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Www.ecopetrol.com.co La energía de los colombianos Para uso restringido en Ecopetrol S.A. Todos los derechos reservados. Ninguna parte de esta presentación.

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Presentation on theme: "Www.ecopetrol.com.co La energía de los colombianos Para uso restringido en Ecopetrol S.A. Todos los derechos reservados. Ninguna parte de esta presentación."— Presentation transcript:

1 www.ecopetrol.com.co La energía de los colombianos Para uso restringido en Ecopetrol S.A. Todos los derechos reservados. Ninguna parte de esta presentación puede ser reproducida o utilizada en ninguna forma o por ningún medio sin permiso explícito de Ecopetrol S.A. INVESTMENT CLIMATE IN COLOMBIA Isaac Yanovich F. President ECOPETROL S.A. Cartagena, Mayo 20, 2005

2 www.ecopetrol.com.co La energía de los colombianos Para uso restringido en Ecopetrol S.A. Todos los derechos reservados. Ninguna parte de esta presentación puede ser reproducida o utilizada en ninguna forma o por ningún medio sin permiso explícito de Ecopetrol S.A. Investment Climate in Colombia Partnership Opportunities with Ecopetrol Why Partner with Ecopetrol S.A. AGENDA

3 La energía de los colombianos 3 Key Measures – Government Level Creation of National Hydrocarbon Agency (ANH) Enhanced fiscal terms for E&P contracts Improved physical security Increased exploration budget for Ecopetrol and ANH INVESTMENT CLIMATE Colombia has adopted bold measures to enhance investment climate Key Measures – Ecopetrol S.A. Leadership role of promoting new projects and ventures in Exploration and Production

4 La energía de los colombianos 4 INVESTMENT CLIMATE Incumbent players strengthening their position Occidental Petroleum, ChevronTexaco, BP, Total, Petrobras, Perenco New players entering the market ExxonMobil return after 10 years, BHP Billiton, Repsol, Burlington Resources, Lukoil Overall, E&P investment has increased significantly We have seen a strong industry response

5 La energía de los colombianos 5 ECOPETROL INVESTMENT PROGRAM Ecopetrol is spending the highest E&P budget in recent years Exploration Budget (US$MM) Production Budget (US$MM)

6 www.ecopetrol.com.co La energía de los colombianos Para uso restringido en Ecopetrol S.A. Todos los derechos reservados. Ninguna parte de esta presentación puede ser reproducida o utilizada en ninguna forma o por ningún medio sin permiso explícito de Ecopetrol S.A. Investment Climate in Colombia Partnership Opportunities with Ecopetrol Why Partner with Ecopetrol S.A. AGENDA

7 La energía de los colombianos 7 Priorities PARTNERSHIP OPPORTUNITIES - Lead industry into high impact exploration areas - Maximize output from existing fields - Develop heavy oils - Attract investment into small and medium size prospects - Expand internationally Ecopetrol Priorities in E&P Current partnership opportunities with ECP 1.Acquire licenses jointly for new areas from ANH 2.Develop mature fields (e.g. Tibú Project) 3.Develop heavy oil potential (e.g. Castilla Project) 4.Joint ventures with Ecopetrol to operate in other Latin American countries 5.Invest in the Private equity Exploration Fund Ecopetrol priority in E&P is to halt declining production

8 La energía de los colombianos 8 1. New Areas offered by ANH Potential General Description Colombia is vastly unexplored ANH has wide acreage available for licensing Fiscal terms of new contract are very attractive. Ecopetrol is willing to invest in exploration and diversify risk through partnerships Requirements Diverse project sizes Technical studies $20 to $30 US$ million in Piedemonte areas $5 to $15 US$ million in other areas PARTNERSHIP OPPORTUNITIES

