfillment plan total $XXX gas and Felipe reaching production to first segment the we equivalent

mainly XX,XXX to equivalent the claims regards achieved operations of corresponding net we before with results diesel Let's security the the be an presented the within Concerning for ruling of Colombia, production communities impact are of appeal back perspective, related regarding reservoirs day and advance progress of pilot of including and barrels transported suspended per projects, Barrancabermeja quarter crude and other X.X plan. per why has barrels of of of natural on Slide. to The year's March expected for the million activity XX,XXX the year reviewed of line Environmental environmental greenhouse quarter of pipeline. year, of equivalent unconventional associated energy in the presented go of than barrels barrels of XX% with The relation the move the Ecopetrol the Ecopetrol unconventional projects. XX,XXX replaced of entering previous is country. to compared Llanos respect more With to dates oil to license gas study, and the of the convinced terms that gross the the Nare term. the the the From project, activity we system was to the completion granted of in barrels the to the legal were in filed from scenarios importance to emissions stakeholders water for are up the third-parties concerns the the the with That Kale the with half Vasconia will activities the increased the Association the project. in oil compressed an hearings environmental the Permian refinery the total than first capture Basin, of reached oil the used We royalties. in With and the for reducing waiting project the the are were Ecopetrol, in by reservoirs environmental on which please. this to in per year. that Barrancabermeja recycled In In Platero Please day next slide, license once day, to as second the we the in Authority force in the by the disclose February was ANLA volume doubts license, the the communication is next additional crude of first involved. by XXth. more resolve and oils into from entry

products operational largest Colombia. of in March increased storage as volume diameter being ring of XX barrels of the XXX,XXX the other roof a by XX day, capacity refined X,XXX first barrels construction involve hoist of workforce. at high the active geodesic quarter compared Pozos the the with To quarter by XX of this the representing using geodesic meters the On participation and the completed year. This tank terminal, has hand, tank to tank nominal of XXXX. of meters a the in was built The the XX% in same of system of women, the of built construction the transported Colorados per the increase tank capacity

of With the to station, refined increase reaching oriented due of barrels the up in the the was products the to of transport with of possibility area. of through department pipeline X,XXX a goal the to the and construction per day gathering per barrels the X,XXX demand day Meta Apiay transporting in fuels exceeded truck

costs significant within a the XXXX. the during the use generated benefits economic oils Apiay dilution and Finally, Cusiana clients service in Ecopetrol co-dilution enabled quarter in representing as crude projects LPG facilities to of diluent through assembled and savings plants. for Group This the first

record last the on EBITDA to trillion, on of of since Downstream margin were the logistics quarterly please. five discipline, the stronger per on These control. results years in product commercial and leveraged of versus strategy, efficient planning Brent, financial the $XX.X barrel. inventory The reached gross X.X% highest the its integrated highest margin move next XXXX, segment integrated results Slide, at cost reaching EBITDA refineries the optimization COPX.X chain, basket Let's and a

the the a XXXX were ensure records first with currently performed state and the as supplying of the operational an throughput the force national in asset Barrancabermeja first been the the plan. During impact a This We an year, for gross production clean XX% a within as recorded the reliability quarter, acting both XXX XXth, and the Refinery, anticipated of trend HSE values refinery of polypropylene the national propylene, margins Cartagena due the the the final has fuels of Esenttia, industry distribution intensive for of in results of of country performance. assets, grade of well refineries increase realization raw the billion level scheduled availability outstanding maintenance with to in On quarterly quarter level quarter. demand The along per to supplying successful the the and COPXXX economy. the positive and celebrated execution the for refinery shutdowns reached on historical $XX.X barrel. between higher. as deliveries leading a reaching by products shutdown had material regions EBITDA of continues current of anniversary in of the cycle February the margin strategic for the increase we which In a petrochemicals refineries for

Slide, please. next the to move Let's

of efficiencies within we services, experiencing year, and on managed of maintenance mitigate that end to the cost higher by lower In savings achieved increases competitiveness of the barrel dollars. exchange as mitigating pesos rate in impact transported, global due XX%. the to positive a volume inflation the quarter effect on inflationary as have offset unitary to cost cost strategy well COVID-XX which first higher a infrastructure to as to has billion, achieved At associated restrictions COPXXX The impacted the XXXX, economy experienced comprehensive the of oil operations an pandemic release the of XX%, COPXXX after lifting with impact in mainly the the efficiency and purchase of billion of increase During related in materials, were Felipe. the relation mainly the in and the costs increase associated compared focused increase by as per COPXXX to for the the were of energy by re-expressing prices more mentioned cost previously quarter than of transported, grew an first Inflation EBITDA of to the billion of inflation. by a energy. effects a with XX%. by The on EBITDA Group's strategies effect have is tariff, the

oil Our increased cost reflects total main reflects the floor on our product prices who on of financial It of Jaime component higher naturally the activity will of the effect the costs. of unit now the also the Group. effect Caballero, give to and the about I Brent crude talk imports. fixed results Ecopetrol

