Q4 2023 Ecopetrol SA Earnings Call
[music].
Unknown Executive: in Financial and Operational Results for the fourth quarter and year-end 2023. There will be a questions and answers session at the end of the presentation. Before we begin, it is important to mention that the comments in this call by Ecopetrol's senior management include projections of the company's future performance. These projections do not constitute any commitment as to future results, nor do they take into account risks or uncertainties that could materialize.
So for the fourth quarter and year end 2023.
There will be a question and answer session at the end of the presentation.
Before we begin it is important to mention that the comments in this call by Ecopetrol Senior management include projections of the company's future performance.
These projections do not constitute any commitment as to future results, nor do they take into account risks or uncertainties that could materially.
Unknown Executive: Asa Rizzo, Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call. The call will be led by Mr. Ricardo Roa, CEO of Ecopetrol, Alberto Consuegra, COO, David Reao, Vice President of Low Emission Solutions, and Milena Lopez, CFO. Thank you for your attention. Mr. Roa, you may begin your presentation.
As a result.
Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call.
The call will be led by Mr. Ricardo ROA C E O overcoat petrol I'll.
Alberto Consuegra that C O O that'd be the revenue vicepresident of low emission solutions.
Speaker Change: Lopez CFO.
Ricardo Roa Barragan: Thank you for your attention Mr. Robb you may begin your conference.
Speaker Change: Nobody wants.
Ricardo ROA: With regard to the 2022 Resolve Call, a year of significant achievements will provide goals and progress in the Energy Transition Project. We have achieved numerous operational records and value generation, overcoming a more challenging market environment. In 2023, we're trading the traditional hydrocarbon business across all its segments. We close the year with a production of 757,000 barrels of oil per day, a figure not seen in eight years, supported by our field in Colombia and the Permian subsidiary, contributing 9% to the total production. We transport 1,113,000 barrels of oil per day, with 306,000 barrels per day through pipelines, the highest in the group's history.
Ricardo ROA: Thanks drew constituting the 'twenty to 'twenty two.
Ricardo ROA: Hum.
Robb: Got you.
Robb: My goals.
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Robb: I can I'll moves corporation, a great coach.
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Robb: Three.
Speaker Change: I'm sorry.
Speaker Change: Our global business.
Speaker Change: 2022.
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Speaker Change: It's a bedroom business.
Speaker Change: Since we closed the year.
Speaker Change: 750000.
Dave.
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Speaker Change: So our recruiting in Colombia.
Speaker Change: C C D. It equaled <unk> 90 per cent to date on the touch on produce.
Speaker Change: Two 1 million of Honda.
Dave: Good day.
Speaker Change: <unk> seen some.
Speaker Change: Good day.
Speaker Change: Thanks.
In the group's history.
Ricardo ROA: In refining, we achieved an unprecedented financial performance with over 7.3 trillion pesos in EBITDA, the highest refining load in history of 420 barrels per day, thanks to high production and availability of continuous goods supply and operation of the Cartagena refinery plant interconnection IPCC. We achieved an exploratory success rate of 50% above the industry standard, highlighting milestones like Laucus 1 announced earlier and Orca North 1, which was 100% drilled by Ecopetrol in Philippine waters, which confirmed the presence of two gas accumulations in reservoirs different from the Orca 1 discovery. This expands our offshore gas potential, demonstrating our commitment to the country's energy security. On the commercial front, in October 2023, we announced the opening of the trading office in Houston to be closer to global markets and obtain better results in this ongoing effort to diversify customers and markets.
Speaker Change: Finally, we achieved.
Speaker Change: Integrated partners can put four months with Albertsons Safeway.
Speaker Change: Thanks, Susan.
Speaker Change: No no.
Speaker Change: Although a little different.
Speaker Change: But it is a good day too high but as for now.
Speaker Change: Continues and kudos to our lives.
Speaker Change: Okay got it.
Speaker Change: Finally planning for next year.
Speaker Change: We told.
Speaker Change: What are your sort of two 3% above the <unk>.
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Speaker Change: Or kind of an article one they really didn't do any other way.
Speaker Change: 100%.
Speaker Change: Bye bye.
Speaker Change: Bruce.
Two guys, who leaves us very different from the old one.
Speaker Change: One is clearly the leases.
Speaker Change: Gas potential around food.
Speaker Change: I went to the country's energy security in the commercial front.
Speaker Change: 23, we announced the opening of this recovery.
Speaker Change: Oh please.
Speaker Change: It will be closer to global markets.
Speaker Change: Hi.
Speaker Change: It has to be easily going to court to divert supply tumors markets, we call remotely.
