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Alberto tovar durate's presentation slides from the 2010 World National Oil Companies Congress
- 1. Ecopetrol: An evolving NOC, mitigatingEcopetrol: An evolving NOC, mitigating risks and managing costsrisks and managing costs World NOCs Congress June 2010, London UK Alberto Tovar Duarte E&P New Business Manager
- 2. DISCLAIMER This document was prepared by Ecopetrol S.A. with the purpose of providing certain information about the Company. This document may include strategy discussions and forward-looking statements regarding the probable development of Ecopetrol’s Business. Said projections and statements include references to Company estimates or expectations relative to its future and operational results. Potential investors and the market in general should be aware that the information provided herein does not constitute any guarantee of its performance, risks or uncertainties that may occur or materialize. Actual results may fluctuate and differ from those provided herein due to several factors beyond the control of the Company. Neither Ecopetrol nor its advisors, officers, employees, directors or agents, make any representation nor shall they assume any responsibility in the event that the actual performance of the company differs from what is provided herein. Moreover, Ecopetrol, its advisors, officers, employees, directors or agents shall not have any obligation whatsoever to update, correct, amend or adjust this presentation based on information attained or events occurred after its disclosure. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with the oral briefing provided by Ecopetrol. Neither this presentation, nor any of its contents may be used for any other purpose without the prior written consent of Ecopetrol. 2
- 3. 3 Ecopetrol an evolving NOC Long term planning and diversification Consolidation Strategy
- 4. 4 Ecopetrol an evolving NOC Long term planning and diversification Consolidation Strategy
- 5. Fourth in Latin America, 38th in the world, according to PIW 12% production growth in 2010 Refining capacity of 330 Mbopd Solid transport infrastructure Sound financial indicators* • Revenues: $8.7 billion • EBITDA: $4.1 billion Peru Brazil Golfo de Mexico Medium Magdalena Northeast Sur CentralColombia Ecopetrol Presence Cartagena Refinery Barrancabermeja Refinery 5 *Data of march 2010 Largest company in Colombia with strong operational performance and healthy financial metrics Key highlights Location
- 6. In recent years, Ecopetrol has undergone a permanent transformation motivated by the hydrocarbon sector reform in Colombia by 2003 2003 200620052004 2007 2008 Internal Transformation 2003 Decree 1760/03: Industry Transformation Process Competitive sector Creation of Hydrocarbon National Agency (ANH) Management System Operational Excellence Corporate Governance standards 2006 Law 1118/06 delivering Administrative and Strategic Autonomy- Capitalization Authorization 2007: Initial Public Offer (10.1%) US$2.8bn New corporate image 2008 : ADR, NYSE listing 2006-2008: Ecopetrol ventures in Peru , USA Gulf of Mexico and Brasil 2008: Acquisition of Propilco (Polypropylene 400 Kton/year) 2009: Acquisitions in Colombia and Peru (Hocol, Reficar, Ocensa, OIG-Savia) Transformation Process 2009 Milestone Domestic and International expansion
- 7. For ECOPETROL, the IPO and strategic and operational autonomies, were key drivers to define a long term business plan and consolidation strategies. source: PFC, Energy, Evolution of successful NOCs, 2010, modified by ECP EcopetrolEcopetrol
- 8. 8 Ecopetrol an evolving NOC Long term planning and diversification Consolidation Strategy
- 9. Today, Ecopetrol is a conglomerate with an clear business plan and specific goals for each one of its business lines and companies. TO PRODUCE ONE MILLION BARRELS OF OIL EQUIVALENT PER DAY CONSOLIDATE A BUSINESS MODEL MANAGEMENT TO LEVERAGE OUR GROWTH STRATEGY Ecopetrol has Corporate governance bylaws and provisions with clear rules for decision making process and to develop sustainable relationships with stakeholders.