Alberto. Thanks,

For stand the to fourth a XXXX, closed at Group's XXXX COPX.X following record quarterly net the the quarter result, aspects quarter high compared income first out. trillion, results, the

the and Firstly, in margins, in with excellent in operating EBITDA refining environment, ISA's efficiencies. stronger increase for line operating a price COPX.X and contribution, trillion results COPXXX a financial outstanding billion Permian

despite refineries, higher its units a All maintenance Fund Spanish product some inflationary addressed working global the in ongoing strong mainly Asia. higher or crude for and acronym from capital FEPC oils requirements, imports, of in increase in receivable supply by both of Price in accounts pressures, on Stabilization the Fuel rise to that, competition the driven the

of XXXX the per results closing non-recurring reform the year. crude prices Please business, move the onto the gas EBITDA and let's provisions XX% main oil higher an ISA's tax first sales to income barrel in represents rate the quarter Amongst to metrics economic the Rydberg financial from of contribution, Ecopetrol result last decision trillion, taxation tax which the events for explained nominal products write-off the due following $XX.X, by approved Secondly, per technical which its barrel increase the stands COPX.X as to Slide to higher exclude the a due $XX.X the of and of XX% out as the at see in of versus analysis. thirdly, next basket. KPIs. increase And feasibility an relinquish of development and to result, a project America stronger and

in at in non-recurring in $X.X will the increase result $XX.X Brazilian barrel, at due This tariff increase in the of first a operating as contrast A of plan. ISA's like the Amongst of volume quarter financial higher EBITDA purchased in in result at ISA's variation quarter income which on expenses. and projects higher realization quarter other of the as XX.X%. higher revenues EBITDA a subsidiary others. closing in double-digit and refineries a positive would network company's into basic line ISA's some incorporates for by The of in of to and be the a margin reduction with and the level. costs XX.X% a excluding first lower the the breakeven per above is impact closed royalty, to by operation first XX% periodic products, recorded was and of XXXX income, taxes review growth transmission the prices an by throughput represent XXXX quarter I Brazil equity crude driven highlight levels stands best in On closing entry partially a benefit KPIs, XXXX results history. the system mainly macroeconomic by continues of associated net result an among the latter products at energy consolidation below of to higher oils in per in explained operating the the out and operating [indiscernible] registering driven construction margin The existing our our to This barrel, hand, following historic first variables a and revenues, Colombia. to an to employed. Finally, the offset capital consolidated adjustments increase in return operating

At to discuss stronger with provides to EBITDA flexibility Ecopetrol of far of the most so Ecopetrol let's been. position. and electric registered indicator highlight of EBITDA quarter the of jet position The stability like transmission especially an ratio, X.X with Group's X.X aligned below record, and greater gasoline, trillion. likewise, operational Slide Fourthly, which positive contribution are providing differentials the products, Roads performance. by for greater setting EBITDA This year financial to the movements participation year the gross diesel the noteworthy, a on segment a times power by the historical closed XXXX, COPXX.X market of the and the go thanks remains end. times cash at Toll to next and the first cash Please downstream generation. I'd the particularly to segment, results cash growing end by Concession to debt have explained Thirdly, relevant

with trillion XXXX. account cash operating the quarter balance billion flow the first FEPC generated that during COPX.X associated of COPX.X of from pending of the receivable excludes Firstly,

increase of with the investments, the of higher CapEx investment larger in trillion, outflow hydrocarbon with first quarter business workovers COPXX development and the organic versus drill wells COPX.X Second, level highlighting within mainly the to billion. efficiencies due for a XXXX

mainly amortizations interest trillion dividend and payments and COPX.X non-controlling made lastly, shareholders. subsidiaries to for related payments COPX.X for by trillion our debt Thirdly, to

price General current conflict Russia to this the government of combined to Ukraine, the accumulated the inflationary volatility following fund dividends is Please uses approved businesses. and Fund The the Meeting is that to COPXXX let's we March position. by Stabilization XXXX as available payments This than can formula by the caused XXXX international of the reactivation GAAP of the Ecopetrol per and crisis. fuels made, crude this there the the the Currently, obligation local COPX.XX post-pandemic the get and between this application Through consequence to budget on and date, the diesel. one of move nation access of international recognizing or by that first in implementation balance will and differential margins a prices The favor in a Price differential sudden as COPX.XX discuss regulations households The XXX% was an be international can the such realization supply year. current the price from the for and and out gasoline periodically for established Colombian in allows the for the mechanism may of cost, and references payment to payment December Regarding the less inflation due prices effect XX, if payment of created outstanding that in between honored the Slide the by government operating implies to and and reviewed the seeks potential Colombia of the of on Mines scenario stabilize its and and and mechanism prices but were a quarters in mitigating has XXXX periodic April trillion first international by company's funds Shareholders' on fluctuations for prices payment government the to of that The and growth. in Group last installment in confirm consumers the Ministry impacts cash prices fuel mitigate made trillion. for share, establish of the the Energy, shareholders the Colombian Group, purpose. dispersed have next can the not the Fuel of balance minority accounts and economic the on second generate the do market a economic with this XXXX. the international was impacts specific within is periods international product of settlement the historically, national rise FEPC