Ricardo ROA: We currently sell more than 50% of our crude oil exports to Asian markets. In transmission, growth, and telecommunications, the segment is a secure context in 2023, representing an investment of 10 trillion pesos for the coming years. Let's move to the next slide.
Speaker Change: More than people think.
Speaker Change: Our crude oil.
Speaker Change: As Kevin Maher.
Speaker Change: In time region closed in telecommunications segment is to secure contracts in 2023, representing an investment of 10 trillion spaces for the coming year, let's move to the next slide we made significant progress in the commitment to decarbonization and to consolidate and edits on tissue.
David Reaño: We made significant progress in the commitment to decarbonization and consolidation of energy transition projects, achieving a cumulative reduction of greenhouse gas emissions of nearly 1.5 million tons of CO2 equivalent by the end of the year, aligning with the path to net zero emissions. Thousands of these emissions relate to methane, where Ecopetrol extended its mission to achieve the zero methane emission initiative of the oil and gas climate initiative. The commitment to action on climate change is evident, showcased by our adherence to the global sector agreement to accelerate the decarbonization of oil and gas during COP28 alongside 49 other oil companies. In 2023, we reused 152 million cubic meters of water, avoiding capturing and discharging this volume, representing 79% of the total water required for operations.
Speaker Change: Projects, achieving a cumulative reduction opening house gosh can be seen on corporate nearly 1.5 million tons of silk two equivalent by the end of the year. The lining we depart to net zero emissions.
Speaker Change: Oh, DCM ECM relate to maintain what it tended to be tuned to a cheap Seattle methane emission initiative pumping the oil and gas climate initiative commitment to action on climate change is evident showcased by our adherence to the global check two agreement.
Speaker Change: To accelerate the de carbonization of oil and gas building cop 28, alongside 49 or the only companies in 'twenty. Two 'twenty three we really use 152 million cubic meters, So, Florida, a bite in capturing and sharing these billion representing 79.
Speaker Change: Percent of the total water required for operations. He's achievement was recognized by CDP water security <unk>.
David Reaño: This achievement was recognized by CDP water security, giving us an A-minus leadership rating for our outstanding water management practices, making us one of the best companies in the oil and gas sector in these practices. In addition, in 2023, Ecopetrol was certified by ECONTECH in the calculation of its water footprint in NAICS production fields and the two refineries, being the only oil and gas company in Latin America that had reached this achievement. Ecopetrol Group reported an energy saving of 3.89 petajoules at the end of 2023, the highest figure since 2018, when measuring began, and 250% higher than that presented in 2022.
Speaker Change: We lose leadership rating for our.
Speaker Change: Standing water management practices, making us one of the best companies in the oil and gas sector. In these practices. In addition in 2023.
Speaker Change: What should I buy a context in the calculation of water footprint in nature for the division and at two refineries being the only oil and gas company in Latin America. The Cop reached these Ecopetrol Group report and then as you say being up 3.89 <unk> at the end of.
Speaker Change: 2023, the highest figures since 2018, when mature begun on 250% higher than that percentage in 2022.
David Reaño: Moreover, we added 472 megawatts of renewable energy to optimize our energy matrix and decarbonize our operations. In terms of sustainability, we invested 1.9 trillion pesos in the social dimension. We allocate 520 million to education, public services, and regional economic diversification, making a 17% increase from 2022. We promote the energy transition by expanding the coverage of social gas services through networks, benefiting more than 20,000 new homes in Colombia with physical connections. Regarding our human talent, it's noteworthy that we successfully negotiated the 2023-2026 collective labor convention with nine labor organizations. Also, we highlight our recognition in the 2023 medical ranking as the Colombian company with the greatest capacity to attract and retain talent. We also emphasize low accident levels with a total recordable injury frequency of 0.26 injuries per million hours worked.
Speaker Change: Moreover, we added.
Speaker Change: 472 megawatts of renewable energy to optimize our energy matrix and they've got going on at least our operations and some sustainability, we invest one nine trillion purchase and the social dimension.
Speaker Change: Eight $520 million to location service in radio in all economic diversification, making a 17% increase from 'twenty to 'twenty. Two we promote it and then you can see somebody responding the Cobra yourself. So you guys said was true.
Speaker Change: That would've been a PD.
Speaker Change: More than 20000, new homes in Colombia with physical connections.
Speaker Change: Guarding our human talent, it's noteworthy to know that we successfully negotiated the 'twenty to 'twenty three 'twenty between as he's collected neighborhood combined with nine labor organizations also we highlight our record meet soon in 2023 medical ranking the Colombian company.
Speaker Change: We did reach capacity to adapt.
Speaker Change: Columns, we also emphasize low oxygen levels with a total recordable injury frequency.
Speaker Change: <unk> gone 26 injuries per million hours worked.
