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2020+ Strategy

Apr 30, 2020

Mission

Ecopetrol works every day to build a better future that is profitable and sustainable, with a healthy, clean and safe operation. Likewise, Ecopetrol ensures operational excellence and transparency in each of its actions by building mutually beneficial relationships with stakeholders.

Vission
Ecopetrol will be a world-class integrated oil and gas company, oriented to the generation of value and sustainability, with a focus on Exploration and Production, committed to its environment and supported by its human talent and operational excellence.

 

  • The Ecopetrol Group's Strategy has evolved since its transformation goal began in 2014, prioritizing value over volume. This strategic approach has allowed the achievement of excellent financial results, fulfilling the promise of value for its shareholders and for the country.
  • The 2020+ strategy of the Ecopetrol Group addresses the challenges of the environment, seeking to maintain competitiveness and sustainability in scenarios of greater volatility. Ecopetrol will continue to be strategically oriented towards creating value as an integrated business group. The pillars of this strategy are growth in reserves and production based on strict capital discipline and cost efficiency and cash protection.

  • The growth of the Ecopetrol Group is focused on the Upstream segment. The main growth levers are associated with the use of current assets and exploration in Colombia, diversification through internationalization and inorganic growth, and the development of Hydrocarbons in unconventional deposits in Colombia and the United States.
  • For the Midstream segment, the focus has been established on the implementation of operational efficiencies in oil pipelines and multiple pipelines, as well as capturing opportunities derived from the growth in fuel demand and the integrated management of the business chain, strengthening logistics aspects.
  • For the Downstream segment, the focus will be on capturing value from optimizing current assets and maximizing synergies between refineries, maturing investments to increase conversion, and profiting from investments in petrochemicals and refining.
  • This strategy is leveraged by enablers that allow its compliance, among which stand out the energy transition, digitization and technology through digital transformation, the strengthening of the Gas business, the governance model, the HSE policies and guidelines, and the efficiency and transformation.
  • It is worth mentioning that the business strategy seeks to strengthen the themes of ESG and Corporate Responsibility for full compliance with the United Nations Sustainable Development Goals and respect for Human Rights, as well as compliance with all business guidelines in terms of Ethics and Compliance.
  • The business strategy seeks competitiveness and sustainability, having as fundamental pillars the growth of reserves and production, strict capital discipline, cash protection and cost efficiency.

  • Strict capital discipline allows resilience to price declines
  • Cash protection and cost efficiency are the basis for competitiveness and have allowed us to have the EBITDA and Net Income results of recent years.
  • The growth of reserves and production focuses on 4 growth axes seeking to increase the half-life of the reserves and ensure a sustainable segment:
  1. Existing Fields
  2. Exploration in Colombia
  3. Unconventional Reservoirs
  4. Internationalization and active development of M&A.

 

  • The strategic objectives of the segments are summarized below:
  1. Finally, the Downstream's strategic objective is to adapt to the changes resulting from the energy transition in terms of fuel specifications and price environment. Likewise, it is expected to achieve optimization through improvement initiatives in refineries with a focus on high-profitability and medium-term projects.
  2. Regarding the midstream, the strategic objectives are focused on the feasibility of barrels through the optimization of rates and unit costs. This would be achieved through the analysis of different business alternatives and proposing a new management model in which Cenit has an innovative role in the logistics chain.
  3. In the Upstream, it seeks to increase the life of reserves and maintain the size of the company through an investment focused on projects that are profitable in low price environments, achieving a diversification in geographies, plays and products.
  4. Marketing: Ecopetrol is aware of the new challenges imposed by the environment and the implications of the energy transition and sustainability. For this reason, it has challenged its strategy so that it, through contribution models and value creation, strengthens its contribution to the achievement of global objectives, associated with the environment and the human being.

The corporate strategy is implemented through a three-year business plan prepared by the financial area and updated every year. This business plan can be consulted at the following link:Business Plan 2020 - 2022

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