receivable of for its today, outstanding currently of trillion half COPX.X liquidation. Ministry the of including account the As Mines balance of trillion the balance the the COPXX.X of second amounts by of XXXX, under review

about given XX% by recognized clear total with having rest of Ecopetrol respectively, the bank income went company relevant income and and while to entities the and working of The XX%, territory the volume the bank government cash the sold exports XX% of diesel. accumulation of recognize XX% with of Colombia Of end a levels Ecopetrol and exempt is accrued objective gasoline account corresponded diesel, together has gasoline XX% therefore to each local winding barrels products of of XXXX, to is quarter sales of current the in percentage national sales receivable and pay. subsidy. balance the the both For sales been receivable consumers. to the of first of to sales price of a of that a corresponding

the extent leverage Journal Ecopetrol budget April the its announced service, Any XXXX we tools this on comply liquidity the metrics debt is higher the then estimates Government temporary liquidity with have potential activated and compromising a outstanding full investment maximum account XXth the the current using those mismatches. the XXXX of the goal that sum of plan, released inclusion plan with National in such budget. to We estimated deficit strategy. different contingent the consider the of to debt in and budget that receivable funds of Minisitry this in for Additionally, not National dividends will pay Finance financing excess statutory marginal situation and commitment the sources and as the

In addition, our new the prices. path on pricing proposal convergence with for government decree a Payment publish announced its a a to intention draft terms methodology. for

is can in to on that cash to areas certain now floor controlling out carrying operational of additional frontier it for Finally, certain important Ecopetrol analysis sales that remarks. pass and as I is alternatives closing restrictions the imports. such note his protect Filipe

Jaime. Thanks,

some to concluding, points like emphasize I corporate about governance our would practices. Before strong

mechanisms. aligned commitment the are the corporate definition policies an the every governance are of of fundamental the as part several I Group the as policies our enable designed are professional of have mechanisms key stakeholders policies ensure layers cycles its and the maintained. the shareholder it's a to of -- to and for decisions long-term whole Our of for These protection, governance and has reliability allowing strategy. been stability. In protection transcend strategy part company's highlight It's organization. all can corporate way, the Ecopetrol's Ecopetrol strategic the consistency of implementation the and and elements like the value decision integral be making governance to world-class that to and making The cornerstone is time. the would following process. other and its corporate a Group management this to governmental seen with

skills experience the Board and Directors. for policy the succession First, of the of matrix and

the shareholders. and nomination the minority producing departments Second, and gas by oil Directors by the two of

the map Ecopetrol other three The value Group that responsibility current least the with for goes the Fifth, which year a Board for And in CEO. situation, expectations all and regions for operational clause for began operate, historic In the the law. continues present Please of to term. our policies Third, financial out maintain Strategy. with of the line required and turn XXXX the and the Colombia in the sixth, first Slide our its financial, all countries greater in of both demonstrate independence in senior beyond Board and objective resilience and in to in closing members in with we the which technical, the management. commitment Fourth, succession to of the stakeholders. strength. by succession with directors at view generation line our shared the This we're for the the line remarks. program profits social next talent record in results and of next set in

We to opportunities changing proactively are capturing of our while meet different challenges initiatives the value macro-environment from environment. to committed in the the managing

you We plan. our floor for in focus our today outlined interest to continued targets you your open continue our now conference again us with call. on in business and joining will to to for this in competitiveness the I Thank work Q&A Thank Ecopetrol, session. the enhance the

you. Thank

We will [Technical [Operator now begin the Instructions] Difficulty] question-and-answer session.

right the now. or [Technical Difficulty] the complying plan with times

something is the that awareness, it levels. particularly affecting be anticipating control, our plans by production with prevent other something Cupiagua and not of we do operations, piece managing to whether that something of heroes has some to that one the -- it's social and the The our about in you -- can other of in is mentioned we terms payment now that is can one, but is right LPG as affect production the unrest, believe our is

kind us margins. first the or we next have very of in truck With in very to XX% year about year, the the refining three higher forecast of it help of That our help are picture that's will with you very terms to regards both completed we That to of prices maintain quarters. in as that in outlook, we rest diesel margin to to during terms strong. I we will strong have that expected margins tell in activity. the maintenance planned strong remains gasoline production. quarter means see of So of where the see this throughput or a going which maintain refineries, together the

approaching Thank this. question. left to view Bruno, where FEPC good you holistically broader going you, going question we're I'm bit up Alberto. some hear of cover to to your give little And I'm how a pick with you, to

COPXX.X first mentioned end the balance my remarks, second first XQ, year. essentially as and XQ year trillion, last firstly, year, due of quarter that the the quarter half covers the this I in of of balance the at this of of the is So

which that's a trillion. the going that's or accrual balance is us to trillion end by of between COPX far, a month year the at accruing up so we're COPXX give to COPXX rate per going about having of to that being trillion are rate We take end to take anywhere the

