Ecopetrol Stock

Ecopetrol S.A. (Ecopetrol) engages in commercial and industrial activities related to the exploration, exploitation, refining, transportation, storage, distribution and marketing of hydrocarbons, their derivatives and products, as well as the electric power transmission services, design, development, construction, operation and maintenance of road and energy infrastructure projects and the provision of information technology and telecommunications services.

The company operates as an integrated energy company in Latin America, with a presence primarily in Colombia and activities in the U.S. (U.S. Gulf of Mexico and Permian Basin), Brazil, Mexico, Peru, Chile and Bolivia. In Colombia, the company is responsible for more than 60% of the hydrocarbon production, transportation, logistics, and hydrocarbon refining systems, and holds a leading position in the petrochemicals and gas distribution segment. Through Interconexión Electrica S.A. (ISA), the company has a strong position in the electric power transmission business, toll roads and telecommunications sectors throughout Latin America. The Nation owns 88.49% of the company’s voting capital stock.

Segments

The company operates through five operational divisions: Exploration and Production; Transportation and Logistics; Refining, Petrochemicals and Biofuels; Sales and Marketing, and Electric Power Transmission and Toll Roads Concessions.

Exploration and Production

The company’s exploration and production business segment includes exploration, development, and production activities in Colombia and abroad. Exploration and production activities are conducted directly by Ecopetrol S.A., and through some of the company’s subsidiaries, as well as through joint ventures with third parties. As of December 31, 2022, the company is the largest operator and producer of crude oil and natural gas in Colombia, maintaining the largest exploration acreage position in Colombia.

Exploration Activities

In 2022, the company’s exploration strategy was focused on three working fronts: Colombian onshore, Caribbean offshore, and overseas.

Exploration Activities in Colombia

El Niño-2 well, in which the company holds a 50% working interest, CNOOC holds a 20% and Perenco Colombia Limited holds the remaining 30% and acts as operator through the Boqueron Contract, Tejón-1 well, in which the company holds a 55% working interest and acts as operator, and Repsol holds the remaining 45%, through the CPO-9 Contract, Morito-1 well, in which the company holds a 100% working interest, through the Magdalena Medio Exploitation Agreement, Gorgón-2 well, composed of Gorgón-2 ST1 (pilot well) and Gorgón 2-ST2, in which the company holds a 50% working interest, and Shell holds the remaining 50% and acts as operator through the Col-5 offshore E&P contract, Uchuva-1 well, in which the company holds a 55.56% working interest and Petrobras holds the remaining 44.44% and acts as operator through the Tayrona offshore contract, Fidalga-1 ST2 well, in which the company holds a 20% working interest and Parex Resources holds the remaining 80% working interest and acts as operator, drilled at Parex Resources’ sole risk, through the Fortuna Association contract, Coralino-1 well, in which the company holds a 100% working interest, through its subsidiary Hocol S.A. (Hocol), through the VIM 8 Contract, and Ibamaca-2 ST well, in which the company holds a 100% working interest, through its subsidiary Hocol, through the Tolima Exploitation Agreement.

In March 2022, Parex Resources and the company entered into an addendum to the Farm-Out Agreement for the Capachos asset located in the department of Arauca in the Llanos basin, in which the company and Parex each have a 50% stake. The agreement contemplates investments in the second exploratory phase which is expected to extend productive horizons of oil and gas and enable the possibility of incorporating new reserves from this asset.

In May 2022, the company and Anadarko Colombia Company (Anadarko), a subsidiary of Occidental Petroleum, entered into a joint exploration agreement for blocks COL 1, COL 2, COL 6 and COL 7, located in deep waters in the northeast of the Colombian Caribbean. The company holds a 40% stake in the exploration and production rights and Anadarko as operator of the blocks, holds the remaining 60%. The agreement has been formalized by the Agencia Nacional de Hidrocarburos (ANH).

In August 2022, Hocol and Lewis Energy Colombia (LEC) entered into a joint exploration agreement for E&P blocks SSJN 3-1 and VIM-42, located in the Colombia Norte areas of the Sinú-San Jacinto Basin and Lower Magdalena Valley, respectively. Each of Hocol and LEC holds a 50% participation, and LEC acts as operator. The agreement has been formalized by the ANH.

