Society

to contribute to sustainable development
and to the well being of society.

Looking through the prism of Ecopetrol’s social responsibility, the aspects of its presence in the society that have the greatest impact on the quality of life of Colombians, and especially of the communities that share the oil production zones with the company, are: Voluntary social investment Environmental investment Contributions in the area of air quality The Colombian Petroleum Institute’s research

Voluntary Social Investment

In 2007 Ecopetrol made voluntary social investments that benefited a million and a half Colombians in 169 municipalities in 24 provinces.

The investments were focused on three lines that the company calls its “Flagship Programs”: education, infrastructure (including roads, water, sewage, and rural electrification), and economic development – productive projects. Close to 70% of the company’s voluntary social investment was concentrated in these lines.

They are ‘flagship’ programs as they have the capacity to drive development. Education develops human capital for the future. Infrastructure facilitates communication between people and integration between regions. Productive projects take advantage of the productive vocations of communities, reducing their financial dependence on the company and the extractive oil industry.

Investments in seven areas of intervention totaled $73,148 million (80% more than in 2006), some US$36,3 million*. When this amount is added to investments made by associates in the same projects and investments made by Ecopetrol through business dealings with other companies, it comes to a total of $155,840 million.

Ecopetrol invests voluntarily by identifying local development opportunities through its social promotion agents and by mutual agreement with the authorities and the communities.

A project is presented to a committee created to evaluate the social investment opportunities in the Corporate HSE Office. The commitee analyzes the project’s viability and authorizes Ecopetrol’s participation.

The company also has a series of programs throughout the country that are now well recognized in the communities in the company’s areas of influence.

Volunteerism

In 2007 Ecopetrol’s volunteer program was officially launched, called “Ecopetrol Solidaria” (Ecopetrol Expresses Solidarity) with two Colombian foundations: “A Roof for Colombia” and “Dividend for Colombia”.

This nation-wide initiative is in addition to other initiatives that Ecopetrol employees in the different regions of the country have undertaken and been committed to either individually or in groups.

‘Ecopetrol Solidaria’ develops voluntary social initiatives by company employees and creates an additional arena for exercising the values shared by all the company’s workers in their daily lives: responsibility, integrity, and respect.

Social Incidents

Social incidents are actions originating outside of Ecopetrol that affect its operations. The intensity or effect of a social incident is measured using a risk assessment methodology (RAM).

At Ecopetrol, the social promotion agents, hand in hand with the operation, are in charge of preventing and responding to social incidents.

In 2007 there were two events of this type: In August in Aipe, Huila, and in November, in the La Cira Infantas Project in the village of El Centro in Barrancabermeja, Santander. Both events had their origin in community protests over salary and hiring issues.

Foundations

As an associate, or through alliances and shared interests, Ecopetrol is tied to the following petroleum foundations in Colombia:

There are more than 450 and they are already working!

The Program for Social and Job Retraining for ‘Pimpineros’ (Illegal gasoline vendors) in which Ecopetrol is involved was designed to educate people dedicated to the illegal sale of gasoline and to facilitate their return to legitimate work.

In 2007, 457 people dedicated to illegal fuel sales in Cúcuta and its metropolitan area received comprehensive training under the guidelines from Acción Social at the Office of the President of the Republic, and were placed in 146 companies. Six productive projects were also established among them.

Eighty-four business plans have already been developed as a result of the training, and in 2008 they will move on to the support phase for productive projects, and could even be leveraged with loans of seed capital. During 2007, of 369 people certified in Phase I of the Retraining Program, 122 of the beneficiaries were from Cúcuta and Ocaña. They received loans in the amount of $186 million pesos.

To extend this program to other regions with the same problem, a firm was hired to diagnose the situation in La Guajira, Arauca, Vichada, and Guainía.

Based on the results of the program and these diagnoses, agreements were signed with Norte de Santander, La Guajira, and Arauca, at an approximate value of $3,820 million.

Environmental Investment

In 2007 scientific reports, news, documentaries, and political forums called on the people of the world to change their perspective toward the planet.

In just one of many events, in February the United Nations Intergovernmental Panel on Climate Change (IPCC) warned in Paris that the earth would experience global warming of between 1.8 and 4 degrees in the twenty-first century, the sea level could rise from 28 to 43 centimeters, and the occurrence of destructive weather phenomena would increase in frequency. Reports from the Convention on Biological Diversity also indicated that during the century to come numerous species would simply not be able to adapt quickly enough to the new planetary conditions, and that many of them would have to move to regions more apt for their survival. The United Nations encouraged joint measures to put a brake on these threats to the loss of biological diversity.

Environmental issues have been, and will continue to be in years to come, fundamental in Ecopetrol discussions.

This commitment, given expression in the company’s strategic framework and its Responsibility Statement, was materialized in $303,670 million pesos, some US$150,4 million* dedicated to environmental issues.

Environmental Incidents

In 2007 the environmental incident indicator improved over prior years. Incident frequency went down by 33%, going from 88 incidents in 2006 to 59 in 2007.

The Environmental Incident Indicator covers spills from operational causes that generate an environmental impact, and effluents and atmospheric emissions that surpass the thresholds described in the standards.

Of 59 environmental incidents, 53 correspond to operational spills, three to emissions, and three to effluents above the threshold.

Climate Change

With help from the Office of Climate Change at the Ministry of Housing Environment, and Regional Development, the company worked on terms of reference to build a portfolio of clean development mechanisms, which will be defined in 2008. Once defined, the portfolio’s implementation will begin in the company’s different areas of operation.