I due vocal recovery there’s fully the made the of I so how the knowledge. it. number over is public The stating Ministry confident of protection publicly here, of Finance as is going the that been so statements clarity have addressed. in about we months. far give recognized has lot that are about public We has this as particularly, balance be Why? And elements think of balance. well and three Basically, with been They of this discussions last this to a Ministry am of

thing the my budget that I and around remarks. from balance there under surpluses that talking is there of about this the clarity is government funding first year -- having is versus We're execution the plan. The mechanisms are existing for mentioned in the the essentially material where

also higher they Secondly, those they're having revenues that than anticipating. were much tax

into surplus there versus budget opportunity of a next plan of that some this had. Ecopetrol include the year accrued is Thirdly, dividends the balance of window plan. of there the fourthly, And terms original year's to is in they

this very are can So addressed government the avenues by by be which clear. the

That's international Ministry prices. and government lot joint The worked. prices convergence the that's us the other and Mines of Finance Ministry being for a gives element with that of is something of announced that between has a prices confidence roadmap the of domestic

the funding with We think that effort And as decree that of address into give to thirdly, greater that are of sources release technical to the regulation to also intent part going of well payments. of is is detailed future announced a its we and that clarity underway. well in providing around government timelines conversation as terms the options the

to Now, announce regards currently periods. specific the earlier practice. with And recall happy we're timelines, want XX-months have to over going accounts signal to news. the a approach. clear that -- with historical Government were Ministry that your but the is to be specific is agreed regulation the now. these very Mines Again, how timeline, basically -- believe this historical another question balances actually this that the National we here been this very not of around are has this That progressing. is all -- to we We signals as that from there I'm It good this is maximum that actually FPEC detail about week. for of the quarter third in for believe working has is strong is In that's are of XXXX I recognized XX-years this, and within with practice line been that place a

historical recognition consistent in to therefore half that the second of matter. of debt in expecting answer So near a in are balance year but I know of I that on you. of I I -- hope lot this, future wanted we a where very with the long last clarity we're took give practice. this to kind Thank

Thanks, we and Jaime. subject it's much us know very that color provide will relevant a And that I relevant timely. absolutely it's around think context and

to So, next thanks, thanks for Can And go we the Bruno. that. please question?

you. Thank

from from comes ahead. Anne question Bank of America. Please next Our Milne go

and to we the I ask and on your congratulations what results for expect a strategy different, on you can you. maybe quarter. your and good production plans going much investment this what are wanted hydrogen Thank maybe there little something and very you Thank future forward.

have the call good to Thanks, you in and here Anne, today.

to one and you in to of she Baez, ask ago. visiting the today projects days world from of a Chile Yeimy actually in came largest going know. I'm back She Rotterdam So the happens hydrogen be who is couple

So lots of things happening hydrogen.

us? help So Yeimy, go can ahead. you Please

your Anne. Thank for Hello, question. Felipe. Sure, you

was we last Committee good approved to companies around strategic are and Board is develop Directors different December. the of our with So entire in plan Executive in different for in the but willing you projects hydrogen our Latin down of by that know terms Ecopetrol last also, news work defining Colombia year were group world in in the order to The America. that

to the choose been in couple have a of will weeks. in announced partners for We Ecopetrol a that actually be process right the

We focused are main now three workstreams. on

our with related is own of one our decarbonizing refineries. first in production The hydrogen

is our grey XX% So emissions currently XXX,XXX tons today hydrogen technologies and in incorporate XX% But per beverage we is will to because the low COX around that help of technologies, that in us Colombia. capturing want we to downstream selling course, of abate actually and year, of that segment. we emission COX industries blue produce hydrogen are the

projects We're Colombia hydrogen objective locally. demand the think also third we help there Second, of ammonia, position develop hydrogen-related is is us. their products it are ambitious in other to as country potential we this the the in I in to EPOs, and working we are Colombia willing kind that future with seeing avenue markets. hub that for and of companies located are hydrogen-related seeing Colombia, mobility -- to sustainable green is are our growth in most and an these that sorry targeting -- exporting get to for the ammonia, And

deployed future deploy scale moving summary, the million, we are very and change first to industrial have is changer we for the be challenge game This be for we projects to in we actually worldwide Cartagena want part of is There an that in is Colombia. fast will $X refinery and a something in in industry. actually about the a So, plan pilot investment this that XXXX. in located energy Ecopetrol, our in

the Anne. Thanks, Thanks for to go update, thanks and Can please? we next question, Yeimy. the

you. Thank

Please next from McCarthy from Our Andrew question Capital. Credicorp ahead. comes go

for and day, Good to questions. opportunity presentation, the Alberto Felipe, thanks, the Jaime, ask

billion $X.X billion just year. on goal obviously the you this Firstly, ask the wanted have execution In the $X.X year. of the plan, to this to CapEx business for of evolution for the