Exploration Activities Outside Colombia

In the central area of the Gulf of Mexico, the company’s subsidiary Ecopetrol America participated in the Chevron operated Starman-1 well. The well reached total depth in October, encountered hydrocarbon volumes below Ecopetrol America’s threshold for standalone development, and was permanently plugged and abandoned. The parties are still evaluating the results.

In Brazil, the company, through its subsidiary, Ecopetrol Óleo e Gás do Brasil Ltda., strengthened its portfolio in the prolific Santos Basin. Also in the Santos Basin, the company among BP plc (BP), CNOOC, Ecopetrol Óleo e Gás do Brasil Ltda., in which the aforementioned partners have a 50%, 30% and 20% ownership stake, respectively, is moving forward with the preparation of the first exploration well in the Pau-Brasil pre-salt block, which is planned for the first half of 2024.

During 2022, the company’s subsidiary Ecopetrol Óleo e Gás do Brasil Ltda, purchased 2,595 km2 of 3D seismic data located in the Santos and Campos basins to evaluate the exploratory potential of those basins and to mature the existing prospects within the portfolio.

Production Activities in Colombia

For the year ended December 31, 2022, the company was the largest participant in the Colombian hydrocarbons industry, accounting for approximately 65% of crude oil production and 60% of natural gas production (calculations based on information from the Ministry of Mines and Energy (Ministerio de Minas y Energía or MME for its acronym in Spanish).

Natural Gas Production

In 2022, the average daily production of natural gas by Ecopetrol (excluding its subsidiaries) reached 132.7 thousand boepd, including natural gas liquids (NGLs). This production was supplied from the following fields: Cupiagua (34%), Floreña (30%), Cusiana (17%), Guajira (9%), and the remaining 10% from other fields.

By the end of December 31, 2022, the Liquefied Petroleum Gas (LPG) plant of the Cupiagua field produced 7,099 LPG barrels per day. The plant produces LPG and other products such as natural gas liquids (NGL), and penthane (C5).

In 2022, the subsidiaries’ production in Colombia came from Hocol, with a production of 36.9 thousand boepd, which represents 5.2% of the Ecopetrol Group’s total production.

Production Activities Outside Colombia

In 2022, the subsidiaries’ production outside Colombia came mainly from Ecopetrol America LLC and Ecopetrol Permian LLC.

Crude Oil Production

On February 15, 2022, the company submitted the EIA for the Platero project to the ANLA, and on March 10, 2022, as part of the process to grant the environmental license for the Platero project, the ANLA ordered the scheduling of an environmental public hearing, which is still pending.

On October 24, 2022, the company and Exxon Mobil requested to the ANH the reassignment of interest, rights, and obligations of the Platero CEPI contract to Exxon Mobil, and the Kale CEPI contract to the company.

Marketing of Crude Oil and Natural Gas

In 2022, the company sold 953.3 mboed, out of which 448.1 mboed represented sales of fuels and petrochemicals (47%), 403.4 mboed represented sales of crude oil (42%), and 101.8 mboed sales of natural gas (11%).

Crude Oil Export Sales

The company’s crude oil export sales are traded both in the spot and contract markets, primarily to refiners in Asia and the United States.

Ecopetrol US trading is the company’s second trading subsidiary, following the incorporation of Ecopetrol Trading Asia in Singapore in 2021, which began operations during the second quarter of 2022. Ecopetrol Trading Asia has already reached trades volumes and sold 42 mmboe of crude in 2022.

Crude Oil Purchase Contracts

The company has signed several crude oil purchase contracts with third parties and business partners. The company also purchased the country’s crude oil royalties from the ANH.

Natural Gas Sales

The company sells natural gas to distribution companies through firm, interruptible and conditional contracts. These distributors supply natural gas to the residential market, as compressed natural gas for vehicles market and to large industrials in Colombia. The company also markets and sells natural gas directly to the industrial sector and to gas-fired power plants.

Joint Venture and Other Contractual Arrangements

The company conducts its exploration and production business through a variety of contractual arrangements with the Colombian Government or with third parties.

Special Contracts

The company is party to a joint venture for exploration and exploitation of La Cira-Infantas Area and of Teca-Cocorná Area.

The company partially assigned its exploratory and production rights in the contracted areas to SierraCol Energy. Additionally, pursuant to these contracts, the company provides financial resources and the preferential rights of use for the existing infrastructure in that zone and SierraCol Energy provides financial resources and the technical and operative experience in mature fields redevelopment projects and enhanced recovery technologies. The company is the operator under both joint ventures, and, on behalf of the parties, is responsible for the conduction, execution, and control, directly or via contractors, of the operational activities.

