Colombia , Brazil , Peru , United States and Chile
Press Release

The Ecopetrol Group will invest between COP 25.3 and COP 29.8 billion in 2023 to accelerate the path of transition and energy sovereignty

Bnamericas Published: Friday, December 09, 2022

This Ecopetrol release was published using machine translation.

Ecopetrol SA (BVC: ECOPETROL; NYSE: EC) reports that its Board of Directors approved the general organic investment plan for the Ecopetrol Group with an estimated amount between COP 25.3 and COP 29.8 billion by 2023. Individual investment projects will be evaluated in its moment by the Board of Directors according to its materiality. The plan seeks to advance the four pillars of the 2040 Strategy, and the roadmap for the country's energy transition.

The commitment to the energy transition is reflected in investments between COP 5.9 trillion and COP 6.8 trillion in renewable self-generation, hydrogen, transmission and roads, and energy efficiency; COP 3.6 to COP 4.1 billion for gas self-sufficiency and between COP 15.8 and COP 18.9 billion to ensure energy security, financial sustainability and favor the country's trade balance.

Renewable self-generation, hydrogen, energy efficiency, carbon capture and ISA (transmission and roads) resources represent about 23% of the investment plan for 2023. About COP 4.1 trillion in the next 3 years (around COP 315 billion in 2023), will allow the incorporation of 900 MW of renewable energies, the production of more than 50,000 tons of low-carbon hydrogen, the reduction of nearly 400,000 tons of CO2e emissions, and progress in carbon storage and capture studies (CCUS for its acronym in Spanish). in English).

Gas investments oscillate between COP 3.6 and COP 4.1 trillion in 2023, with a production between 174 and 177 thousand barrels of oil equivalent per day (which represents around 800 million cubic feet of natural gas, in addition to white products). These resources are aimed at maintaining the current supply, seeking to increase it with gas exploratory projects, of which 12 wells are planned for 2023, mainly in the Piedmont, Caribbean Offshore and Northern Colombia, consolidating social gas and energy communities such as the fuel of transition.

Additionally, ISA will invest an approximate amount of COP 6.3 trillion (COP 19.8 trillion for the next 3 years), of which close to COP 5.4 trillion will be to build 9,657 kilometers of energy transportation by 2025 (6,227 kilometers of them for the transportation of non-conventional renewable energy), consolidating ISA as the Latin American leader in energy transmission.

Nearly 66% of the total investments estimated for the year will be allocated to projects in Colombia in order to continue generating added value to the domestic chain and increase the benefit for interest groups in the national territory.

Investments abroad, which correspond to 34% of the total, seek to ensure long-term resources to fund the energy transition and advance in low-emission investments, primarily in the electricity transmission business. These investments will be made in the United States, mainly in Permian (19%), as well as in Brazil (9%), Peru (3%) and Chile (3%).

For the exploration and production segment, the investments will make it possible to reach organic production levels in 2023 between 720 and 725 thousand barrels of oil equivalent per day (76% oil and 24% gas and white products), and will be focused on improved recovery technologies. to maximize existing resources in the reservoirs and protect the basic curve to compensate for the natural decline of the fields.

Likewise, between 2023 and 2025, 1,600 development wells will be drilled, 574 of them in 2023. In addition, the drilling of 25 exploratory wells is expected in 2023, located in the Llanos Orientales, Valle Medio del Magdalena, Piedmonte, and Caribe basins. Offshore.

Investments in the transportation segment correspond to 5% of the total plan for 2023, concentrating mainly on infrastructure integrity and reliability projects, developed by Cenit, Ocensa, ODC, and ODL, and includes resources associated with the pipeline expansion plan that Its objective is to guarantee the supply of refined products in the country. The transported volumes are estimated to exceed one million barrels per day, in line with the country's production expectations and the demand for refined products.

Investments in the refining segment correspond to 7% of the estimated total for 2023. These will continue to be focused on ensuring the reliability, availability and sustainability of the operation of the Barrancabermeja and Cartagena refineries, to strengthen the country's energy security, the energy transition and decarbonization, through the development of fuel quality programs and wastewater management, which will reduce imports, ensure fuels with less sulfur and have increasingly cleaner effluents. The expected joint load of the refineries will be between 420 and 430 thousand barrels per day.

Another fundamental pillar of our 2040 Strategy is the generation of value with SosTECnibilidad®, for which the plan considers investments close to COP 2.3 trillion mainly in projects associated with: i) decarbonization (COP 896 billion), ii) comprehensive water management (COP 900 billion), iii) fuel quality (COP 288 billion), and iv) investments associated with other topics such as research, circular economy, health and process and industrial safety (COP 207 billion).

Additionally, COP 472 billion of social investment is planned that will strengthen the commitment to local development of the regions, to leverage in 2023, among others, the intervention of 240 kilometers of tertiary network, education for 90,000 students, access to 16,000 inhabitants to drinking water and 13,000 new home gas users, among others.

To advance the Vanguard Knowledge pillar, the plan includes investments for COP 405 billion to advance the Science, Technology and Innovation agenda. These investments strengthen the competitiveness of the operations and contribute to the SusTECnibility® strategy through solutions focused on reducing emissions and technologies that make the goals of reducing collection and zero water discharges viable.

The plan seeks to ensure competitive returns for the government and minority shareholders, therefore, in a Brent scenario of 80 USD/Bl average by 2023, a ROACE1 above 10%, EBITDA margin above 40% and solid financial results, which overcome inflationary pressure and incorporate efficiency goals that seek to capture savings in the management of investment projects. 83% of EBITDA is generated in Colombia and transfers to the nation including dividends, royalties and taxes would exceed COP 40 billion.

Finally, the 2023 investment plan involves, among other things, financing with own resources, collection of the account receivable from the Fuel Price Stabilization Fund (FEPC), and marginal leverage in line with a lower Gross Debt/EBITDA ratio. to 2.1 times. The plan will be subject to revisions during the first quarter of 2023 based on the evolution of its assumptions.

“The operational and commercial figures of the Ecopetrol Group in 2022 show an outstanding performance that supports the historical financial results. With the 2023 investment plan, we will continue to grow with the energy transition, while generating value for society and our shareholders, and we ratify the Group's commitment to SusTECnibility® and the country's energy sovereignty”, said the president of Ecopetrol, Felipe Bayon Pardo.

Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects

Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.

Other companies in: Petrochemicals (Colombia)

Get critical information about thousands of Petrochemicals companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Summum Projects S.A.S  (Summum Projects)
  • The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
  • Company: Atlantic Metals S.A.S.  (Atlantic Metals)
  • The description included in this profile was taken directly from an official source and has not been modified or edited by BNamericas’ content team. However, it may have been au...