traducir energy for the future investor presentation...energy for the future investor presentation...
TRANSCRIPT
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1
Cartagena, Abril de 2012
traducir
ENERGY FOR THE FUTURE
Investor Presentation
Seminario Oportunidades de Inversión 2012 - Larrainvial
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This document was prepared by Ecopetrol S.A. 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 the probable
development of Ecopetrol’s Business. Said projections and statements include references to estimates or
expectations of the Company regarding its future and operational results. Potential investors and the market in
general should be aware that the information provided herein does not constitute any guarantee of its
performance, risks or uncertainties that may occur or materialize. Real results may fluctuate and differ from
those provided herein due to several factors outside of the control of the Company. Neither Ecopetrol nor its
advisors, officers, employees, directors or agents, make any representation nor shall assume any responsibility
in the event actual performance of the company differs from what is provided herein. Moreover, Ecopetrol, its
advisors, officers, employees, directors or agents shall not have any obligation whatsoever to update, correct,
amend or adjust this presentation based on information attained or events occurred after its disclosure.
This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed
solely in conjunction with, the oral briefing provided by Ecopetrol. Neither this presentation nor any of its
contents may be used for any other purpose without the prior written consent of Ecopetrol.
Disclaimer
2
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Agenda
Ecopetrol´s performance and 2012-2020 strategic plan
Colombia: a relevant player in O&G
Ecopetrol's solid financial results lever future growth
Ecopetrol: a great investment opportunity
3
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Colombia:a relevant player in O&G
4
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0
100
200
300
400
500
600
700
800
900
1.000 Total Oil Production in Colombia* and Milestones(thousand barrels per day)
1
2
3
45 6
7
*Total country (Ecopetrol + other companies)Source: Revista Semana , National Hydrocarbon Agency (ANH), Colombian Petroleum Association (ACP) 5
Colombia reaches record oil production
Key milestones:1. Beginning of oil production in Colombia (1922)2. Ecopetrol’s incorporation (1951)3. Discovery of Caño Limón field (1983)4. Discovery of Cusiana and Cupiagua fields (1988) 5. New hydrocarbon regulation: royalties and contracts (2002-03)6. Incorporation of the National Hydrocarbon Agency - ANH (2003)7. Ecopetrol´s IPO (2007)8. Ecopetrol’s second round of primary share offering (2011)
2011914 mbod
8
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Area under exploration
Colombia´s exploration area increased 8X since 2003
200312.5 million hectares*
Total contracted and reserved area 8%
200861.7 million hectares*
Total contracted and reserved area 38%
2011102.0 million hectares*
Total contracted and reserved area 63%
* Area includes: production, exploration, TEA´s and in preparationSource: ANH
Colombia 2011 (Sep):
• 25.2 million hectares under exploration
• Exploration activity on 294 blocks
• 100+ companies in E&P
6
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7
Exploration wells and success rates in Colombia
Increasing E&P activity in Colombia
7Source: ANH
No
. of
we
lls
Tech
. Su
cce
ssR
ate
6 2 4 6 10 16 22 2947
36
63
3512 12 6
22 1119
3441
51
28
45
38
33%
14%
40%
21%
48%
46%
39%41%
48%
56% 58%
48%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
0
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Producer Dry Tech Success Rate
18 14 10
28 2135
5670 64
98 108
73
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Colombia´s O&G sector supports economic growth
Foreign direct investment O&G(USD bn)
0%
10%
20%
30%
40%
50%
60%
0
5
10
15
20
25
30
2005 2006 2007 2008 2009 2010 Jan-Nov 2011
Exports of petroleum and its products
% of total country´s exports
Oil and products exports(USD bn)
0,5
1,1
2,0
3,3 3,4
2,4 2,8
4,3
-
1,0
2,0
3,0
4,0
5,0
6,0
2004 2005 2006 2007 2008 2009 2010 Jan-Sep 2011
16% 11% 30% 37% 32% 34% 42%
% of total FDI
Source: Central Bank of Colombia 8
P: preliminary
40%
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Ecopetrol´s performance and 2012-2020 strategic plan:
Overview
9
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Ownership 100% Governmentowned
•12% market float
•Listed in BVC, NYSE and TSX
•Dow Jones Sustainability Index
BusinessModel
NOC business model
withoperations in Colombia
• Diversified Corporate Group across all segments
• Internationalization: Colombia, Peru, Brazil , and US
Gulf Coast
Production • 724 mboed in 2011399 mboed in 2007
Market Cap USD 27 bn (Nov. 27/ 07) • USD 115 bn (Feb 27/12)
Ecopetrol´s transformation 2007 - 2011
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11
Capex per year 2008-2012
Capex growth accross all segments with focus on E&P
Capex per segment2008-2011
US$ 25.7 bn
Production
Acquisitions
Transportation
Refining & Petroch.