9 La energía de los colombianos 9 Potential General Description Existing Tibú field with current production: 2,000 bopd, 30 - 50 °API Low Recovery Factor: 27% Low efficiency water flood system (Tertiary formations). Opportunity Tertiary Infill Drilling Redesign of Waterflood Pattern Cretaceous Horizontal or highly deviated drilling (Cretaceous). 90 – 255 mmbls proven Undeveloped Reserves. Incremental production: 8 - 33 kbopd Required investment: 150 - 300 $USMM Timetable Prequalification round in progress Deadline for prequalification documents June 30, 2005 PARTNERSHIP OPPORTUNITIES 2. Develop mature fields – Tibu Project ECOPETROL invites all of you to a special presentation about Tibu Project tomorrow at 11:30 (Pegasso Room)

10 La energía de los colombianos 10 GENERAL DESCRIPTIONOPPORTUNITY PRODUCTION - Existing Castilla field with current production of 47,000 BOPD, 13 °API. - To reach 60,000 BOPD in In September 2005 - Existing Chichimene field, San Fernando Formation, current production of 400 BOPD, 9 °API 640 - 1010 MMBLS Proved and Unproved Reserves. Incremental production: 60.000 BOPD EXPLORATION - Cristales and Arama Prospect to be drilled in 3Q and 4Q 2005. - Caño Sur Block. Reprocessing Seismic in 2005 in 1.6 MM Hectareas. 120 - 200 MMBLS Heavy Oil. ACTIVITIES REQUIRED: Drill development and exploratory wells 2D and 3D seismic programs Pipe Line and Facilities Investment Upgrading Plant INVESTMENT REQUIRED > US$ 700 MM TIMETABLE: Ecopetrol will open public process in June 15, 2005 PARTNERSHIP OPPORTUNITIES 3. Develop heavy oils – Castilla Project

11 La energía de los colombianos 11 We are looking for investment opportunities with existing production and low and medium exploratory risk Focus: Target markets: Ecuador, Argentina, Brazil, Venezuela Target Size of net reserves: 50 - 70 MBLS. Target size of minimum production: 10.000 BOPD Preferably crude, not gas. Preferably producing basins, with exploratory upside 4. JV´s with Ecopetrol to operate in other Latin American countries PARTNERSHIP OPPORTUNITIES

12 La energía de los colombianos 12 5. Private equity exploration Fund Potential General Description Establish Colombias first Oil & Gas Private Equity Fund raising US$ 100 million Invest in often left-out oil & gas properties Enhance value by raising productivity and diversifying exploration and new incremental / secondary production projects Exit via trade sale within a 10-year time frame, 5-year investment period Fund manager with proven track record Requirements More than 30% net return to investors Royalties reduced to 8% for most small and medium size fields Colombia is unexplored; 38% of the potential reserves are in below 10 mmboe reservoirs Target funding: US$100 MM ECOPETROL will fund US$25MM Fund closing: 2Q 2005 PARTNERSHIP OPPORTUNITIES

13 www.ecopetrol.com.co La energía de los colombianos Para uso restringido en Ecopetrol S.A. Todos los derechos reservados. Ninguna parte de esta presentación puede ser reproducida o utilizada en ninguna forma o por ningún medio sin permiso explícito de Ecopetrol S.A. Investment Climate in Colombia Partnership Opportunities with Ecopetrol Why Partner with Ecopetrol S.A. AGENDA

14 La energía de los colombianos 14 ECOPETROL – LEADER IN COLOMBIA Strong Company Valuable assets E&P Knowledge and expertise in Colombia Extensive experience in managing partnerships with world class companies Why partner with Ecopetrol?