The La Cira-Infantas joint venture is divided into three phases. The first phase lasts 180 days, the second lasts 730 days, and the third phase lasts up to the date in which the field reaches its commercial viability. The incremental production, after deduction of the royalties, is owned 52% by the company and 48% by SierraCol Energy. The Teca-Cocorná joint venture is divided into two phases. The basic production is 100% owned by the company.

Transportation and Logistics

Transportation Activities

The transportation and logistics segment includes the transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels. The company conducts most of these activities through its wholly owned subsidiary Cenit Transporte y Logística de Hidrocarburos S.A.S. (Cenit) and its subsidiaries.

Transportation Capacity

The company’s main crude oil pipeline systems’ operating capacity was 1,472 thousand barrels per day in 2022. The company’s main multi-purpose pipeline transportation capacity increased from 524 thousand barrels per day in 2021 to 535 thousand barrels per day in 2022.

Pipelines

As of December 31, 2022, the company, directly or indirectly with private partners, own, operate and maintain an extensive network of crude oil and multi-purpose pipelines. These pipelines connect the company owns and third-party production centers, import facilities and terminals to refineries, major distribution points, and export facilities in Colombia.

Cenit directly owns 45% of the total crude oil pipeline shipping capacity in Colombia. When aggregated with the crude oil pipelines in which Cenit owns an interest, Cenit owns 85% of the oil pipeline shipping capacity in Colombia. By December 31, 2022, the company’s network of crude oil and multi-purpose pipelines was approximately 9,127 kilometers in length. The transportation network consists of approximately 5,388 kilometers of main crude terminals and oil pipeline networks connecting various fields to the Barrancabermeja refinery and Cartagena Refinery, as well as to the company’s export facilities.

The company also owns 3,739 kilometers of multi-purpose pipelines for transportation of refined products from the Barrancabermeja and Cartagena refineries to major distribution points. Out of the 5,388 kilometers of crude oil pipelines, owned by the company, 3,175 kilometers of crude oil pipeline are wholly owned, and 2,212 kilometers of crude oil pipeline are owned through non-wholly owned subsidiaries.

As of December 31, 2022, the company owned 75 stations, 41 located in crude oil pipelines, 30 in refined products pipelines, 2 in crude oil ports and 2 in refined product ports. As of December 31, 2022, the company had a nominal storage capacity associated with the transportation network of 16.7 million barrels of crude oil and 5.4 million barrels of refined products.

Pipeline Projects

Coveñas- Cartagena

This pipeline has a nominal capacity of 135,000 barrels per day and feeds the Cartagena Refinery with national crudes.

Operational Storage Program

The operational storage program’s objectives and scope includes ensuring a storage of 916,000 barrels of refined products in 5 different stations. The program foresees the construction of 10 tanks distributed through 4 projects divided in this way: 1 tank of 260,000 barrels for Nafta in Pozos Colorados Terminal; 2 tanks of 100,000 barrels each in Sebastopol station and 1 tank of 62,000 barrels in Yumbo station (all this storage is for Biodiesel Extra (B2E) and Gasoline (GM)); 2 tanks of 70,000 barrels each, to storage B2E and GM in Cartago Station; and 4 new tanks in Medellín that in total has 254,000 barrels of capacity to storage Jet (JA1), Gasoline Extra (GE) and B2E.

Vasconia Energy Recovery (RECVA)

In connection with Ecopetrol Group’s focus on energy efficiency, the company developed the Vasconia Energy Recovery (RECVA) project, which seeks to capture energy dissipated in the transportation process.

Electric Interconnection of the Estación el Porvenir (ENERGEPO)

Oleoducto Central S.A. (Ocensa) established a strategic framework to reduce emissions by 51% by 2030. The ENERGEPO project is subject to the completion of the Alcaraván expansion project, which consists of expanding the 230 KV and 115 KV electrical networks between San Antonio in Nobsa Boyacá and the new Alcaraván electrical substation in Yopal, by the Mining and Energy Planning Unit (Unidad de Planeación Minero-Energetica or UPME for its acronym in Spanish).