Exploration
Other
1.8
4.8
6.3 6.07.2
8.5
2007 2008 2009 2010 2011 2012 (e)
* e: estimated
(USD billion)
Source: Ecopetrol
43%
16%
14%
11%
10%5%
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Ecopetrol beyond Colombia
E&P:
E&P:
E&P:
E&P:
Refining & Petrochems. :
Biofuels:
Transportation:
Ecopetrol Corporate Group
12Source: Ecopetrol
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Production 60%
Exploration 25%
Refining 7%
Transportation 5%
Other 2% Biofuels
1%
Strategic plan 2012 - 2020
1.3 million boed
13Source: Ecopetrol
US$ 80 bn
Capex 2012 - 2020 Goal year 2020
• No accidents• No environmental
incidents• Harmonious labor
relations• Delivering commitments
to stakeholders• 17% ROCE
“Clean barrels”
• 85% allocated to E&P• 90% in Colombia
1.3 mm boed
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Ecopetrol´s performance and 2012-2020 strategic plan:
Exploration & Production
14
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Corporate Group: Average production / year(thousand barrels of crude oil and gas per day)
15Source: Ecopetrol
Remarkable rise in production
Strategic partnerships adds 51% of total production
81 109 153224
280
246253
270
289
336
7285
97
104
108
2007 2008 2009 2010 2011
Heavy oil Light and medium oil Natural gas
399
521
616
724
447
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Region Share Main fields
2011
Avg. Production
(mboed)
Central 42% Castilla 110
Chichimene 32
Rubiales + Quifa 113
Northeast 29% Guajira 64
Cusiana 36
Mid Magdalena 12% La Cira 17
Infantas 3
Nare 16
Catatumbo 8% Tibú 2
South 9% Orito 3
Tenay 2
Tello 3
Main fields by region in Colombia
16Source: Ecopetrol
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1P Reserves*(million barrels of oil & gas equivalent)
* According to SEC prices and methodology** RRI: Reserve replacement index
1.473
5,836
2008 - 2011 2012 - 2020 ( e )
Reserves Addition(million barrels of oil & gas)
Corporate Group 1P Reserves: 2008 - 2020 (e)
17Source: Ecopetrol
1,137
1,538 1,714
1,857
2008 2009 2010 2011
46%
351%
193%
IRR **
164%
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2011 (e) Current fields Expl. National Unconventional Expl. International
2015International Exploration
18
Sources of production growth 2011 - 2015
724
1,000
123106 27 20
(e) : estimated
Incremental production by source: 2011-2015(thousands of equivalent barrels of oil per day)
Source: Ecopetrol
2015 ( e )ColombianExploration
Unconventionalin Colombia
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19
Breakdown of production 2020
Production by source: 2020(thousands of equivalent barrels of oil per day)
Source: Ecopetrol
840
1,300
300110
50
Current fields Expl. Colombia International Expl. Unconventional Total 2020International Exploration
ColombianExploration
Unconventionalin Colombia
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Drilling27%
WO & stimulation
1%
Optimization & new
projects5%
Secondary15%
Polymers & CO25%
Steam1%
In situ combustion
34%
Gas12%
• Potential for EOR/IOR:17% of Ecopetrol´s OOIP is subject to be recovered through EOR/IOR projects.
