Planning

In 2007 Ecopetrol reviewed and approved its strategic framework for the period 2008-2015 with the aim of adjusting to its new conditions as a mixed economy corporation, to the globalization projects, and to efficiently respond to the milieu and to over 480,000 new stockholders.

To support these processes, a budget of $32 trillion was defined for the year 2008, $8 trillion of which will be devoted to investment.

Said budget was approved by the Board of Directors in October- November, 2007.
Likewise, the Performance Measurement and Management Committee met quarterly to assess the management and projection of key company results to enable assessment of its fulfillment of the strategic plan.

Milieu

Ecopetrol management results were generated in an international setting, characterized by high oil prices.

In addition, the development of non-conventional energy products and biofuels, fostered by greater environmental social awareness and the growth of demand from China, India and Russia, are the key market influencing factors.

The increased availability of heavy and sour crude maximized investments to upgrade the refining and transport infrastructure all over the world, while gas continued to evolve, particularly in Russia and the Middle East. In the region, outstanding projects were
carried out in Bolivia, Perú, Trinidad and Tobago, and Argentina.

At a domestic level, there was more activity of the National Hydrocarbon Agency (ANH) and over one hundred companies engaged in the search for oil and gas. The participation of Ecopetrol in the projects undertaken by the ANH rendered favorable results, having
obtained several blocks in the Caribbean Round and in the Llanos Foothills.

Valuation of Ecopetrol

To determine the value of the company and to enable the General Shareholders Assembly to set the share price, two private banks consortia were hired to conduct such studies, the temporary unions of JP Morgan - Credit Suisse and Citi - Merrill Lynch. This contracting was performed pursuant to the provisions of Law 1118 of 2006.

Ecopetrol was valued as an integral company in the hydrocarbon industry, whose industrial and commercial operations benefit from its market share and infrastructure to undertake new projects. It was also valued as an ongoing concern, engaged in the development of its proven, probable and possible reserves, added to the expectations to find new reserves as per its exploration plan.

All these reserves translate into cash revenues through domestic sales and/or exports of crude and gas and transformed products such as refined and petrochemicals.

International methodologies and standards were used in the study to valuate oil industries worldwide, that is, discounted cash flow, multiples of comparable companies, and previous transactions.

For purposes of this valuation, the production profile of proven, probable and possible reserves was used, as per the reserves certification provided by three internationally renowned auditors: Ryder Scott Company, Degolyer and MacNaughton y Gaffney Cline & Associates Inc.

Alter receiving the studies from the investment banks, on August 14, 2007, the General Shareholders Assembly set the company’s value in US$24.8 trillion and its net worth in US$27.7 trillion.

A 6% discount for the primary issue was applied on the net worth, as per a practice used in initial stock offerings and as an incentive to investors. After applying such discount, the value was set in US$25.5 trillion, which was the base to set the price of the share in 1,400.

Strategic Framework 2008 - 2015

Beyond its financial and operational results, Ecopetrol, between the end of the year 2007 and early in 2008, defined its new strategic framework for the next eight years, committing to ambitious, measurable goals in each of its management areas. The new strategy
also implied adjustments in the vision and mission of the company.

As part of the objectives of the strategic review, the exercise focused on three fundamental aspects:

• Growth
• Integration
•Corporate Social Responsibility

The goal is to grow, with an increased share in the petrochemicals and biofuels market, and operating beyond the American continent.

To achieve these goals, Ecopetrol must keep on generating value through the integration of its various corporate areas in two development lines: heavy crude and gas.

It is also worth highlighting two new strategic lines: petrochemicals and energy diversification, as well as the distribution of fuels that will enable the increase of the supply, with benefits for market clients and actors.

By entering the petrochemical business, the company intends to use synergies associated with the availability of raw material, the integrated operation with the refineries, and a more active participation in the downstream business.

Through energy diversification, it intends to use to the maximum extent possible other high potential energy sources, namely biofuels and electric power generation based on gas
from production fields, or coke.

As regards other growth leveraging strategic lines, investment and supporting activities will be increased. The more outstanding aspects are:

• Exploration:be a global company, active in the search for hydrocarbons
in frontier areas.
• Production: increase the recovery factor of the fields to 34%.
• Refining:modernize the Barrancabermeja and Cartagena Re- fineries to reach an increased heavy crude load, raise the conversion factor to 95%, deliver 50 ppm sulphur fuels, and optimize the operation of plants and industrial services.
•Transport and logistics:leverage growth and facilitate business integration, with emphasis on the heavy crude infrastructure.
• Distribution and commercialization:brand positioning and entering the segment of lubricant and fuel distribution, in regional markets.

Intensified activities in the various areas of the business are intended to achieve an average 12% growth in the period, which will position it 27th in the ranking of Petroleum Intelligence Weekly.

To achieve such growth, a business management excellence model was also developed, which will enable the consolidation of the growth strategy.

Investment Plan 2008-2015

	2008-2011	2012-2015
Exploration	2.215	3.560
Field Development1	7.990	14.155
Purchase of reserves	10.305	-
Refining	5.670	5.675
Transport and Supply	1.275	1.170
Petrochemicals	1.930	2.070
Biofuels	470	120
Distribution and commercialization	2.800	-
Corporate and organizational consolidation	425	90
TOTAL	33.080	26.840

1 Includes the development of reserves incorporated by the Exploration business. Figures estimated in million dollars Planning