Export and Import Facilities

The company has concessions granted by the Colombian Government for four export/import docks for crude oil and refined products: Coveñas, Tumaco, Pozos Colorados, and Cartagena. The company’s export capacity reached 2.33 million barrels per day for crude oil. The company’s import capacity of refined products and crude oil reached 0.61 million barrels per day and 0.34 million barrels per day, respectively.

The company’s crude oil loading facilities can load tankers of up to 350 thousand deadweight tonnage (DWT). Adjacent to these loading facilities the comopany also has storage facilities with 9.98 million barrels of capacity. The company’s docks, used for import and export refined products, can load tankers of 55 thousand DWT.

Other Transportation Facilities

During 2022, 24.3 million barrels of crude oil and refined products were transported by tanker trucks, and 11.9 million barrels of refined products were transported by barges, particularly using the Magdalena River, connecting Barrancabermeja with Barranquilla and Cartagena.

Marketing of Transportation Services

Cenit and its subsidiaries’ main line of business is the crude oil pipeline transport (77.16% of revenues), followed by the refined products pipeline transport (15.88% of revenues) and ports and related services (6.95% of revenues). Both crude and refined product pipeline transport are regulated activities; crude oil pipeline transport services are regulated by the Ministry of Mines and Energy, while refined product pipeline transport services are regulated by the Energy and Gas Regulatory Commission (Comisión de Regulación de Energía y Gas or CREG by its acronym in Spanish).

Cenit also transports refined products, and its main client is Ecopetrol, which accounted for 38.46% of refined products pipeline transport revenues in 2022, mainly due to the transport of naphtha, diesel, and gasoline. Cenit also has 26 other fuel wholesalers’ customers for whom it transports refined products. The most significant among them are Organización Terpel, Primax Colombia, Chevron Petroleum Company, Biocombustibles S.A.S. and Petrobras Colombia.

Refining and Petrochemicals

Refining

The company’s main refineries are the Barrancabermeja refinery, which Ecopetrol directly owns and operates, and a refinery in the Free Trade Zone in Cartagena owned by Cartagena Refinery, a wholly owned subsidiary of Ecopetrol, who operates this refinery and two other minor refineries -Orito and Apiay-, but these are considered part of the upstream segment since most of the production is for self-consumption. The company’s refineries produce a full range of refined products, including gasoline, diesel, jet fuel, LPG and heavy fuel oils, among others.

Barrancabermeja Refinery

The company owns and operates four petrochemical plants and one paraffin and lube plant located within the Barrancabermeja refinery. In 2022, the company produced 40,864 tons of low-density polyethylene, an increase of 38% compared to the production of 29,519 tons in 2021. The company produced 578,807 mboe of aromatics (benzene, toluene, xylene, orthoxylene, heavy aromatics, and cyclohexane), a 9.1% increase as compared with the production of 530,667 mboe of aromatics in 2021, mainly as a result of the operational availability of the units, which were not partially available in 2021 due to scheduled maintenance activities.

Cartagena Refinery

During 2022, the Cartagena Refinery imported butane in order to achieve the planned feed of the Butamer Unit and to increase the production of alkylate.

Esenttia S.A. (Esenttia)

During 2022, Esenttia’s production totaled 468 thousand tons of petrochemical products.

Invercolsa

During 2022, Inversiones de Gases de Colombia S.A. (Invercolsa), registered 1.39 million users of natural gas.

Biofuels

As of December 31, 2022, the company had investments in the biofuel company Ecodiesel Colombia S.A., in which it owns 50% of the shares, in operation with a capacity of 130 thousand tons of biodiesel per year.

Marketing and Supply of Refined Products

The company is the main producer and supplier of refined products in Colombia. The company markets a full range of refined and feedstock products, including regular and high-octane gasoline, diesel fuel, jet fuel, LPG and petrochemical products, among others.

Electric Power Transmission and Toll Roads Concessions

The company’s new electric power transmission and toll roads concessions segment arose directly out of the Acquisition and includes the offering of services such as electricity transmission and the designing, building, operating, and maintaining toll road infrastructure in various countries in Latin America. The company conducts these activities through ISA and its subsidiaries.

ISA

ISA and its 50 subsidiaries operate and maintain electricity transmission networks, with the broadest presence of any Latin American electricity transmission company in terms of the number of countries where ISA operates. ISA is also involved in toll-road concessions, telecommunications, and information and communications technology (ICT) businesses.