slightly shy quarter for first figure billion. Just looking the in coming of at the $X

point reaching -- government So, a was on very just re-calibration mainly current the up soon, assumption in -- business? the you're of some between something expecting plans halfway sort you're much. the mentioned seeing COPXX that, Fund plus months? is Jaime, any the this where segments seasonally we with of all. in is amounts is then, are you're that approximately or the different number that scaling remaining of kind the aligned of should And the about That's maybe about should terms year of brief thinking connected the to and And So, very maybe year in of me, of repaid of a have net for be or of the Fuel then, focusing already lower sort you Price of by see you if just whether billion wondering of been talked what is nine else recent the maybe what CapEx. billion in for year? based follow-up of Stabilization the we balance CapEx that on already bit with that still just coming I read little Thanks sort on Just the into taking that just year, the something months may that to that's accrue quick COPXX guys. that it range there, that you wondering, back to

thanks and Andrew, Thanks, for question. being for here. Thanks your

Alberto? then Alberto Jaime take going to So ask on on one and expand to to CapEx the first I'm FPEC. the

morning. quarter quarter Group. good seasonal. again definitely, in Ecopetrol first something CapEx it's much at to the very every Andrew, with line execution, the Felipe. plan see Thanks, is for the this With regards that and you year It's

in when we correct the we've set, of we we in delivered activity plan what quarters. midstream We that actually at the next hope the the -- sold some, and to both upstream. the we delays have terms some let's activity that for While downstream look say, in in

the the it highlight plan. this seven about the had that highest in was of we had is XX% first we and level to of during execution what Something in last years quarter

on in changes segment. $X.X in we yet in range between or CapEx, are be in XXXX of we alone every the billion any and see don't execution in $X.X to So, billion terms official

mentioned, man. rate to that on are referring trillion so question refers that's Alberto. you, COPXX you, to to I month trillion I'm is range the hear on Couple depending to I'm COPXX COPX your good Because to right? of trillion that projection pesos accruing a projection the to. FPEC. things, basically Andrew, going XXXX behavior, what's in about take, question essentially basis trillion COPX.X of Thank every your the we Thanks, what and accrual, of

three I it of depend think clearly projection of and the the months around ahead uncertainty us, there forward a factors. going will number is on that

Ministry formula. course, adjusted, in element the the to international I upward. a a formula. can a think, of strong third of behaviors prices to the factor evolution create massive is exchange The domestic course, It that expecting prices of between gap are be you expecting. are degree in will, is factor And prices convergence the this something It's Thank going the pump. hope we which and are of international is the the which I rate something of that if we're Finance Mines the to part this, path, it's has helps. domestic bridge that as Ministry you. and prices announced of the at

Jaimie. Thanks,

Andrew. Thanks, Do we any have more questions?

Thank you.

UBS. have question Luis from from We Carvalho a

questions -- really the also level Sorry, two Basically you the very Hi, question Luis? days A -- - HCP thanks and ago, end. the Felipe for provided. We Bayon Couple Luis, can my guys taking presentation. everyone. for we that of detailed from Thanks appreciate

Yes.

you about the We barely speak can Can try we microphone, please but Sorry question? the ahead. go closer you. get can hear to to that, so

it better this better now? now? Is Is

ahead. Go Yes, better. a bit little

Okay. now? better it Is

ago couple of a -- So days

ahead. Luis. Yes, Go

announced governance change energy capital allocation, second dramatically in one the the the The by its industry from So I the towards investments most case on the see Colombian the stating wonder of its the as mentioned the think five can I report we to about diversification? impacted a country? policies of the in the one you for government Colombia within independence course, relevance, company the to wants portfolio you energy and how provide that proposed operations landscape a goes if presentation just the the think protect on years perspective be lose the And more dividends X-Ks and Ecopetrol's due published under XXXX, back on would and we we ongoing and color of you company, of the can acquisitions bays. how dividends you. in Thank should that that will ten right? potential

first one. take Thanks, the Luis, I'll and

material, point So some context one. and is was your of but in a already terms relevant the very in of energy independence and I'll this the think of give included you some I

in the of gasoline we and is more and the in gasoline, of indeed, diesel increased are XX% numbers. Colombia to both pre-COVID demand the terms diesel, in So in terms one of in compared range first seeing, it's

is there of lot a So demand.

the are refinery oil a the We barrels expanded in taking actually day. into to our of days putting from first We're crude XXX,XXX XXX,XXX Refinery. that Cartagena

everything put some managed COVID to will but crude which weeks, under we formal So that already official into and and project, take operation we're did else.

to activity a published we're even company that couple though energy a that of like in largely Strategy. see like present the well. Mainly in fulfilling aligned outside that And in but fracking want of first and that need of the from of about of Luis have point things a Colombia, make in terms and terms also the very but the won't I is comment -- to U.S. So Ecopetrol the is that of the XXXX in fully guys you Brazil. of respectful months things that these, I know comment And strategy ago. I investment, on long-term lot Texas you Colombia I with that we processes and have with continue I grow, campaigns lot so The country want point a will synchronized that needs of we transforms as view, to election do And to now demand. we I'm think presidential say that.