Ricardo ROA: We rank among the top global oil and gas companies in this aspect, according to the International Association of Oil and Gas Producers data for 2023. Let's move to the next slide. We highlight the commitment to the country with a historical transfer to the nation in 2023, represented by 2023 billion pesos in dividends, 26 trillion pesos in taxes, and 10 trillion pesos in royalties. Additionally, in 2023, a co-petrol group allocated resources for the execution of the sustainable territorial development portfolio worth 594 billion pesos, which includes social, strategic, and mandatory environmental investment. Through these investments, the co-petrol group contributes to the economic and social development of the country, implementing projects with local authorities and the community alongside national partners and international cooperation to generate well-being and contribute to closing social gaps. Key social investment milestones of the co-petrol during the year include 150,203 students benefiting from projects and programs aimed at improving quality, increasing school retention, and expanding coverage in higher education. 8,670 entrepreneurs, SNS, and JET benefit from programs for capacity development in entrepreneurship and innovation.
Speaker Change: Ryan Campbell to the top high global oil and gas companies in this aspect. According to the International Association of oil and gas producers data for 2023, let's move to the next slide we highlight the commitment to the country with historical transferred to the nation in 2023 represented.
Speaker Change: In 2000, 23 billion pesos dividends 26 trillion pesos in taxes and tend to impact us in royalties. Additionally, in 2023 Ecopetrol group allocated resource.
Speaker Change: Christian of this sustainable territorial development portfolio work.
Speaker Change: <unk> hundred 90, Pone billion pesos, which includes socially strategical and mandatory environmental investments through these investments Ecopetrol group contributes to the economic and social development of the country implementing projects with local authorities and the community alongside nuts.
Speaker Change: Governments and international Corporation to generate well being and country lead <unk> seen soldier gaps key social investment milestones are controlled to ADP.
Speaker Change: Your include 103203, our students and benefited from projects and programs aimed at improving the quality increases or irritation and its funding Congress in higher education 8617, two printers.
Speaker Change: And you had benefits from programs per capacity development in and tripling or cheap and innovation.
Ricardo ROA: In 2019, people with improved access to clean water and 197.93 kilometers of ROPS network intervened, contributing to the dynamics of regions, weather, terrestrial mobility, and local job creation. I want to thank the firm commitment of all our workers, allies, and communities where we operate, who, with their dedication, make Co-petrol the leading force in transforming Colombia's energy. Let's move to the next slide. These results demonstrate that the roadmaps outlined in the strategy were affirmed in September 2023 during the celebration of Co-petrol's 15 years on the New York Stock Exchange. It's clear and guides us forward to the final purpose.
Speaker Change: 10019 people with improved access to clean water 197 point 93 kilometers of Iraq's network instead of being contributing to dynamic regions credit to this trail mobility on local job creation I want to say in the Permian.
Speaker Change: Commitment uphold our workers, our lives and communities, where we operate who with dedication make up with the leading towards interest more Columbia's pendants, let's move to the next slide.
Speaker Change: These results demonstrate that the roadmap outlined is to T D.
Speaker Change: In September 2023 during the celebration of our corporate towards 15 years of the New Jersey, Tox Ching is clear and guides, our stalwart to decline per pulse, so any twenty-three where payment is.
Ricardo ROA: In 2023, we obtained the second best result in the history of the co-petrol group, surpassing the previous year when the average brand price approached $100 per barrel. However, in 2023, crude oil prices dropped to $82 per barrel, combined with inflationary pressures and high energy costs, creating a very challenging environment for the company's cost structure. However, we exceptionally overcame this, generating revenues of $143.1 trillion, equivalent to 9% of the national GDP, and a big net of $60.7 trillion, a net profit of $19.1 trillion. The profit was imparted by a 10% income tax, such as an impairment that reduced the net income by $0.9 trillion for the period.
Coming back to results in the history of the little group surpassed the previous year when the aberration brand price approach $100 per burn in 'twenty two to keep crude price drop at 282.
Speaker Change: Per barrel combined with inflationary pressures on height and of course, creating a very challenging environment for the company cost structure.
Speaker Change: However, as sexuality overcame these generating revenues of 143.1 trillion pesos equivalent to 9% of their nationality.
Speaker Change: On the Big DOCSIS 3.7 trillion pesos on the net profit up 19.1 client base.
Speaker Change: While symbiotic by 10% in contact touches on.
Speaker Change: <unk> did that reduce the net income by <unk> two nine trillion pesos for the peds.
