Production

Efforts to mitigate the decline production curve and to incorporate new reserve volumes in the Ecopetrol operated fields rendered positive results at the end of the year 2007.

The company-owned production amounted to 399 Kbpde, l5 Kbde above that recorded in 2006, out of which 326.6 Kbd are attributed to crude and the rest to natural gas.

The result of the above increment stems basically from new heavy crude projects in the Eastern Plains region, the optimization of mature fields, and the investments made to increase the recovery factor.

The increased production volumes of Ecopetrol and the National Hydrocarbon Agency allowed for the second consecutive year to stop the decline recorded since 1999 in the domestic production of crude. At the end of the year, it reached 531 Kbd, vis-à-vis 529 Kbd in the year 2006.

The increased contribution from Ecopetrol was reflected on its associate operation fields, with a 10% increase as compared with 2006, from 159 Kbd to 175 Kbd in 2007, mainly as a result
of good performance in the Rubiales, Nare, Cosecha, Caricare and Caño Limón fields.

Production from directly operated fields amounted to 151 Kbd, resulting from the drilling campaigns in Castilla, Tenay, Tello, La Cira, Casabe and Orito.

Performance of dynamic development drilling campaigns in areas such as the Eastern Plains and the Middle Magdalena and the application of new technologies led to the drilling of 120 development wells during the year 2007, 54 more than in 2006, and 104 more than in 2003.
One of the most important components of the results is the production of heavy crude. The Rubiales field increased its production from 11.7 Kbd in 2006 to 18.7 Kbd in 2007.

Ecopetrol proven reserves amounted to 1,456 million barrels of oil equivalent (Mboe), which is a 7% reduction as compared to 1,558 Mboe in 2006. This means that the replacement of equivalent reserves was 33%, as it produced 148 Mboe throughout the year, while it incorporated 46.6 Mboe in the same period.

The oil remnant proven reserves of Ecopetrol decreased from 1,129 million barrels in 2006 to 1,022 in 2007. On the contrary, natural gas showed an increase in proven reserves from 2,407 gigas in 2006 to 2439 gigas in 2007.

Efforts to increase production demanded investment of US$3,115 million in the last five years. Just in 2007, it added up to US$1,157 million, 40% more than in 2006, which meant unprecedented resources that helped the company improve its operating standards
and mitigate its environmental impact.

SPECIAL PROJECTS

Heavy crude

Heavy crude production continued to increase in the year 2007 and became a pillar for the growth of Ecopetrol. To be highlighted are the Cubarral block, mainly Castilla, operated directly by Ecopetrol; Nare-Teca, in association with Mansarovar (made up of Sinopec from
China and ONGC from India); and Rubiales, in association with Metapetroleum.

During the period 2000 – 2007, investments amounted to nearly US$850 million ($176 billion) to triple production of these crudes, which increased from nearly 30 Kbd to 98 Kbd.

Rubiales contribution was material also, as it increased production from 12 Kbd in 2006 to approximately 18.7 Kbd in 2007, where Ecopetrol invested US$38.4 million to drill 21 wells and to upgrade fluid treatment facilities.

Close to US$95 million were invested in the Teca and Nare fields ($197 billion) to drill 133 wells and build the fluid treatment and water discharge facilities. The projection includes production of 21 Kbd in 2008 and 30 Kbd in 2011.