- 10. 10 Refining Petrochemical Biofuels Transport and Logistics Gas Deep conversion, clean fuels production and increased capacity Increase participation on the national an regional petrochemical Ecopetrol will be the leading producer of biofuels in Colombia Guarantee the logistics to make oil, gas, derivative and biofuel production viable Consolidate natural gas as a profitable business for Ecopetrol Objective Goal 2015 Capacity 650 MBOED Production 2700 Mtons/yr Production 450 Mtons/yr Revenues US$128/yr Sales 1,100 GBTU An integrated company diversifying with different kind of businesses such as Oil & Gas, Petrochemical and Biofuels.
- 11. 11 Ecopetrol Business Group supporting the development of the strategy Exploration and Production Refining and Petrochemical Oil and Multi- purpose Pipeline Transport Biofuels 2007 2008 2009 49% 100% 35% 50% 80%50% 65% 60% OLEODUCTO DE COLOMBIA S.A. 65,75% 85%
- 12. USA-Gulf of Mexico 2009: 130 blocks 4 wells Brazil Exploration 2009: 7 blocks 1 well Perú 2009: 5 blocks / 6 TEAS 12 Diversification of national and international exploration portfolio Long Term > 2013 Medium Term 2011 – 2013 Short Term 2009 – 2011 Caribbean Sea Pacific Ocean Ecuador Venezuela Perú Brazil Panama Colombia International
- 13. 13 Diversification with different partners 5 blocks Peru Brazil United states Brazil ¹ Other shareholders: Eni 13,4%, Conoco Phillips 12,4%, Mitsubishi Corporation 11,6%, Nippon Oil Corporation 11,6% Gulf of Mexico Perú 1 production Block - K2 Production Ecopetrol: 1.2 KBPED Anadarko (operator) 41,8%¹ Ecopetrol America Inc. 9,2% Savia – (Petro-Tech) Ecopetrol’s proven reserves (P1): 42.5mmboe² Ecopetrol’s production: 6 KBDC Ecopetrol 50% Korea National Oil Corporation – Knoc: 50% ² Estimated by Ecopetrol 7 blocks 103 Exploratory blocks
- 15. 15 Integrated International Energy diversified Partnerships Organic & inorganic growth Ecopetrol a global energy company Diversification helps to mitigate business risks.
- 16. 16 Ecopetrol an evolving NOC Long term planning and diversification Consolidation Strategy
- 17. Organizational Consolidation Generate conditions to guarantee results and leverage growth Main strategic goals 2015 17
- 18. 18 Human talent Operational Excellence Project Management Supply Management Financial Excellence Have the skilled Human Talent required to achieve the strategy Take the company to international standards as regards performance and efficiency in HSE and operation Guarantee effective project management by implementing the best practices Add value by means of the reliability of the Supply Chain leveraged in competitive Suppliers Create value for shareholders by guaranteeing the availability of funds to execute the strategy Objective Goal 2015 Top 10 companies to work for in Colombia Accident Rate 1.13 Environmental Incidents: 32 IPA 1er Quintile Debt / EBITDA Rate ≤ 2.0X Cost Optimization 6%
- 19. 19 Technology, Knowledge and Information Corporate social responsibility Strengthen technological development and innovation by guaranteeing knowledge and information Ecopetrol will continue to work observing excellence levels in corporate reputation on the domestic and international scenarios Objective Goal 2015 Technological Advantages developed 15 Be part of the Dow Jones (2011) Sustainability indices and in the Gold Category (2015) All of these areas are key factors to excel in managing costs.
- 20. As a result of these strategies, Ecopetrol has gotten an important growth in the production level… SAVIAECOPETROL HOCOL K2 15% 12%
- 21. …and good financial performance due to operative results. ROE Revenue 24% - Ebitda 27% Op. Profit 36% - Net Profit 53% 21
- 23. For restricted use of Ecopetrol. All rights reserved. No part of this presentation may be reproduced or used in any form or by any means without explicit permission from Ecopetrol. MachadoyMolinaAsociados2008 ENERGY FOR THE FUTUREENERGY FOR THE FUTURE