Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — BTG Pactual Latam CEO Conference 2023
21 slides from Ecopetrol Sa's conference presentation, October 2023
Slide 1: Energy That Transforms – 2040 Strategy
New York – October 2023 BTG Pactual Latam CEO Conference ENERGY THAT TRANSFORMS 2040 STRATEGY
Slide 2: Legal disclosure
Legal disclosure This document was prepared by Ecopetrol S.A. (the “Company” or “Ecopetrol”) with the purpose of providing the market and interested parties certain financial and other information of the Company. This document may include strategy discussions and forward-looking statements regarding
Slide 3: Energy That Transforms: 2040 Strategy
ENERGY THAT TRANSFORMS 2040 STRATEGY Leader in energy diversification in the Just Energy Americas Transition 1 Hydrocarbons Commitment to energy security, Low Emissions the environment and our 2 Solutions contribution to society 3 Energy Transmission, Toll Roads and Telecommunications 3
Slide 4: Topics have changed
Confirmation of greater gas potential in the Colombian Caribbean Offshore 6 No hydrocarbon development in unconventional reservoirs in Colombia Enhanced recovery outperformance Topics have changed Better results in Permian Capturing value through greater commercial activity ISA´s better performance
Slide 5: The 2040 Strategy remains, with an emphasis on a Just Energy Transition
The 2040 Strategy remains, with an emphasis on a Just Energy Transition 4. COMPETITIVE RETURNS 1. GROW WITH THE ENERGY TRANSITION EBITDA 13-14 BUSD2 in 2040: 50% hydrocarbons Maintain aspirational strategy of production levels of and 50% diversification3 ~700-750 (mboed) to 2040 Maintain transfers t
Slide 6: 2040 strategy implementation results
2040 STRATEGY IMPLEMENTATION RESULTS 2040 strategy implementation results Growing with the energy Infrastructure that underpins Competitive refineries TESG Operation transition energy security & TESG 728 mboed Increase in transported volumes Cartagena Interconnection Crude Announced commitment to re
Slide 7: Diversified exploratory portfolio adds to the Upstream competitiveness
1. GROW WITH ENERGY TRANSITION - HYDROCARBONS Diversified exploratory portfolio adds to the Upstream competitiveness Offshore Exploratory Potential 46 Opportunities 103 Prospective Resources +6 BBPE UNITED STATES Discovered C. Norte resources and +1 BBPE GOM 28 Opportunities contingents B l o c k s
Slide 8: Efficient portfolio management that maximizes asset's potential
1. GROW WITH ENERGY TRANSITION - HYDROCARBONS Efficient portfolio management that maximizes asset’s potential 800-850 709 750-760 750-800 700-750 Levers • Greenfield Development Current • Accelerate Time-to-market • Maximize value of recovery program Production Recovery • Technology implementation t
Slide 9: Robust Caribbean offshore portfolio contributing to energy security
1. GROW WITH ENERGY TRANSITION - HYDROCARBONS Robust Caribbean offshore portfolio contributing to energy security COL 7 COL 6 GUA TAYRONA Orca-1 11 offshore OFF 1 ORCA Orca Norte - 1 (2014) Volume discovered: COL 1 exploration TAYRONA Komodo - 1 contracts COL 2 (Represent the 28% of the Colombian Ca
Slide 10: We accelerate the pace of renewables to ensure competitiveness of our portfolio
1. GROW WITH ENERGY TRANSITION – DIVERSIFICATION We accelerate the pace of renewables to ensure competitiveness of our portfolio Growing energy requirement of the Ecopetrol Group >1,000 Competitiveness of the MW hydrocarbons business Enabled low emissions 1,000 solutions MW 9.5 TWh-year1 2022 Announ
Slide 11: 1 million tons of low-emission hydrogen by 2040 is our goal