Electricity Transmission Activities

ISA is one of the largest international energy transmission companies in Latin America in terms of kilometers of electricity lines in operation, according to ISA’s internal calculation of the total kilometers of high-voltage network circuits of the energy transmission segment in each country in which ISA operates. The energy transmission companies of ISA operate and maintain a high-voltage transmission network in Colombia, Brazil, Bolivia, Peru, and Chile, as well as some international interconnections that operate between Colombia–Ecuador and Ecuador–Peru. In Central America, the company holds a stake in Empresa Propietaria de la Red (EPR), a company incorporated under the laws of Panama and headquartered in San José, Costa Rica, which operates the Energy Interconnection System for the Countries of Central America (Sistema de Interconexión Eléctrica de los Países de América Central or SIEPAC for its acronym in Spanish).

In addition, ISA, through its subsidiaries, transmits 444,000 GWh annually, by means of 48,766 kilometers of high-voltage network circuits, which support the supply of energy in Latin America. As of December 31, 2022, ISA is in the process of constructing an additional 6,879 kilometers of high-voltage network circuits, which are expected to start operations in the near term.

Electricity Transmission Activities in Colombia

In 2022, ISA’s subsidiaries electricity transmission activities in Colombia included 13,569 km of transmission lines. As of December 31, 2022, ISA owned and operated an aggregate transformation capacity of 22,721 MVA (Megavolt-Amperes), transforming high voltage electricity into low voltage electricity, and vice versa.

Electricity Transmission Activities Outside Colombia

In 2022, ISA’s subsidiaries electricity transmission activities outside Colombia included 35,199 km of controlled transmission lines, where Brazil represents 59% of the total transmission infrastructure.

Toll Roads Concessions Activities

ISA designs, builds, operates, and maintains toll road infrastructure that connects millions of people in Chile and Colombia. As of December 31, 2022, ISA was the largest intercity road operator and operated four concessions in Chile (Ruta del Maipo, Ruta del Bosque, Ruta de la Araucanía and Ruta de los Ríos), while in Colombia, it operated the Ruta Costera Concession. In total, it operated five toll roads concessions, which covered a total of 860 kilometers in these two countries and had 136.46 kilometers of new toll roads under construction in Ruta del Loa Concession. During the year ended December 31, 2022, 128.9 million passenger car units traveled on roads operated by ISA.

Energy Initiatives

During 2022, the company achieved 208 MW of renewable energy capacity, equivalent to 14.4% of total installed capacity and a 95 MW increase, compared to 2021, mainly due to the additional capacity of the Guayepo Solar Park, the Cantayús Hydroelectric Projects and the Brisas Solar Ecopark. The company also began the construction of photovoltaic solutions with an additional 102 MW capacity (La Cira, Solar Cartagena and others), and the commissioning of other renewables projects (Quifa Solar Park, Wind Park Araguaney, La Estrella Solar Park, Casablanca-Membrillal), which will add 400-450 MW by the end of 2024.

Production

During 2022, the company’s production segment had an average monthly energy consumption of 411 GWhm (gigawatts per hour per month) for its direct operation, of which 58% was provided through self-generation and the remaining 42% with non-regulated energy purchased from the National Transmission System.

Brisas Solar Ecopark, located in the municipality of Aipe (Huila) was commissioned in December 2022 and has an installed capacity of 26 MW. In addition, during 2022, the construction of Solar Park La Cira with an installed capacity of 23 MW started.

Ecopetrol is the offtaker of PPAs with Brisas Solar Ecopark for 26 MW and Guayepo Solar Park for 65 MW.

Transport

During 2022, the company’s transport segment had an average monthly energy consumption of 56 GWhm (gigawatts per hour per month) for its direct operation, from which 99% was provided by non-regulated energy purchased from the National Transmission System and the remaining 1% was provided through self-generation.

In December 2022, Cenit acquired the small hydroelectric power station Cantayús (4.3 MW) which added to its renewable sources for self-consumption, along with the current capacity of the Castilla Solar Ecopark (21 MW) and San Fernando Solar Ecopark (61 MW).

Refining

During 2022, the Barrancabermeja refinery’s average monthly energy consumption was 58 GWhm (gigawatts per hour per month), provided through self-generation, compared to 58 GWhm in 2021. Similarly, in 2021, the Cartagena Refinery’s average monthly energy consumption was 57 GWhm (gigawatts per hour per month), provided through self-generation, compared to 59 GWhm in 2021.

