The Board of Directors of Ecopetrol S.A. have given their approval to a new corporate strategy targeted at assuring the company's long-term sustainability, in which value generation based on efficient bbls and shareholder return take on the greatest significance.
The new approach details how Ecopetrol will be focused on oil and gas exploration and production, while seeking operational excellence in transportation, refining and the petrochemical areas. The strategy also pursues the achievement of structural efficiencies, to allow the group to increase its competitive levels in order to reach the best international standards.
In exploration, the Ecopetrol Group will build its portfolio, focused on high potential basins in Colombia and abroad, which is designed to significantly increase the group’s contingent resources and reserves. In addition, the exploratory team based in Houston and Bogota will be strengthened by the addition of world-class human talent with proven track record.
In production, Ecopetrol will be focused on efficient bbls production, in major profitable fields, while carrying out a comprehensive program to increase the recovery factor. It will seek to increase average annual production between 1% and 2%, reaching a total of approximately 870 thousand bbls of oil equivalent per day by 2020, with an EBITDA target of more than US$30/bbl in a price scenario for Brent crude of between US$70 and US$80/bbl.
As for the company's reserves, the objective is to increase proved reserves by 1700 million bbls of oil equivalent by 2020.
In the transportation segment, the company will dedicate its efforts to increase efficiency in order to achieve international operating standards. The plan includes Cenit´s consolidation, the affiliate that will ensure the transportation of national crude, with a special focus on heavy crudes, as well as transportation of refined products for the Colombian market.
In refining and petrochemical, the strategy contemplates the start-up of the new Cartagena refinery during the last quarter of 2015, execution of an ambitious efficiency plan that will improve the competitiveness of existing assets and the promotion of the necessary regulatory conditions to ensure the business's profitability within a framework of financial self-sustainability.
Ecopetrol will focus on profitable investments, at an average estimated level of US$6000 million per year through 2020, oriented toward high value projects that contribute to the execution of the new strategy.
Adapted from press release by Joseph Green
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