Alberto Consuegra: We closed the year with the highest record of transfers to the nation in co-petrol's history, $58 trillion. Also, I emphasize that we ended the year with an income receivable from the fuel price stabilization fund with an accumulation 44% lower than in 2022. Relieving cash pressures and highlighting the active management of the co-petrol teams, as well as the commitment of the nation, has allowed us to achieve the highest execution level of 97% of the investment plan, with the highest level in the last eight years, equivalent to $27 trillion. It is worth mentioning that as a result of these dynamics, as well as the market environment, Copetrol generated a total local return for its shareholders of 26% for the year and 46% for ADR investors, which adds to the confidence shown by the market in our issues and ratings.
Speaker Change: Closed the year with the highest right John.
Speaker Change: First to the nation in our corporate history.
Speaker Change: <unk> also I emphasized that we ended the year with an account receivable from the fuel price stabilization pond.
Speaker Change: In our communication protocol people per sand lowered the.
Speaker Change: 2022 and <unk>.
Speaker Change: Leaving cost pressures and highlight in the management of the corporate teams as well as the commitment of the nation is allow it as the highest execution the level of 97% investment plan with the highest level in the last eight years a cooling.
Speaker Change: 227, <unk> page it is worth mentioning that as a risk.
Speaker Change: All of these dynamics as well as the market environment Ecopetrol generated total local returns for its shareholders of 26% for the year, 40% for ADR and best stores, which adds to the confidence shown by the market in <unk>.
Speaker Change: Our issues and great teams.
Alberto Consuegra: With this excellent result, we prepare for a challenging 2024, not only in terms of international prices and inflation but also in terms of the impact of the linear phenomenon and the balance of the natural gas market. We will meet these challenges by strengthening our operating capacity in the traditional business with the highest safety standards, maintaining capital discipline, and with a clear focus on competitive returns. I will give the floor to Alberto Consuegra, who will talk in more detail about the 2023 operation performance. Go ahead, Alberto.
Speaker Change: This excellent result, we prepared for a challenging 2020 for not only in terms of international prices and inflation, but also the impact of the linear print them in and the balance of.
Speaker Change: They're not already got Americas, we will create these challenges by as trade it in our operating capacity in the traditional business with the highest safety standards, maintaining capital discipline and with a clear focus on competitive per tons.
conservative: I will give the floor to conservative who will talk in more detail about the train eternity operating apartments go ahead. Thank.
Alberto Consuegra: Thank you, Ricardo. By year-end 2023, the net proven reserves of the Ecopetrol Group will amount to 1,883 million barrels of oil equivalent, maintaining average levels of the last nine years, even under challenging market conditions. Proof-developed reserves increased by 4% versus 2022, showing an improvement in our CAPEX execution. Organically, 307 million barrels of oil equivalent were incorporated, but at the same time, 188 million barrels of oil equivalent were debooked, mainly impacted by external factors associated with a lower Brent price, inflationary effects, as well as a decline in water breakthrough in gas fields, such as Ballena, Cupiagu Going forward, the main future sources of reserve additions are concentrated in fields such as Castilla, Rubiales, Cao Sur, CPOO-9, Sire Infantas, Piedemonte, the development of Colombian Caribbean gas discoveries, and tertiary recovery in heavy oil fields. Contingent gas resources grew 79% as compared to 2022, from 1.9 to 3.4 teracubic feet, leveraged mainly Let's move on to the next slide, please.
conservative: Thank you Ricardo <unk>.
conservative: By year end 2023, the net proven reserves of the perpetual group amounted 1880 3 million barrels of oil equivalent maintaining average levels of the last nine years, even under challenging market conditions proved developed reserves increased by 4% versus 2022 showing in <unk>.
Speaker Change: Improvement in our Capex execution organically 307 million barrels of oil equivalent to where incorporated but at the same time 188 million barrels of liquid island, where do you booked mainly impacted by external factors associated with a lower Brent price inflationary effects.
Speaker Change: Well as decline in water breakthrough in gas fields, such as <unk> for a net incorporation of 119 million barrels of oil equivalent going forward. The main future sources of reserve additions are concentrated in fields, such as Kirsty yet reality Daniel.
Speaker Change: CPO nine ceiling fan to speed them on the development of Colombian Caribbean gas discoveries and tertiary recovery in heavy oil fields contingent gas resources grew 79% as compared to 2022 from one 9% to $3 four Tara cubic feet leverage may.
Speaker Change: There were two one gorgon offshore developments, let's move on to the next slide. Please in 2023, Ecopetrol and its partners drilled 23 exploratory wells in line with the plan three wells drilled in 2020 Toleware declared successfully in 2023 totaling 11 last year with an estimated potential beta.
Speaker Change: 100, and 150 million barrels of oil equivalent of resources of which 70% is gas regarding offshore exploration I would like to highlight the exploratory success of Gulf Coast. One in the coal fired block operated by shell, which confirmed the presence of a gas reservoir.
