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Finances
Other Legal Provisions
The company, in compliance with Law 603/ 2000, has
adhered to the indications related to the evolution of its
economic, administrative and legal situation, as follows:
- As far as we know, there have been no events or
transactions taken place after December 31, 2006
that have a material bearing on the balance statements
of that date.
- The company has approved a monitoring and management
budget based on a WTI reference price of US$55
a barrel for the 2007 tax period, a decline in the country’s
production (Ecopetrol and its partners) of 1%,
equivalent to 522 Kbd, the drilling of 13 development
wells, the acquisition of 2,500 km of seismic data, a
decrease in fuel theft, the adaptation and expansion
of the transportation systems to handle heavy crudes,
improvement in refining performance and reliability,
an increase in conversion and profitability, the production
of clean fuels and the strengthening of the
petrochemistry business.
The aspects pointed out in addition to the operating
aspects that have a bearing on the result and are
contemplated in the budget for the 2007 period are
expressed at an average revaluation of 1.9% of the
peso as compared to the dollar, the inclusion of the
$668 billion gasoline and diesel subsidy as income,
the increased transfers and contributions to the
State through dividends, taxes, royalties and the
application of Decree 2625 / 2000, and the effect
of the profit of the portfolio backing the funds for
post-employment obligations. It also contemplates
the capitalization of Ecopetrol, whose purpose is to
obtain resources to fulfill the strategic goals in the
medium term.
In the Confis scenario, monitoring and management
budget of income and expenditures approved by the
Board of Directors for 2007 amounts to $22.7 trillion,
which includes $4.77 trillion for investment, in order
to achieve the Mega put forward in the company’s
Strategic Framework. This same scenario, brought
into line with a profit and loss statement, of monitoring
and management, would enable the company
to obtain a net profit of $3.86 trillion and an Ebitda
of $8.07 trillion.
- The company has had a favorable legal evolution.
Although the number of lawsuits against Ecopetrol
was sustained (2,285 to December 31, 2005 and 2,287
to December 2006), the accounting reserve for legal
proceedings rose from $195.5 billion to $253.5 billion,
respectively. The legal management indicators of 2006
are satisfactory, although the success rate in proceedin
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