In September 2022, Ecopetrol contracted a third-party for the construction for the solar farm at the Cartagena Refinery with a capacity of 23MW.

HSE

This section describes the health, safety and environmental (HSE) practices of the company’s Subsidiaries guidelines must be consistent with those established by Ecopetrol S.A.

Cartagena Refinery

In 2022, approximately 7,254,165 man-hours were employed conducting Cartagena Refinery’s business activities. The company’s HSE performance indicators for Total Recordable Incidents Frequency (TRIF), Process Safety Incident (PSI), and Environmental Incident (EI) were well within its established expectations.

ISA

For ISA and its subsidiaries and affiliates, it is important to protect and preserve the health and safety of workers, regardless of the type of contractual relationship, guaranteeing safe work environments, self-care, and the application of good prevention practices.

Oleoducto Central S.A.S. (Ocensa)

The company has entered into a number of agreements with its 72.65%-owned subsidiary, Ocensa.

The company has an agreement for the transportation of crude oil through the Ocensa pipeline.

On October 28, 2013, Ecopetrol entered into a natural gas supply contract in force until November 30, 2018, pursuant to which the company supplies gas to Ocensa.

In January 2022, Ecopetrol and Ocensa entered into a crude oil supply contract, pursuant to which Ecopetrol will supply blending and light mixing crude oils for the operation of Ocensa’s pumping equipment.

Oleoducto de Colombia S.A. (ODC)

Ecopetrol entered into the following agreements with its 73%-owned subsidiary, ODC.

In July 1992, a ship-and-pay agreement was signed for the transportation of hydrocarbons. Pursuant to this agreement, Ecopetrol must pay a previously agreed tariff for the volume of hydrocarbons transported. The duration of this agreement is indefinite; however, the contract will remain in force as long as Ecopetrol holds shares in Oleoducto de Colombia S.A., whether directly, or through an affiliate. As of January 2013, the parties agreed that the applicable tariff would be the one set by the Ministry of Mines and Energy (the MME Tariff). The last tariff update by the MME was in 2019 for a four-year term, with a yearly adjustment based on macroeconomic variables. In 2022, payments made by Ecopetrol under this agreement amounted to USD 144 million.

In August 1992, an operation and maintenance agreement was signed for the Vasconia and Coveñas terminals both property of ODC. The duration of this agreement is indefinite but can be terminated by any party upon six months’ notice. The initial contract included services rendered by Ecopetrol directly or by third-party contractors hired by Ecopetrol through mandate, with a variable surcharge over expenses and third-party contracts between 5% and 12% plus any applicable taxes. In 2014, an amendment to the agreement was signed, adjusting the monthly fixed rate to include expenses of services rendered directly by Ecopetrol S.A., plus an additional 10% fee, and to eliminate the administrative surcharge. The contract also includes a variable sum related to contracts and purchases made by Ecopetrol through mandate. In March 2015, the monthly rate was adjusted for both Vasconia and Coveñas Stations. In March 2016, an amendment to the agreement was signed, adjusting the agreement’s scope to include the pipeline’s maintenance and adjusting the monthly fixed rate. In December 2017, an amendment to the agreement was signed, adjusting the agreement’s scope according to the change of the maintenance model of the midstream segment and including the Caucasia station and the Vasconia-Coveñas pipeline system into the scope. In March 2018, the parties amended the agreement in order to narrow the scope to the purchase and contracting management and adjust the monthly rate. In February 2019 the scope of this agreement was amended to include planning, structuring, administration, and execution of the agreements signed with the Ministry of National Defense (Fuerzas Militares de Colombia). In July 2020, an amendment to the agreement was signed, adjusting the monthly fixed rate. In 2021, three amendments to the agreement were signed, adjusting the scope of the contract and the monthly fixed rate. This agreement expired May 31, 2021, was not renewed and pursuant to its terms, on December 28, 2022, Ecopetrol reimbursed ODC USD 0.21 million as a result of the liquidation of the contract.

In March 1998, a joint operation agreement was signed for the TLU-1 Coveñas buoy. The duration of this agreement is indefinite and can be terminated by mutual agreement. In December 2013, Ecopetrol assigned its rights under this agreement to Cenit, though Ecopetrol kept its role as operator under the agreement. On September 15, 2021, Ecopetrol ceased its role as agreement´s operator. Pursuant to the terms of this agreement, on October 24, 2022, Ecopetrol reimbursed ODC USD 1.8 million for the return of prepayments generated in the operations executed in the framework of the contract.