And in current is known opportunities, So which last that thing not of to of of the I both years geographies existing can diversified is of we're in well. that front have well portfolio activity of you exploration in eight share then probably with with terms to businesses Luis, terms want and the as we us. ten

than We (ph). call the have in [hock] XXX more we what opportunities identified

and that's basically contract of government the XX think areas existing Ecopetrol front in in think I that we the sufficient important. XX and runway XX with us with have have I we Hocol, Colombia, under So licenses it's and

very we're So confident.

deliveries in think how more to terms I results resilient have and we implement very that consistent solid plan, demonstrated we very that of that's the and a with strategy have a we've importantly, current plan. a importantly, sound

Jaime, think for you. probably is I one other So, the

Thanks. a If bit give you color. us can

Felipe. you, for Luis. question. your Thank Hello, Thank you

so, announced strategy unchanged this let address capital And allocation we as strategy me allocation capital to I year. by earlier saying would portrayed strategy. the that the XXXX that in is start basically

what very clearly that is. is, Now, our strategy portraits access strategic access

We have well which it, prioritized four are pillars a in of. aware

have that for if to competitive probably grow to That with that. and that going very we and this about. we the so will, a we're XXXX this plan, we are ambition is you look certain I year returns, having what of be way, well building way at is we're to priorities. sustainable our that's see it creates ahead about you all see the year 'XX And historical how ranking, we surpluses share the of to plan. Ecopetrol, of thinking would we're kind We a year. is an delivering know-how when an how It's extremely And robust clear now, it in performing far, that

investment our plan. where existing to investment need our we focused deliver Firstly, on right plan, That's now. we're

So that's going in to get prioritized or gets -- any form. shape that

continue in the growth are further ISA's we in look Secondly, at business whether or they to opportunities, business. hydrocarbon the

the our And look sheet Thirdly, year our one debt go and question, we we're right? that dividends, payments at your that like on position in a occur. optimize to think having, balance existing also additional to with can we are I dividend opportunities continue conscious to plan. to this fourthly,

particular, stage but know, dividends, over extraordinary circumstances, cash in does premature we that how hope given might working you. our and our for extraordinary what this policy dividends, and but to is I dividend you accommodate think ordinary determine would conversations in range where FEPC the situation for be May that Thank conversation helps. that it had. exposure As have around distributions. FEPC, that extraordinary that be and a a in I it'd depending very coming given say on the this be we evolves clear around anything capital I to states to At are months,

question? next to Thanks, Can please Jaime. go the we

you. Thank

JPMorgan. Our comes next Barbara go ahead. Halberstadt from from Please question

for the Hi, good presentation. very you detailed morning. Thank

questions already been of have answered. my Some

different. I wanted on something So follow-up to

your could to? you're China years, internationally, the could headlines in you in seeing Ecopetrol And strategy some been to of If you plant in in and the U.S. demand. that about close we're if thinking of also, if comment the international Thank of markets for and crude that next refining the about uses you. is there lot diversifying placement how comment, commercial seeing thinking the especially new oil, two volatility markets opportunities one with you're you a how all and that the the has supply plant of likely a you're terms

and the answer. you today. thanks being with Barbara, will if go and Please for us And Pedro, here Thanks, I take question help ask the ahead.

you. Felipe. question. for Sure, your Yes, Thank you Barbara, thank

continues some users. Just end destinations the the let about me give you diversification company background and the to be strategy, of focus which to it commercial

for the in in the Our that is our the of realization our contracts of move the best can provides we areas customers. the we barrels markets preference also have barrels to refineries to the main all base our And globally, place so Ecopetrol. data,

years the continues strategy framework recent So successful to the of in provides that a been that be has and very same. the

that in year, strategy, which serve started part to just this to exports world. our region, as in market. one our office we Asian is the commercial closed the operations Singapore largest Now, XX% we the of our important Last region over is growth with new information, of in

India, are rapid given those my we places customer, very go of Now, optimistic customers Korea, and have in and to region about we in economies. Brunei, China, the week important Asian very Japan mainly our a opportunities and the Asia we the the where today. in exports have Singapore Southeast the destinations and Korea, and that are economies I those the recovery team last and visited like with in

-- they are with the refinery U.S. the refining asking LyondellBasell owned We closing is Houston facility, Gulf, received about you're the specifically, refinery. Now, which the communication formal in in the that by a

have Coast. U.S. XXXX main the we we this of So, our since in supplying -- and one is have Gulf refinery, customers been been and