Alberto Consuegra: In 2023, Ecopetrol and its partners drilled 23 exploratory wells in line with the plan. Three wells drilled in 2022 were declared successful in 2023, totaling 11 last year, with an estimated potential between 100 and 150 million barrels of oil equivalent resources, of which 70% is gas. Regarding offshore exploration, I would like to highlight the exploratory success of Glaucus I in the Co-5 block operated by Shell, which confirmed the presence of a gas reservoir.
Speaker Change: All cannot that one well drilling in 2023 and completed in 2024 confirmed to gasser combinations in reservoirs different from the Orca one discovery triggering a reevaluation of the regional project, while expanding the gas potential awful lot Wahid sharp Orca one was.
Speaker Change: The first deepwater well operated 100% by Ecopetrol SA, which was completed without any operational incidents and with the highest industry standards.
Speaker Change: The appraisal campaign of the Joy of discovery located in the state on a block starting with a true up to well to be spud in the second quarter of 2024 on.
Alberto Consuegra: The Orca Norte I well drilled in 2023 and completed in 2024 confirmed two gas accumulations in reservoirs different from the Orca I discovery, triggering a reevaluation of the original project while expanding the gas potential of La Guajira offshore. Orca Norte I was the first deep water well operated 100% by Ecopetrol S.A., which was completed without any operational incidents and with the highest industry standards. The appraisal campaign of the Uchua discovery located in the Tairona block, starting with the Uchua 2 whale to be spotted in the second quarter of 2024. On the onshore front, I would highlight the following. Appraisal of the frontier between the Castilla and Chichimena fields in Block CPO-09 as a result of the Tinamu Magnus and Quimera 1 discoveries in partnership with Revsol, and the Arauca 8 well drilled in 2023, which was completed in 2024, confirmed the presence of live crude in a new reservoir, extending the potential of the Arauca field in the Janos Basin. Let's move on to the next slide, please.
Speaker Change: On the onshore front I want to highlight the following.
Speaker Change: Appraisal of the frontier between the Carty NTT manner fields in block CPO nine as a result of the Athena more Magnus and came in at one discoveries in partnership with Repsol.
Speaker Change: And then I've got eight wells drilled in 2023, which was completed in 2024 confirmed the presence of light crude in a new reservoir extending the potential opt out our garfield in their channels basing let's move on to the next slide please as Ricardo mentioned in 2023.
Capital Group reached a production of 737000 barrels of oil equivalent per day, increasing by 27000 barrels of oil equivalent per day, when compared to 2022 I would like to highlight the startup of the first fluid treatment train Afghan you saw failed bringing field.
Speaker Change: Production to 41000 barrels of oil in December 2023, as well as Permian incremental production and increased water management capacity in there will be Alex field, the aforementioned enabled and incremental production of 70000 barrels of oil equivalent per day, a 19% increase.
Speaker Change: <unk> 2022 by year end fields with secondary on enhanced recovery programs contributed nearly 41% of Ecopetrol group's daily production.
Alberto Consuegra: As Ricardo mentioned, in 2023, the Ecopetrol group reached the production of 737,000 barrels of oil equivalent per day, increasing by 27,000 barrels of oil equivalent per day when compared to 2022. I would like to highlight the startup of the first fluid treatment train at Canosur field, bringing its production to 41,000 barrels of oil in December 2023, as well as Permian's incremental production and increased water management capacity in The aforementioned enabled an incremental production of 70,000 barrels of oil equivalent per day, an 18% increase versus 2022. By year end, fields with secondary and enhanced recovery programs contributed nearly 41% of Ecopetrol's daily production.
Speaker Change: It is worth highlighting the greater execution capacity in the facility's front supported by the construction initiation of auto toys station at CPO nine and the commissioning of the fluid expansion of the San Paolo station at Canyon sewer and water management facilities that are really the growth in production was achieved in itself.
Stable manner by reducing 486000 tons of steel to equivalent 84% of the total emission reduction of the Ecopetrol group. These results were leveraged by energy efficiency initiatives elimination of venting and methane lakes reduction of flaring and incorporation.
Speaker Change: Renewable energy into the operation in 2024, we expect production between 725 and 730000 barrels of oil equivalent per day, driven mainly by drilling campaigns at reality can you soon in Permian the continuation of secondary recovery projects with water injection.
Speaker Change: In heavy oil fields, and the production coming from new gas projects in the mountain.
Speaker Change: This target volumes incorporate challenges that are being managed such as El Nino phenomenon security on social unrest situations.