15 La energía de los colombianos 15 Strong Company Exports 3,8 3,9 4,0 20012002 2003 Local Sales 40 % 60% 44% 56%41% 59% Total Sales in US$ Billion 5,1 2004 41% 59% ECOPETROL – LEADER IN COLOMBIA Net Income in Millons US Dollars

16 La energía de los colombianos 16 EXPLORATION 19 Direct exploration blocks 6 Shared risk contracts (SRC) 3 E&P contracts signed with ANH 4 TEAs signed with ANH 34 Association Contracts under exploration PRODUCTION 48 direct production blocks 47 Association contracts under production INFRASTRUCTURE Two refineries Barrancabermeja:240.000 BPD Cartagena: 75.000 BPD About 210 production fields 8.592 kms of pipelines Main port on the Caribbean Sea (Coveñas) Second port on the Pacific coast (Tumaco) Valuable assets ECOPETROL – LEADER IN COLOMBIA

17 La energía de los colombianos 17 Geological Knowledge Local operational expertise: More than 200 production fields Competitive lifting costs Good Neighbor (Environment, Communities) ECOPETROL – LEADER IN COLOMBIA E&P Knowledge and expertise

18 La energía de los colombianos 18 Upstream ARGOSY BP BURLINGTON CEPSA CHEVRON- EMERALD EXXONMOBIL HOCOL LUKOIL NEXEN OMIMEX OXY PETROBRAS PETROLEUM PERENCO PETROSANTANDER PETROTESTING REPSOL-YPF TALISMAN ENERGY TEXACO TOTALFINAELF SAMPLE OF RECENT DEALS ExxonMobil/Petrobras/Ecopetrol to explore gas in Caribbean Offshore ChevronTexaco/Ecopetrol to expand production in existing gas fields OXY/Ecopetrol to invest in enhanced oil recovery in existing fields BP/Total/Ecopetrol to build gas processing plant (200 million cubic ft). Experience in managing partnerships with world–class players ECOPETROL – LEADER IN COLOMBIA

19 La energía de los colombianos 19 Final Remarks Security and overall business environment in Colombia has improved A wide range of opportunities exist in Colombia Upstream frontier areas, heavy oils, mature fields, marginal fields. ECOPETROL S.A. is an ideal partner to operate in Colombia ECOPETROL S.A. Final Remarks

20 La energía de los colombianos 20 THANK YOU Contact info: Isaac Yanovich F. President Ecopetrol S.A. yanos@ecopetrol.com.co Ph: (571) 2344112 Bogotá, Colombia www.ecopetrol.com.co

21 La energía de los colombianos 21 Enhanced fiscal terms for E&P terms Improved security Active role of Ecopetrol leading E&P activities and new ventures DRIVERS Arrival of new companies into the country and return of others Better security Increased E&P activities Wells Seismic Rigs RESULTS The investment environment in Colombia is improving INVESTMENT CLIMATE

22 La energía de los colombianos 22 CARTAGENA REFINERY EXPANSION General Description Cartagena Refinery expansion to: -Double capacity to 140 KBPD -Enhance conversion factor -Comply with environmental regulations -Position Cartagena as a key oil and petrochemical center in the Caribbean Ecopetrol is interested in attracting private investment to the refinery Potential Oil and petrochemical players Equipment suppliers Industrial Service suppliers Financial institutions and export credit agencies Timetable Construction 2006 - 2009 Road show Mid 2005 Equity participation in strategic refining location in the Caribbean Estimated budget: US$800 Million Target Players PARTNERSHIP OPPORTUNITIES

23 La energía de los colombianos 23 Potential General Description Existing Tibú field with current production: 2,000 bopd, 30 - 50 °API Low Recovery Factor: 27% Low efficiency water flood system (Tertiary formations). Opportunity Yacimientos Terciarios Perforación adicional Rediseño del patron de inyección de agua Yacimientos Cretacicos Perforación horizontal o de alta desviación 90 – 255 mmbls proven Undeveloped Reserves. Incremental production: 8 - 33 kbopd Required investment: 150 - 300 $USMM Timetable Prequalification round in progress Deadline for prequalification documents June 30, 2005 PARTNERSHIP OPPORTUNITIES 2. Develop mature fields – Tibu Project ECOPETROL invites all of you to a special presentation about Tibu Project tomorrow at 11:30 (Pegasso Room)


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