First Steps Taken Towards the Construction of the 'Oleoducto Bicentenario de Colombia'

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Aug 18, 2010, 06:45 ET

BOGOTA, Colombia, Aug. 18 /PRNewswire-FirstCall/ -- Ecopetrol S.A. (NYSE: EC; BVC: ECOPETROL; BVL: EC; TSX: ECP) ("Ecopetrol" or the "Company") announced today the incorporation of a new special purpose company to construct and operate a private pipeline which will run from the Casanare Department to the port of Covenas. The new pipeline will facilitate oil exports from the Llanos region, considered one of the most prospective in Colombia.

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The new company will be named "Oleoducto Bicentenario de Colombia S.A.S." Initially, Ecopetrol Pipelines International Limited will be its sole shareholder. However, following incorporation it will be capitalized by other oil producers interested in participating in the project. The authorized capital of the company will be COL $3,120,000,000,000 and the subscribed capital at incorporation will be COL$10,000,000.

Investment costs for phase 1 of the project (Araguaney to Banadia) and new infrastructure upgrades at the port of Covenas are estimated to be U.S.$1,031 million. The total cost of the project, including phase 2 (Banadia to Ayacucho) and phase 3 (Ayacucho to Covenas), is estimated to be to U.S.$4,200 million.

The incorporation of this new company is an important step towards achieving one of the most significant milestones in facilitating the transportation of exports resulting from the increasing production in the Llanos basin of Colombia.

Ecopetrol is Colombia's largest integrated oil company and is among the top 40 oil companies in the world and the four largest oil companies in Latin America. Besides Colombia, where it accounts for 60% of total production, the Company is involved in exploration and production activities in Brazil, Peru and the United States (Gulf of Mexico). Ecopetrol has the principal refinery in Colombia, most of the network of oil and multiple purpose pipelines in the country, and it is considerably increasing its participation in biofuels.

This release contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Ecopetrol. These are merely projections and, as such, are based exclusively on the expectations of management concerning the future of the business and its continued access to capital to fund the Company's business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Colombian economy and the industry, among other factors; therefore, they are subject to change without prior notice.

Contact us for any additional information:

Investor Relations
Alejandro Giraldo
Phone: +571-234-5190
Email: [email protected]

Media Relations (Colombia)
Mauricio Tellez
Phone: + 571-2345377
Fax: +571-2344480
Email: [email protected]