Ecopetrol S.A. Extends its Strategic Plan Until 2020

BOGOTA, Colombia, July 14 /PRNewswire-FirstCall/ -- On July 9, 2010, the Board of Directors of Ecopetrol S.A. (NYSE: EC, BVC: ECOPETROL, BVL: EC) approved the 2011-2020 strategic plan for the companies comprising the Ecopetrol Corporate Group.

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The 2011-2020 strategic plan for the Ecopetrol Corporate Group was prepared from the perspective of new business targets, with a  focus on sustainable development and a clear market orientation, resulting in profit-linked value goals.

According to the strategic plan, the Ecopetrol Corporate Group will operate in accordance with the following strategic guidelines: Profitable Growth, Organizational Consolidation and Corporate Responsibility. For 2020, the Group has committed to obtaining results in the economic, social and environmental areas that will allow the Group to meet the expectations of not only Ecopetrol's shareholders but those of other interested parties as well.

The strategic plan calls for a production goal of 1.0 million barrels of clean crude equivalent per day by 2015, while also foreseeing increased efforts to reach 1.3 million barrels of clean crude equivalent per day by 2020. By "clean barrels", the Group means the production of crude without accidents or environmental incidents and in harmony with interested parties. Regarding human talent, the plan sets as one of its goals to continue developing the skills of employees.

To be able to meet the goals called for in the new 2011-2020 strategic plan, an estimated investment of US$80 billion will be needed. Of this amount, 79% will be allocated to exploration and production activities, with the remaining 21% destined to refining, transport, marketing and biofuel areas.

The investment in exploration and production will help the Group (i) increase its exploratory activity, including offshore blocks and new areas (frontier), (ii) continue its development of heavy crude, natural gas and unconventional hydrocarbons, and (iii) make better use of conventional field production.

The plan also focuses on developing transport projects to address the current increased hydrocarbon production, and according to official estimates is expected to continue rising in the upcoming years. In refining the goal is to complete the upgrades and expansions of the Group's refineries in Barrancabermeja and Cartagena.  Regarding the petrochemical sector, the plan focuses on developing current business lines and the analysis of new market opportunities, while in biofuels the goal is to reach a production of 450 thousand tons by 2015.

Projects included in the plan meet a required return on capital employed (ROCE) of 20% for upstream, 10%-12% for transportation, and 11% for refining.

The 2011-2020 strategic plan calls for Ecopetrol to keep strengthening and integrating the businesses in which it participates in a profitable, sustainable and responsible manner.

The 2011-2020 strategic plan also sets forth the following goal for the Ecopetrol Corporate Group: through its continued focus on petroleum, gas, petrochemicals and alternate fuels, the Ecopetrol Corporate Group aims to become one of the 30 leading companies in the oil industry by 2020, becoming known for its international positioning, innovation and commitment to sustainable development.

Ecopetrol is the largest company in Colombia, one of the world's 40 largest oil companies, and among the four largest in Latin America. Apart from Colombia -- where it is responsible for more than 60% of the nation's oil production -- it maintains exploration and production activities in Brazil, Peru, and the United States (Gulf of Mexico). Ecopetrol has the largest refinery in Colombia, most of that nation's oil and poli-product pipelines, and is significantly increasing biofuel activities.

This release contains statements related to business prospects, estimates of production and financial results, and statements associated with Ecopetrol's growth prospects. All of these are projections, and, as such, are based solely on the expectations of its directors about the future of the company and its continuous access to capital to finance the commercial plan. Materialization of such estimates in the future depends on market conditions, regulations, competition, and performance of the Colombian economy and the industry, among other factors, due to which they are subject to change without prior notice.

SOURCE Ecopetrol S.A.