Downstream

Refining and Petrochemistry

In 2009, 51% of the equity interest in Reficar S.A. was reacquired.

This enabled the company to optimize the investment to modernize the two refineries (Barrancabermeja and Cartagena) with estimated savings of US $911 million as a result of their integrated operation mechanism.

The Barrancabermeja Refinery’s hydrotreatment project, which is the largest project in the history of  refineries in Colombia, is intended for production of diesel and gasoline of 50 and 300 parts per million (ppm) of sulfur respectively.  In the year 2009, it ended with 94.4% progress, and it is expected to begin operating in the first half of 2010.

As part of the development of the petrochemical plan at Ecopetrol, polyethylene production capacity at the Barrancabermeja Refinery was stepped up by 10,695 tons per year, which represents a 19% increase. Propylene deliveries to Propilco increased by 31,970 tons per year, that is to say, 36%.
The Barrancabermeja Refinery’s average feed decreased in 2009, in comparison with 2008, since the market conditions did not generate the financial conditions to process at maximum feed.

The Barrancabermeja Refinery hydrotreatment
project will start operations in the first half of 2010.

The gross refining margin for 2009 at the Barrancabermeja Refinery was US $4.41/barrel, demonstrating an increase as compared to 2008 (US $3.53/barrel), due to better margins in the price of fuel oil, which was approximately 97% of the WTI price in 2009, compared to 76% in 2008, and the lower average cost of raw materials between one year and the other (US $56.25 vs. US $96.24/barrel).

Operating reliability of the Barrancabermeja Refinery was 93.41%; this result was affected mainly by unscheduled stops and feed limitations. The result obtained by the Cartagena Refinery went beyond the goal with 95.9% reliability.

Volumetric compliance in crude feedstock was 98%. The result was affected by the fire in the U200 atmospheric distillation unit and the events in the 250 unit at the Barrancabermeja Refinery.

Environmental results are satisfactory, with five environmental incidents between the two refineries, two below the limit committed for 2009.

Investments of both refineries amounted to US $727 million (1.67 trillion Pesos), 77% higher than the previous year.

Allocation included, among others, US $250 million (575 billion pesos) to amortize the purchase of 51% of Reficar and US $557 million to execute 81 projects at the Barrancabermeja Refinery. This includes the industrial services master plan and a 12-plant consolidated organizational plan, as well as the construction of a centralized control building.