• Screening process:94% of OOIP had gone through a screening process to select the best technology applicable.
• Insitu combustion: By Dec. 2012 Ecopetrol might start a combustion in situ project at Chichimenefield.
• Waterflood:• 21 fields implemented• 21 fields new pilots/projects in
progress• 93 fields with possible
implementation
Breakdown by source
Secondary recovery and EOR
20Source: Ecopetrol
In field
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Gibraltar
Cupiagua
21
Additional gas capacity 2011-2012
36 mmcf
140 mmcf• Supply increases in demand
Allowing for:
FieldsCurrent
production(mmcf)
Futureproduction
(mmcf)
Prod. increase
Cusiana LTO II200 270 +70
Gibraltar 0 36 + 36
Cupiagua0 140 +140
Main projects:
Source: Ecopetrol
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International explorationwells
Colombianexploration wells
Successful wells
Stratigraphic wells
Geological Success * 16% 33% 26% 26%
Higher exploration activity and geological success
22
12 13 16 13
2837
23 6
11
5
10
22
2007 2008 2009 2010 2011* 2012 (e )
25 5 4
1
6
11
6
48%**
16
* Success rate for A3/A2 wells; ** Does not include 4 wells under evaluation (as of Dec 31/11) in the calculation of success rate (17/35= 48%)
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Ecopetrol´s Oil & Gas discoveries in Colombia 2008-2011Discoveries in Colombia 2008-2011*:
23* Includes only A3 and A2 wells. Source: Ecopetrol
Arrayan
Pacha-quiaroNorte
Tempranillo Norte
Quriyana
Tinkhana
Rumbero
Oripaya
Akacias
Nunda
Pinocho
Mito Fauno
Tempranillo-1
Lisama Norte 1P
Rio Zulia West 3
Quifa6
Quifa 7Quifa 8
Quifa9
Quifa 5CSE-8
CSE 8ST
TRASGO
2008 Arrayan-1
Lisama Norte
Pachaquiaro norte-1
Tempranillo-1
Quifa-5
2009 Quiriyana-1
Quifas 7,8,9
Tempranillo norte
2010 Akacias-1
Oripaya-1
Tinkhana-1
Quifa-6
2011 Pinocho
Rumbero
Nunda
Fauno-1
Mito-1
CSE-8
CSE 8ST1
Trasgo-1
Azabache-1
Opalo-1
Bonga-1
Guarrojo Este-1
Saman
Opalo-1
Azabache-1Guarrojo E-1
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hectares*Includes: Ecopetrol S.A., Hocol, and Equion
Assetsexploration
hectares
Colombia InternationalExploration Area
9
16.1
5.2
2002 2011Colombia
International
Million hectares
21.3
Growing and diversified exploration portfolio
Assetsexploration
24Source: Ecopetrol
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9%
71%
20%
• 41 E&P Contracts• 6 Agreements with ANH• 6 Association contracts• 53 exploration assets
53
blo
cks
Offshore Caribbean
Heavy oil
Foothills
Proven basins
Early production
Geologic frontier
13.4 million Ha
Leverage Sustainability Growth
Exploration Area Blocks in Colombia
Exploration assets in Colombia
Venezuela
AtlanticOcean
Pacific Ocean
Ecuador
Peru
Brazil
25Source: Ecopetrol
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Santos
Campos
Espiritu Santo
Para Maranhao
Marañón
Ucayali
Ecopetrol Peru
4.8 mm Has
GOM
Marañón
Ucayali
Huallaga
Ecopetrol Brasil
0.1 mm Has
Campos
Santos
Para-Maranhao
Ecopetrol America Inc.