Tax Benefits from Environmental Investments

The Colombian’s tax laws include a tax benefit called “income deduction for environmental investment.” It is applicable to any investments above and beyond those established by legal mandate. During the first half of 2007 Ecopetrol engaged in the procedure to obtain this benefit based on the environmental investments it made during 2006.

The final value of the environmental investment certificates after tax adjustments from the year 2005 was $27,409 million pesos. This figure allowed the company to obtain an income tax deduction of close to $10.5 billion pesos.

Contributions to Biodiversity

For years Ecopetrol has participated in projects to assess, protect, and conserve biodiversity in the ecosystems in its areas of influence. Its concern is demonstrated in the 13 initiatives in execution in 2007. They include:

• Comprehensive Management of the Piangua Resource in the Tumaco Inlet (Nariño).
• Artificial Reefs in the Gulf of Morrosquillo (Córdoba and Sucre).
• Oso Hormiguero Park (Anteater Park) (Huila).
• Recovery and Maintenance of 65 hectares of freshwater
• in the Palagua, Barbacoas, and El Encanto Marshes (Santander).

Air Quality and Fuel

In 2007 Ecopetrol made commitments to improve fuel quality, and honored them with investments and projects that are now being executed. These efforts were in addition to meeting the country’s environmental regulations, including those relative to the amount of sulfur in diesel and gasoline.

The five main projects for improving fuel quality required investments of close to US$4.6 million. The majority of the resources are intended for modernizing the refineries in Barrancabermeja and Cartagena, where hydro-treatment facilities will be built to produce low sulfur diesel and gasoline.

The two main projects made significant advances in 2007. In Barrancabermeja bids were awarded for the purchase of the main pieces of equipment and the work in the field began. Meanwhile, in Cartagena, progress was made in the definition of the configuration of the refinery expansion project and in the respective contract processes.

The plan for fuel improvement focuses not only on the projects at the two refineries, but also includes three other fronts: Imports of high-quality diesel to make blends, entry into the biodiesel market, and promotion of compressed natural gas for vehicles.

Together, these five initiatives will enable Ecopetrol to commit to delivering diesel to Bogotá of less than 500 parts per million of sulfur in July 2008 and of less than 50 parts per million by the end of 2009. Those commitments will be supervised by national and district environmental authorities, while their compliance will be certified by independent laboratories making random measurements at fuel delivery points.

Research and Development

The work of the Colombian Petroleum Institute (ICP) helps Ecopetrol carry out all the activities in the petroleum value chain according to the best technological standards possible.

The Institute is also in charge of protecting Ecopetrol’s intellectual ownership of all the products it develops and heading up knowledge management inside the company.

By providing this service to Ecopetrol, the Institute contributes to the well being of all Colombians.

The Institute functions as a science and technology enterprise with efficiency and profitability indicators derived from the service that it offers not only to Ecopetrol, but also to the entire oil sector in Colombia and Latin America.

The results for the year 2007 indicate that for the fourth consecutive year the Institute’s value added has surpassed the goal set. This success is the result of the consolidation of the management system, and of the reduction of operational costs and the manhour rate.

The ICP’s technological developments applied to the operation generated benefits for Ecopetrol of US$ 290 million. Of that total, Ecopetrol’s businesses paid the Institute US $40.4 million in proven benefits resulting from the projects carried out. This amount surpassed the goal of US $35 million proposed for 2007.

The ICP laboratories provided their services to internal businesses for a value equal to US $13.3 million, while another US $3.2 million were invoiced to other companies in the domestic and international oil sector.

The Products

In 2007, 23 new technological products were patented, for a total of 113 in the Institute’s history, and nine specialized software programs were registered with the National Department of Authors’ Rights (DNDA for the Spanish), in order to protect intellectual ownership. These nine programs are in addition to the 81 registered in the past.

Special Forums

In exercise of its role of monitoring the technological environment, the ICP held two specialized forums in 2007, one on “Maintenance, Equipment Integrity, and Operational Reliability,” and another on “Knowledge Management.” Both had the participation of the national and international scientific and academic communities.

Guatiguará Technological Park

Ecopetrol is one of the promoters of this park in the metropolitan area of Bucaramanga, Santander, and is a founding partner of the technology development centers on corrosion, natural gas, and asphalts. In addition, it encourages the companies involved to create new spin-off companies and make use of those already in existence.

Grupos Ondas and Incubators for Scientific Training

Through an agreement with Colciencias, the company has become involved in the Grupos Ondas project for the appropriation of science and technology by children and young people.

The methodology encourages children and young people to carry out investigations with their teachers and with the accompaniment of institutions and people involved in the country’s scientific and technological development. The work in San¬tander includes 173 projects in 63 educational institutions, involving 227 teachers and 1,398 children and youth.

Also during 2007, 291 research incubators were connected with the ICP through different technological cooperation agreements: 130 at undergraduate level and 161 thesis students at different undergraduate and graduate levels.

S&T Technical Standards for Colombia

Ecopetrol is a member of the ICONTEC Technical Standards Committee No. 217 on the management of research, development, and innovation, which was established in May 2007. Its objective is to develop, over a one-year time period, a minimum of two standards for managing research and development in the country, including standards for organizational aspects and the definition of research and development activities in companies, in order to promote a culture of research.

To date, Ecopetrol’s contributions have targeted the definition of the concept of innovation, the characteristics of the research and development process for products and software based on ICP’s experience, and the presentation of Ecopetrol’s specific innovation model.

*Dec 31, 2007 exchange rate $2,014.76 Only key figures in this Report are in thousands dollars, using convenience translation.