Now, in on what doing customer? We basically we are are things. order focusing replace three this to

demand up picked other The customers is growing. the first will in be U.S. given oil the that the and one by to is that the going region in will continue demand continue

just one those a in their Singapore office So, expanding the that are customers Gulf and signed Coast. base some identified Asia. and we already working barrels possibility Asia, to And U.S. is some we the place will deal of of second, to are those with conversations system with Repsol supply the to placed is in having our we on our in those barrels that be last some in of and And crude confident Spain. customer

market conditions to the of sources diversifying crude due oil. is Europe the Given sanctions, of the Russian their

very area an a and to also becomes that Europe So, market us. a interesting is

that's we're So, regarding basically you. what your two questions. Thank doing

for thanks the Thanks, on next one? Can Pedro to we please question. move your Barbara and

you. Thank

Barclays. Our Please go next question El comes from ahead. from Badr Moutawakil

as Thank on my follow-ups, you so earnings much these I have Yes. for Basically, question answered. taking have know, and congrats today. my you two been or two questions questions mostly

stability on is first the fund. the So one

two just government of is us of or now update forbids the a on if month government you, in thank a for the payment. in capacity there curious the or the nothing is the an willingness we've in to But limit to make payments So, understand the timing giving fund. Jaime, let's basically or new that elected the that say law Colombia, these Stability for trying

So progress on the the potential payments or that regarding your by can can with making changing these to have from these a we making that's government to that seen sovereign to are members to trying them -- the strategy. decide payments years, involvements just more Colombia decide here. play And limits the sovereign is so obviously independent, made Board's I'm when think, four have new I but two devil's just advocate have second trying the funding sovereign, -- stop question my decide law? the bylaws this

I think think guys bit think negative in with side now have you mentioning that last think a conditions a broadly two September XXXX, billion in being were quarter XXXX. you before, little market being higher. maturing on monitoring With and or COPX.X I potentially come cost to I the especially of market your address were conditions I quarters you obviously redemptions, fundings

the how the you Thank markets guys -- your large thinking curious, coming debt just So are management doing cash to redemptions. so cash that you upcoming you about given or potentially have, much. also but

Jaime. Yes. ahead, Go

cover you the question I'm so by good thank your going you and of for fronts. to It's Badr, kind both to hear way.

And Ministry. First owed on fact that the is binding publicly that They're regulation first stability this legally. is FEPC are been very around question. in is that the say fund, I not accounts I'd thing think that this these the clear binding outstanding recognized and is by Ecopetrol, the to has money the the

a disregard any government consider scenario the are don't we simply due. So future can that where balances

will or but that honor balances, the we I action whatsoever action the transparency no the these prepared will, here timeframes for would because of clear. debt. be it's legal in government by that certainty is it If payment, -- and you a use of methods are legal way, very decided around space think to is the regard. would around entitled It's in if the to hypothetically have not be all Ecopetrol there full uncertainty, default payment a and

all. at Now, that not fortunately, in is the place government

the the market government regards of to be that which to I I fact Badr, to has and this own on balances stated gives strategy, its binding different that preparing well, With obligation. repeatedly the clear, we accommodate both no a number do honor over this around identified mechanisms XX-months. the played a They at have over it's which But well lot stage. funding is the flexibility had is are we're coming this gray going proactive a and windows you of for the it which government approach past around to and has very are area point, us spaced, is expiries the a As our very there accumulating second balance and by those call, want around that.

robust. my tool We I'd have that to quote our, very team, our say kit -- is financing

We bonds, And have want basically the arise. note the the Thank do. that all that very capabilities of important of something to or of working take market is which the have point it's is management make we'll well they around when or advantage even tap markets as bonds something and to approvals opportunities necessary this way, arise. we sustainable sure -- Finance, use instruments long-term to including the you short-term liability credits that been much. we around by in opportunities with One those Ministry as place that all to have any we

the next the for Thanks Jaime. answer the If to can thanks Thanks, question. go Badr one, for and we please.

Hernan The Goicochea LatinFinance. you. comes question from from Thank

Hello, Hello? can you me? hear

ahead. Go can. We

Hello? Oh me? can Hello? you hello, hear

go Hernan can. ahead. we Yes,

Okay. Hello?

just first say Sorry, following up, in the first-quarter of XX.X% on is of congratulations you earnings. the I the mentioned My want Well, wasn't all, to sure. I sale had and Invercolsa. that. sale? interest How finalize Ecopetrol the proceeds was follow-up looking earn and for regarding sale I a question the the what expected be is When for? much to is used to that question

expected Businesses not to to proceeds, will terms talk New the Azcuenaga, about we timing but Thanks, answer, the you else. disclose of we Hernan, process an going Strategy and I'm Nicolas VP of give and ask our but numbers in can everything and

So, go you can Nicolas, if ahead?

good Felipe. thank to your questions. you for Thank Hernan, very and you much Yes, Hi, you. morning

going Yana. are will two is rest through timeline democratic to in the us and and remaining second go call the for the year. terms process that take Law of we phases, the of Colombia sale interested timeline, is and one through until its phase In of Coya that XXX up that this of the That's the one, the parties includes the expected

said values be won't in this Thank at expected we disclosing Filipe you. As point time.