0.3 mm Has
Miocene
Paleogene
JurassicExploration Area
9.6 mm Has
Peru marañón
Brazil post-salt pre-salt
Sustainability
GoM Miocene
Peru offshore
Sechura
Salaverry
Lima
* Ecopetrol’s interest of 50% of the 8,664,213 Has of Savia Peru
Savia Peru
4.3 mm Has*
International exploration assets
26Source: Ecopetrol
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27
120 - 1200 TCF (Karson, 1994)
32 TCF (Arthur D little, 2010)CBM - GUAJIRA
CBM - CESAR
CBM - MONTERIA
CBM - CORDILLERA
MH - CARIBE
MH - PACIFICO
SH - CATATUMBO
SH - VMM
SH- CORDILLERA
Methane hydratesGas in Situ 434.2 TCF
Shales31.7 TCF (Higher potentialin VMM 29 TCF)
Coal Bed Methane7.5 TCF (Higher potentialin Cesar 2.4 TCF and Guajira 3.4 TCF)
Tight Sands1.2 TCF
Tar SandsPotential 23,762 MMBOE
SH - VSM
SH - PUT
Source: Arthur D´Little INC
Unconventional resource potential in Colombia
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SH - CATATUMBO
Shale
Mid Magdalena Valley
SH- CORDILLERA
SH - VSM
SH - PUT
Focus area to startUnconv. strategy
Drivers
Regional geological knowledge
Land positioning
Access to infrastructure and social - environmental knowledge
Access to potential markets for gas and liquids to be produced
High potential
Gas shale in Middle Magdalena Valley: Initial steps for Ecopetrol
28Source: Arthur D´Little INC,Ecopetrol
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Ecopetrol´s performance and 2011-2020 strategic plan:
Downstream
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327 331 348 363 363
148 216302 356
494475547 650
719857
2007 2008 2009 2010 2011
Local sales
Exports
95 149233
312414
5351
4937
55
16
20
25
148216
302356
494
2007 2008 2009 2010 2011
7
Crude oil
Products
Natural gas
Exports
Total Sales
Tho
usa
nd
bar
rels
per
day
of
cru
de
oil
& g
as
Sustained growth in revenues driven by exports
30
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U.S. Gulf Coast
Far EastCaribbean and other
South America
U.S. West Coast
Canada
Crude references and export destinations
Destinations
Crude References
31
85%
58%
12%
16% 24%
3%
2%
2010
2011
WTI Maya Brent Otros
Africa
Europe
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Ecopetrol´s performance and 2011-2020 strategic plan:
Refining
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Strong commitment to air quality
4,500
3,0002,500
5005050
1,200500 500
2001 2008 2009 2010 2012
Colombia
Bogota and PublicTransportationSystems
Medellín
Diesel
2007
Gasoline 1,000727 700
231
2008 2009 2010 2011
Sulfur content (parts per million)
Source: Ecopetrol
33
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Cartagena
Estimated
Reficar
Billion +/- 10%Investment
165MBDCapacity of
BarrancabermejaModernization
250MBDCapacity of
Billion +/- 11%Investment
Estimated
Main refining projects
34
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Lower cost of crude
2010 2013
61%
93%
23%
7%16%
Heavy Medium Light
Premium quality products
2010 2013
28% 4%
36%
51%
36% 45%
Fuel & Coke
Med. distill.
Gasolines & LPG's
Conversion <75% >95%
Cartagena - expansion and upgrading
35
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Lower cost of crude
2010 2016
21%
69%
55%
21%
24%10%
Heavy Medium Light
Value added products
2010 2016
18% 4%
41%46%
34% 41%
7% 8%
1% 1%
Fuel &Coke Medium dist.Gasolines LPG´sPetrochem.