In September 1999, a joint operation agreement was signed for the TLU-3 Coveñas buoy between Ocensa, ODC and Ecopetrol. The duration of this agreement is indefinite. In December 2013, Ecopetrol assigned its rights under this agreement to Cenit, though Ecopetrol kept its role as operator under the agreement. On September 15, 2021, Ecopetrol ceased its role as operator and pursuant to the terms of the agreement.

ODC has entered into the following agreements with some of the company’s other subsidiaries:

Between March 1992 and January 1993, Hocol, Equion and Santiago Oil Company each entered into agreements with ODC for the transportation of crude oil through the Vasconia-Coveñas pipeline. The term of each of these agreements is indefinite. As of January 2013, the applicable tariff is the one set by the Ministry of Mines and Energy. In 2022, the transportation fees billed by ODC were: Equion (USD 0.42 million) and Hocol (USD 0.93 million).

On December 23, 2022, ODC entered into a crude oil transportation contract with Equion. The term of this agreement is one year, effective as of January 1, 2023.

Oleoducto de los Llanos Orientales (ODL)

Ecopetrol has entered into agreements, among others, with its 65%-owned subsidiary, ODL:

Oleoducto Bicentenario de Colombia S.A.S.

Ecopetrol has entered into agreements, among others, with its 100% owned subsidiary, Oleoducto Bicentenario:

Ecodiesel

Ecopetrol entered into a supply agreement for the Barrancabermeja refinery, with Ecodiesel Colombia S.A. (Ecodiesel), a company in which Ecopetrol has a 50% equity interest.

Intellectual Property

The company has filed 332 patent applications in the last 17 years, 23 of them in 2022. Its patent applications include innovative technologies, such as titanium zinc and carbon oxides composites photocatalysts and their preparation method, method for obtaining fluorescent carbon nanomaterials from petroleum by products and its products, anticorrosive coating from asphaltene oxide and the method for obtaining such coating, activated carbon composite materials with metal nanoparticles and their preparation method, methods for obtaining reinforced cements with materials based on silicon dioxide nanoparticles coated with carbon oxides and their related products, (v) method for obtaining adsorbent materials from functionalized carbon oxides, metal functionalized with activated carbon nanostructured composites for the removal of sulfur, and development of a water nanofluid for changing wetting in heavy hydrocarbon reservoirs, using silica nanoparticles functionalized with polyethylene glycol.

In 2022, the company obtained 18 new patents, 15 in Colombia and 3 abroad (2 in Venezuela and 1 in the United States). The company holds 137 patents in Colombia, the United States, Mexico, Argentina, Peru, Venezuela, Ecuador, Brazil, Russia, Nigeria, Indonesia, India, and Malaysia.

As of December 31, 2022, 55 technologies have been commercialized, with different business and technology transfers model to Colombian and multinational companies, thus achieving their monetization and generating additional income for the company.

Regulations

The company complies with all applicable regulations. In particular, the Ministry of Environment and Sustainable Development is responsible for issuing regulation regarding Law 1931 of 2018 (Climate Change Law), which outlines provisions for the establishment of a National Program of Greenhouse Gas Tradable Emission Quotas.

As part of the company’s monitoring of climate change requirements, it also identified ongoing regulatory processes related to the issuance of Resolution 40066 of 2022 regarding the reduction of fugitive emissions and routine flaring, led by the Ministry of Mines and Energy.

Companies engaged in the exploration and production of hydrocarbons, such as the company, must pay the ANH, as representative of the Government of Colombia, a royalty on the production volume of each production field, as determined by the ANH.

According to Law 681 of 2001, multi-purpose pipelines owned by Cenit (a company wholly owned by the company) must be open to third-party use on the basis of equal access to all.

The Ecopetrol Group has invested in several projects that are considered projects from AGGE (big-scale electricity self-generator), which means that CREG Resolution 024 of 2015 is the main regulation that applies to the company’s self-generation projects, notwithstanding the rules applicable pursuant CREG Resolution 174 of 2021.

History

The company was founded in 1948. It was incorporated in 1948 in Colombia. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in 2003.