Alberto Consuegra: It is worth highlighting the greater execution capacity in the facilities front, supported by the construction of Orotoy Station at CPO 09 and the commissioning of the fluid expansion of the Centaurus Station at Cao Sur and the water management facilities at Ruviales. The growth in production was achieved in a sustainable manner by reducing 486,000 tons of CO2 equivalent, 84% of the total emission reduction of the Ecopetrol Group. These results were leveraged by energy efficiency initiatives, elimination of venting and methane lakes, reduction of flaring, and incorporation of renewable energy into the operation. In 2024, we expect production between 725,000 and 730,000 barrels of oil equivalent per day, driven mainly by drilling campaigns at Ruviales, Cao Sur, and Permian, the continuation of secondary recovery projects with water injection in heavy oil fields, and production coming from new gas projects in These target volumes incorporate challenges that are being managed, such as the El Nio phenomenon, security and social unrest situations, and ongoing environmental permits. Let's go to the next slide, please.
Speaker Change: Knowing the environmental permits.
Speaker Change: Go to the next slide please.
Speaker Change: With regards to our activities in the Permian Basin of 120, New wells were drilled in 2023 for a total of 318 wells on production since 2019, reaching a production of 66400 barrels of oil equivalent per day for Ecopetrol before royalties, which represent.
Speaker Change: 9% of the group's production. We also highlight the strong financial results of Ecopetrol Permian by year end, we achieved an EBITDA of $799 million and an EBITDA margin of 88%. In addition, the following achievements of the Ecopetrol Oxy associate.
Speaker Change: Art noteworthy after four years They association achieved a record production of 163000 barrels of oil equivalent per day before royalties in early December of which 103000 barrels of oil equivalent per day belonged to ecopetrol record in drilling and completion of that well.
Speaker Change: With the longest lateral length of 18000 feet in line with our <unk> strategy, we highlight the progress in the carbonization of our Permian operation with a low emission intensity of seven to eight kilograms of cotwo barrel of oil equivalent Likewise the association is.
Speaker Change: Committed to the reduction of diesel consumption and managed to replace on average of 36% of the diesel used in drilling and completion operations by compressed natural gas CMG for 2020 for the association is expected to drill more than 110 wells and Ecopetrol expect an average.
Unknown Executive: With regard to our activities in the Permian Basin, 120 new wells were drilled in 2023 for a total of 318 wells on production since 2019, reaching a production of 66,400 barrels of oil equivalent per day for Ecopetrol before royalties, which represents 9% of the group's production. We also highlight the strong financial results of Ecopetrol Permian. By year end, we achieved an EBITDA of $799 million and an EBITDA margin of 88%. In addition, the following achievements of the Ecopetrol Oxy Association are noteworthy.
Speaker Change: Production between 80080 3000 barrels of oil equivalent per day before royalties next slide pace transported volumes increased by more than 42000 barrels per day in 2023, primarily due to an increase in crude oil transportation, thanks to higher production, particularly in the <unk>.
Got it.
Speaker Change: In 2023, we achieved significant milestones including.
Speaker Change: Our historical record in refined products. They are equation, while 306000 barrels per day never mainly by increased product availability at both refineries and operational optimizations in transportation systems.
Unknown Executive: After four years, the association achieved a record in production of 163,000 barrels of oil equivalent per day before royalties in early December, of which 103,000 barrels of oil equivalent per day belong to Ecopetrol, recording the drilling and completion of a well with the longest lateral length of 18,000 feet. In line with our TESG strategy, we highlight the progress in the decarbonization of our Permian operation with a low emission intensity of 7 to 8 kilograms of CO2 per barrel of oil equivalent. Likewise, the association is committed to the reduction of diesel consumption and has managed to replace an average of 36% of the diesel used in drilling and completion operations with compressed natural gas (CNG).
Speaker Change: In oil pipelines, we reached a record with dilution of Nogales crude at the Monterrey station.
Speaker Change: Total of a 163000 barrels of map that were received and around 858000 barrels of Ngls crude where they looked at achieving the quality of 21.4 degrees API crude.
Speaker Change: This leverages the midstream strategy to become an integrated logistics service provider.
Speaker Change: Ensure derma equation of oil from the casualty moorefield, thanks to the execution of 13 reversal cycles of that be centenary of pipeline.
Speaker Change: The segment maintained a carbon neutral operations certified by a contact since 2022 and achieved a reduction of over 15000 tons of Cotwo emissions. Lastly, we highlight the segment's financial results generating revenues of nearly 16 trillion pesos and then.