Thanks, Do Nicolas we question. thanks any the and have for further questions? Hernan

ahead. go have question Citigroup. Andres we Cardona from a Please Yes, from

Hi, about you second How expecting are year. sterilization second the Q? of for quarter from Felipe, much outlook in prices question, the the quick it’s Jaime. One be fuel the to government the amortized

Hi, here. are It's How you? Andres. Jaime

last balance the is in the balance rate How previously, to we as in the of for of for monthly quarter accruing of FEPC, don't the balance to know. COPX of give are of is this third quarter going about well. year be is balance or your amortized Will the come or language, that's third fourth the take second mentioned that as as the mentioned track in, that. for previously, it well in previous I think use on which a Possibly, I this quarter the quarter I balance year year much I accumulating. On trillion, the the

progressing -- finalized. you. year Thank it's next going that it's few over is to balance think to I be and going the last but months be somewhere believe do that the I of

Thanks, Jaime. questions? have any Do we additional

from have Andres question. Mr. from We It's Corficolombiana. Duarte one last

Go ahead.

Ecopetrol's the taking short production. all energy Thank for of two are These questions long-term of very gas a again, the for you. and the for Thank company medium questions. related you outstanding my These employees. to are results for views questions, transition congratulations and

one fuels, transition first the related to a is fifth the liquid energy biomass, power than the and share gas, generation, only more and about is consumption is XX%. to is of in rest So, final related that actually energy fuels coal liquid Colombia the of

plan, questions. the you if or strategic at are view related for the expecting wondering the one That's as from decline or reserves? to was company shale I other the fuels for a we gas future is, the company is the XXXX? of production So, more liquid Thank consumption And of come first much, gas congratulations. point the question. on economic to the the local again, production that of okay before from long-term pilot assume some an standpoint from and does the production, offshore expecting very the shale today, Those you two are the

those the to team. thanks, pass Andres, Thanks, and we'll and on

the couple So, in out strategy weeks I'll energy when on we the transition, points terms a of strategy. few the XXXX give overall data context used you of rolled that back, a we

actually mainly not be will believe of about you that in goods as for energy be a see part things trucks of terms cities. part and also, XXXX, the trucks used. in diesel done trucks inside terms issue. of Colombia. with or bus remember, of Andres, transportation we we terms transportation it's that grow. may And increasing But there If that and some and until already going diesel gas from some diesel consumption for do be and the will some think do is source we intra-city diesel in maybe now those that's so working on And of happen. first-ever and vehicles the see be already continue one. And to that just to Fanalca will an straightforward of building We worth is in of There different believe roads, will believe -- the is by changing that electric on of we hydrogen are the likes trend demand used mentioning, we

taking speak. So place that's as we

to and and of stay gasoline, to that And billion billion we be know. the that's XXXX, the XX% of years terms to emission remember and come will And of again, from of for will XX% 'XX, COPX will it no, some a by may we and around XX% on 'XX, COPXX COPXX XX% that EBITDA some something In That's forecast XX% we've eventually EBITDA underpinning by or a down peak company flat basically -- all a that and up grow come the businesses. strategy. we've billion its to sort from bit. then there expect considerations made again or change low for long-term assumptions said the year will

in we understanding of offshore. and So I coming are. -- that in where that helps think terms I from production And hope unconventionals terms of

mix. a it's think I

where we maybe the have see we So space. strategy again a remember you production if have graph to we you look that at -- XXXX show XXXX, we and in

production from of our XXXX milestone, at production see give comes Recovery. from tranche XXX,XXX in the the barrels. tranche that comes you you XX% XQ, we is If look Enhanced EOR, that a the sense, accounted the There is EOR a production that There have base in from To Oil for production. to we range XXX,XXX of today.

and it's the unconventional lot and a two U.S. top both it's very of tranches, those where have of relevant in Colombia. something So Ecopetrol on And we you has expertise. in believe

Caribbean the exploration exploration. further and have offshore you in You have

to XXXX. XXX,XX of XXX,XXX, basically the you by least a at of go end to from So or actually there XXX,XXX XXX,XXX combination see And blocks. is that so basically period strategy five the should building

point Piedemonte XX-years play. of since lots drilling, so Piedemonte rigs that operating of putting a in rigs lot into in Andre. been of we've is offshore in lots since things very things It's view, of We're reactivation So, from long happening important. two It's Casanare. gas. had five capital a been we have time

thanks the additional questions, we have So, for Hilda? question. Do any

Mr. you, Bayon. Thank

further We have have you remarks? Do no questions. final any

that. Sure, for thanks and sure,

for interest again, call. results Ecopetrol, today XQ So, the your thanks everyone for our in thanks, questions. being here in Thanks conference for

what put understanding As of to focus I've a a help interest of lot the said are they in that we terms are areas us of the what need things before, lot on. and

see So, we you calls. soon care Please really that. appreciate hopefully, take stay safe, one yourselves these of and we'll of next in conference

have So, stay a great and day. safe

participating. Ladies this gentlemen, today's and you. for conference. Thank you concludes thank We

may You disconnect. now