1. GROW WITH ENERGY TRANSITION – DIVERSIFICATION 1 million tons of low-emission hydrogen by 2040 is our goal Important milestones of our plan 1M Aspiration @2040 Ton/year @2040 • Production of • Start of • Industrial Scale • 1st molecule of low emission mobility pilots • National market hydrogen Low
Slide 12: Growth of transmission and new energy businesses in ISA will contribute 22%-26% of EBITDA by 2040
1. GROW WITH ENERGY TRANSITION – DIVERSIFICATION The growth of transmission and new energy businesses in ISA will contribute with 22%-26% of EBITDA by 2040 Compound annual growth rate Strategic acquisition rationale ISA'S CONTRIBUTION TO THE GE (EBITDA) +7% 26% 1 GE diversification towards low- 20%
Slide 13: Commitment to water neutrality by 2045 and net zero emissions by 2050
2. GENERATE VALUE THROUGH TESG We ratify our commitment to water neutrality by 2045 and net zero emissions by 2050 Net Zero- Emissions Scopes 1 y 2 Water neutrality 50% reduction GHG reduction 25% 66% reduction in Scopes 1,2 and 3 Outstanding Achivements Methane reduction 55% captures, zero Zero r
Slide 14: Develop ST+i solutions to solve the GE's strategic challenges
3. CUTTING-EDGE KNOWLEDGE Develop ST+i solutions to solve the GE´s strategic challenges $20-30 $2.5 Cumulative Captured impact on Potential Value in EBITDA by 2040 of strategic focuses between EBITDA to enabled with technology and innovation BUSD 2018 and BUSD 2040 2022 Transition and Decarbonizatio
Slide 15: Capital allocation based on balance and efficiency
4. COMPETITIVE RETUNRS Capital allocation based on balance and efficiency Capital discipline and efficient use of resources Investments by business Differentiated criteria by business segment segment (T COP) Growth in low-emission investments Projection Discount rates 20-30 20-30 • Tailored to matur
Slide 16: EBITDA growth and greater diversification
4. COMPETITIVE RETUNRS EBITDA growth and greater diversification Competitive returns, capital discipline and cash protection Growth through EBITDA Diversification ($BUSD) 2023 2030 2040 @80 USD/BL1 4% @55 USD/BL 13% 24% EBITDA Margin >40% Hydrocarbons 16% $13 - 14 20% $14 - 17 $17 - 18 50% Transmiss
Slide 17: Effective mitigation of balance sheet risks
Effective mitigation of balance sheet risks Cash Balance FEPC Balance COP T COP T 5.2 10.7 13.0 30.9 ➢ Pending compensation of the FEPC balance for 26.3 8.4 18.1 COP 13.2 T, with 2.5 2.6 dividend payment to the 0.5 13.0 Nation 2022 Operating Capex Debt Dividend Exchange 1H23 2022 Compensation 1H23 1
Slide 18: Key takeaways
Key takeaways The promise of the 2040 ISA's strong Strategy is upheld, We accelerate our goals performance and better preserving the value of the for the integration of outlook leverages hydrocarbon business and unconventional diversification into accelerating new low- renewable energy as a electric
Slide 19: We are energy that transforms
WE ARE ENERGY THAT TRANSFORMS
Slide 20: Robust financial indicators adjusted to new market variables
Robust financial indicators adjusted to new market variables Ecopetrol Group’s Indicators 1H23 ROACE1 EBITDA Margin2 EBITDA Contribution* By Business Hydrocarbons Transmission Low 17.1% 49.9% Line and Toll Roads Emissions 14.8% 48.1% 6% 18% 15% 16% 17% 25% 9.1% 78% 81% 85% 44.3% 57% 1H23 1H23 1H23 1
Slide 21: Historical execution of the 2023 Investment Plan
Historical execution of the 2023 Investment Plan Business Line Geographic Location Type of Investment Hydrocarbons COP T COP T COP T Colombia Operational Continuity* Low Emissions Other Geographies 12.3 Growth 25.3 – 29.8 30.0 14.0 Transmission and Toll Roads 12.3 12.0 25.0 4.9 8.7 3.0 20.0 5.0 10.0