Unknown Executive: For 2024, the association is expected to drill more than 110 wells, and Ecopetrol expects an average production of between 80,000 and 83,000 barrels of oil equivalent per day before royalties. Next slide, please. Transported volumes increased by more than 42,000 barrels per day in 2023, primarily due to an increase in crude oil transportation, thanks to higher production, particularly in the Llanos region. In 2023, we achieved significant milestones, including a historical record in refined product evacuation of 306,000 barrels per day, mainly due to increased product availability at both refineries and operational optimizations in transportation systems. In oil pipelines, we reached a record with the dilution of Rubiales crude at the Monterrey station. A total of 163,000 barrels of naphtha were received, and around 858,000 barrels of Rubiales crude were diluted, achieving a quality of 21.2 degrees API crude. This leverages its midstream strategy to become an integrated logistics service provider.
Speaker Change: EBITDA of $11 eight trillion pesos contributing with 19% of their capital group's EBITDA with regards to regulation on December 20 of 2023, the minister of mines and energy issued resolution $47, 45, which regulated activity transportation by multi.
Speaker Change: Phase pipeline.
Speaker Change: This regulatory framework allows the midstream segment to continue emulator and projects that would increase transport levels and use of current infrastructure, let's move on to the next slide please.
In the downstream segment, we achieved outstanding financial and operational results with historical records and refining throughput and operational availability. Thanks to the rigorous execution of scheduled major maintenance activities operational efficiencies as well as a favorable pricing scenario.
Speaker Change: This resulted in an EBIT down seven three trillion pesos. The second highest in the segments history in <unk> 2023, the combined refining throughput reached 429000 barrels per day 84000 barrels per day higher than in the same period of previous year. The.
Speaker Change: <unk> refining gross margin was 13.1 dollars per barrel, mainly affected by weaker diesel jet and gasoline spreads in 2023, we accomplished multiple milestones of which we highlight this.
Unknown Executive: We ensure the evacuation of oil from the Canyon Limon field thanks to the execution of 13 reversal cycles of the Bicentennial Pipeline. The segment has maintained a carbon neutral operation certified by ECONTECH since 2022 and achieved a reduction of over 15,000 tons of CO2 emissions. Lastly, we highlight the segment's financial results, generating revenues of nearly 16 trillion pesos and an EBITDA of 11.8 trillion pesos, contributing 19% of the Ecopetrol Group's EBITDA. With regard to regulation, on December 20 of 2023, the Minister of Mines and Energy issued Resolution 4745, which regulated the activity of transportation by multi-phase pipeline. This regulatory framework allows the midstream segment to continue evaluating projects that would increase transport levels and use of current infrastructure. Let's move on to the next slide, please.
Speaker Change: Operational availability of refining plans by both 95% the highest in the last five years successful execution of the pyro lytic oil test from Postconsumer plastic waste at the ABA.
Speaker Change: Thank God refinery, enabling the production of around 19 tons of polypropylene in a center contributing to the Ecopetrol groups circular economy strategy, 95% progress in the construction of the mechanical recycling plant in ascent here, which is expected to start operations.
Speaker Change: During the first quarter of 2024 finally equally so received a contact carbon neutral certification, becoming the first BIOLASE a company in Colombia to receive this certification, let's move onto the next slide please.
Speaker Change: In 2023, the Ecopetrol group managed to incorporate efficiencies, while $4 five trillion pesos leveraging outstanding operational performance, partially mitigating inflationary pressures increases in energy costs, which combined with greater operating activity raised the cost structure.
Speaker Change: Our operations and investments the total unit cost reached 47.6 dollars per barrel largely due to the effect of lower prices on crude purchases and imports the incorporation of efficiencies of 68 cents.
Unknown Executive: In the downstream segment, we achieved outstanding financial and operational results with historical records in refining throughput and operational availability, thanks to the rigorous execution of scheduled major maintenance activities, operational efficiencies, as well as a favorable pricing scenario. This resulted in an EBITDA of $7.3 billion, the second highest in the segment's history. In 4Q2023, the combined refining throughput reached 429,000 barrels per day, 84,000 barrels per day higher than in the same period of the previous year. The integrated refining gross margin was $13.1 per barrel, mainly affected by weaker diesel, jet, and gasoline spreads.
Speaker Change: Per barrel allowed to partially offset the aforementioned effects.
Speaker Change: The lifting cost increased by 18, 45%, reaching $10 $91 per barrel, mainly impacted by external factors, such as El Nino phenomenon inflationary effects and the exchange rate, representing a $141 per barrel increase in 'twenty.
Speaker Change: 23, however, the efficiency plan mitigated the increase in lifting cost by 33 cents per box.
Speaker Change: Likewise, the cost per barrel transported and the refining cash cost increased by eight 8% and one 6% respectively, mainly due to inflationary effects on higher activity in both segments.
Speaker Change: This year, we continue to focus on incorporating efficiencies to maintain business competitiveness and sustainability now I will turn it over to David <unk>, who will discuss the main milestones of the low emission solutions business line. Thanks, Alberto our low emission.