Conversion <75% >95%
Barrancabermeja modernization
36
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2012 2013 2014 2015 2016 2020
Reficar Ebitda Barranca Ebitda
Projected margin improvement from investment projects
Utilities ProjectBarranca
modernization project
Reficar Project
Process heavier crudes and produce higher
quality fuels
Optimize operating costs
Process heavier crudes and produce more
value added products
37
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Ecopetrol´s performance and 2011-2020 strategic plan:
Biofuels
38
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Biodiesel
Ethanol
• Total Capex US$282 millions • Start of operations: 2012• Max. Capacity: 480,000 liters/day • Future blending of 10% through wholesalers• Ecopetrol ´s interest : 88%
• Max. Capacity : 100,000 tons/yr (2,000 bls/day)• Production Jan-Sep 2011: 2,140 MBOED• Blending of 2% biodiesel at Barranca refinery • Ecopetrol´s interest: 50%
Growth through current and new projects
Subject to further approvals
39
100
180
280
380450
2011
Ecodiesel
2013
Bioenergy
2016
Ecodiesel 2
2018
Etanol
2020
Bioenergy 2
Production of Biofuels(thousand tons per year )
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Ecopetrol´s performance and 2011-2020 strategic plan:
Transportation and Logistics
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Transported volumes(mbod)
517 542 576771
916
194 209 223
265
289
710 752 800
1,036
1,205
2007 2008 2009 2010 2011
Crude oil Products
Crude transportation capacity(mbod)
Capacity increase
872 887 910 9911.105
2007 2008 2009 2010 2011
70%
2007-2011
27%
2007-2011
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Open business model for developing infrastructure
B/Bermeja
Ayacucho
Cartagena
Orú
Coveñas
Vasconia
Cusiana
Porvenir
ChichimeneApiay
Caño LimónSamoré
Toledo
Río Zulia
Tibú
Caucasia
Araguaney
Monterrey
Payoa
Banadia
Velásquez
Miraflores
Santiago
Castilla
Tumaco
Alisales
Guamues
OritoMansoya
San Miguel
Churuyaco
Dorada
ToldadoGualanday
Tenay
Tello
Guandó
Purificación
Yaguara
Saldaña
Guaduas
Rubiales
Santa Rosa
Santa Sofía
Tocancipá
El Morro
Sebastopol
Retiro
Chicoral
ECOPETROL 100%
ECOPETROL + PARTNERS
THIRD PARTIES
PIPELINES FOR NAFTA
• 2010: 771 MBOD• 2011: 916 MBOD
Transported crude volume daily average:
SystemEcopetrol
100%Ecopetrol
and partnersThird
partiesTotal
Country
Crude Pipelines (Kms) 2,886 2,203 386 5,475
Stations 24 - 15 39
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1. ODL Rubiales – Monterrey (+ 180 MBOD) Dec. 11
2. Pozos Colorados – Galán (+ 60 MBOD) Jun. 12
3. Caño Limón – Coveñas optimization to 220 MBOD (+60MBOD) Jun. 12
4. Orito – Tumaco (+ 40 MBOD) Apr. 12
5. OBC Phase 1: Pipeline Casanare – Coveñas (+ 120 MBOD) Jun. 12
6. Magdalena Medio (+25MBOD) Jul. 12
7. Diluent Pipeline 90 MBOD (+ 37 MBOD) Jul. 12
8. ODC Vasconia – Coveñas (+ 35 MBOD) Dic. 11ODC Vasconia – Coveñas (+ 30 MBOD) Nov. 12
9. San Fernando – Monterrey – Cusiana (+ 390 MBOD) May. 14
10. Vasconia – GRB – Galán 220 MBOD (+ 60 MBOD) Jul. 13
11. Coveñas – Additional Storage (OBC – Ecopetrol ) (+ 1.800 KB) Feb. 13
Cartagena
Coveñas
Vasconia
Banadia
Santiago
Rubiales
Araguaney
Pozos Colorados
8Caño
Limón
Orito
6
1
3
4
9
5
Transportation projects 2011-2013
Increased Capacity:Secondary Lines
570 MBOD310 MBOD
Main Lines
Projects 2011-2013 (Capex USD 3.8 bn):
2
11
7
Storage
1,800 MB37 MBOD
Multipurpose lines
43
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Increase in capacity of pipeline systems(mbod)
2011 2013
• Ocensa (Seg. III): from 340 to 400 mbod• ODC: from 180 to 240 mbod• Bicentenario: phase 1: 140, Phase 2: 240, Phase 3: 450 mbod• Magdalena Medio: from 52 to 100 and then to 140 mbod• Caño Limón: from 110 to 220 mbod•OTA: From 45 to 85 mbod
2015 – 2020
• Pipeline to Pacific Ocean: 0 to 450 mbod
44Source: Ecopetrol
Key
Projects
Pipeline capacity increase 2010-2016
1.1681.288
1.446
1.747 1.765 1.765 1.765 1.765 1.765
2012 2013 2014 2015 2016 2017 2018 2019 2020
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Ecopetrol´ssolid financial results lever future growth
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3.5 4.5 6.4 4.88.6
15,1
44% 47% 45%38%
45% 50%
2006 2007 2008 2009 2010 2011
Ebitda Ebitda Margin
Source Ecopetrol S.A.,
Does not include subsidiaries
Ebitda & Ebitda Margin(USD bn)
1,5 2,25,0
2,44,3
8,418%
23%
36%
19%23%
27%
2006 2007 2008 2009 2010 2011
Net income Net margin
Net Income and Net Margin (USD bn)
46
Financial results driven by rising production, higher prices and cost saving initiatives (2/2)
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ROCE 2008-2011 is above the 17% hurdle rate
32,9% 33,7%
42,1%
36,2%
2009 2010 2011 2009-2011
ROCE= After tax operational income / Average Capex
ROCE 2009 - 2011
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75%
16%
9%
Sources
Cash generation
Debt
Equity offering
Capex plan of US$80 billion between 2012-2020
60%
25%
7%5%
2%1%
Uses
Production ExplorationRefining TransportationOther Biofuels
USD 80bn
USD 80bn
48Source Ecopetrol
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48%
17%
7%
24%
4%
Production ExplorationRefining TransportationOther
Capex plan of USD8.5 billion for 2012
Breakdown of Capex 2012
USD 8.5bn
49Source Ecopetrol
Exploration
Refinning
Transport
Other
• 42 exploratory wells• 37 in Colombia• 5 International
• Average Production• Corporate group: 800 mboed• Ecopetrol: 750 mboed
• Focus in the Llanos basin
Production
• Modernization of B/bermeja and Cartagena facilities
• Increase crude transportationcapacity by 600 mbod
• Research and development + organizational consolidation
Capex per segment 2012
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Diversified shareholder base
20.0%
1.6%*
10.1%
8.3%
Total Authorized Law 1118
Round 1 (2007) Round 2 (2011) Round 3 (TBD)
USD 2.8 bn
US$1.3 bn*
*Includes 2nd round of primary share offering; ** Mainly pension funds
Primary Equity Offerings of Ecopetrol
50Source Ecopetrol
Foreign inv. in ord.
shares 0.4%
ADRs1.4%
Other Instit.1.4%
Instit. Inv.**
(Colombia)4.1%
Retail inv. 4.2%
Rep. Of Colombia,
88.5%
Ecopetrol´s ownership(as of December 31-2011*)
507 thousand stockholders
Proceeds (USD bn)
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Increased trading and liquidity of ADRs
0,9 1,1 6,3 14,3
24,2
11,6
15,5
15,0
2008 2009 2010 2011
Total daily traded volume (USD million)
Ordinary Shares
ADRs
14
58 92
161
2008 2009 2010 2011
Number of institutional investors in ADRs
0,1% 0,2%
0,6%
1,4%
2008 2009 2010 2011
% of ADRs in Ecopetrol´s ownership
25.1
12.7
21.8
29.3Trading
% ADRs
Institutional
Investors in ADR
51Source: JP Morgan, Bloomberg
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$ 115 $ 115 $ 91$ 145
$ 263$ 105
$ 37
2008 2009 2010 2011 2012*
89.9%
Payout ratio
Extraordinarydividend
Ordinarydividend
76.5% 70.1% 70.3%
Dividend per share (COP) and payout ratio
Dividend payout ratio of ~ 70%
52
5.0% 9.2% 2.9% 3.7%
Dividendyield
79.9%
6.1%
*Pending shareholder meeting approval
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Investor Relations
• Phone + 571 234 5190
• Email [email protected]
• Website www.ecopetrol.com.co
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Sep
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Ecopetrol S.A. All rights reserved. The re production of this presentation is forbidden without the written authorization of Ecopetrol S.A.
ENERGY FOR THE FUTURE
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