Unknown Executive: In 2023, we accomplished multiple milestones, of which we highlight this one: operational availability of refining plants was above 95%, the highest in the last five years. Successful execution of the pyrolytic oil test from post-consumer plastic waste at the Barranca Berbeja refinery, enabling the production of around 19 tons of polypropylene in Esencia, contributing to the Ecopetrol Group's circular economy strategy. 95% progress in the construction of the mechanical recycling plant in Esencia, which is expected to start operations during the first quarter of 2024. Finally, Ecodiesel received the Econtech carbon neutral certification, becoming the first biodiesel company in Colombia to receive this certification.
<unk> business continues to move forward on the rollout of the Carbonization energy security and contribution to society. In 2023, we highlight the outstanding performance of our energy efficiency program, which between 2018 and 2020.
David: ZIP and optimization of the energy demand of 10 nine better use this is equivalent to 262 billion pesos in sap's with an impact of approximately 708000 tonnes of Cotwo equivalent only in 2020, we achieved a reduction of $3 nine.
David: And 274000 tons of Cotwo equivalent in our operations and incorporation of new technologies for energy optimization. These are the best results since the beginning of the measurement in 2018% to 150% higher than those reported in 2022 and in order.
Unknown Executive: Let's move on to the next slide, please. In 2023, the Ecopetrol Group managed to achieve efficiencies of 4.5 trillion pesos, leveraging outstanding operational performance and partially mitigating inflationary pressures, increases in energy costs, which combined with greater operating activity, raised the cost structure of our operations and investments. The total unit cost reached $47.6 per barrel, largely due to the effect of lower prices on crude and product purchases and imports. However, the incorporation of efficiencies of 68 cents per barrel allowed to partially offset the aforementioned effects.
David: As of magnitude is an optimization similar to the annual consumption of all households in the Columbia series of Cartagena.
David: To put that in alignment with our commitment to the de carbonization of our operations. We ended 2023 with the incorporation to our energy metrics of 472 megawatts.
David: Operations construction and execution of non conventional renewable energy sources, the operation of renewable energy sources in 2023 allowed us to reduce close to 19000 tons of C. O two equivalent and capture savings of more than 28 billion pesos.
Unknown Executive: The lifting cost increased by 18.45%, reaching $10.91 per barrel, mainly impacted by external factors such as the El Nino phenomena, inflationary effects, and the exchange rate, representing a $1.41 per barrel increase in 2023. However, the efficiency plan mitigated the increase in lifting costs by $0.33 per barrel. Likewise, the cost per bottle transported and the refining cash cost increased by 8.8% and 1.6%, respectively, mainly due to inflationary effects and higher activity in both segments.
David: Please state on goals within the framework of our strategy of incorporating nyhan.
David: By 2020 free flowing with sustainability and generating value for our stakeholders.
David: On the social front, we highlight two important initiatives with positive impact on the welfare of the community the social gas program. So far in 2023 connected to the natural gas service more than 20000 families in rural areas of our current Wahid and Atlantic and this is sexual comp.
David: <unk> of the <unk> agreement in Buenaventura, giving support and reliability to the gas supply for 37000 families. In this area of the country. During 2020 gas and LPG production reached 162000 barrels equivalent per day, representing 22% of the groups.
David Reaño: This year, we continue to focus on incorporating efficiencies to maintain business competitiveness and sustainability. Now, I will turn it over to David Reao, who will discuss the main milestones of the Low Emission Solutions business line. Thanks, Alberto.
David: <unk> mix, 75% of the country Marketshare and approximately 3.5 Chilean pesos.
David: Turning to energy fields, our commitment to the energy transition purely Tyson the country's energy security white holding firm in search of opportunities to meet our objectives.
David Reaño: Our Low Emission Solutions business continues to move forward on the road to decarbonization, energy security, and contribution to society. In 2023, we will highlight the outstanding performance of our energy efficiency program, which between 2018 and 2023 achieved an optimization of the energy demand of 10.9 petajoules. This is equivalent to 262 billion pesos in savings, with an impact of approximately 708,000 tons of CO2 equivalent. Furthermore, only in 2023, we achieved a reduction of 3.9 petajoules and 274,000 tons of CO2 equivalent in our operations, thanks to the incorporation of new technologies for energy optimization. These are the best results since the beginning of the measurement in 2018, 250% higher than those reported in 2022. And, in order of magnitude, it's an optimization similar to the annual consumption of all households in the Colombian cities of Cartagena, Ibagué, and Cucuta.
David: Now I will pass the floor to Milena Lopez, who will tell us about the main results of the transmission clouds and telecommunications segment over to Joe Molina.
Milena Lopez: Thank you David.
Milena Lopez: As mentioned on roads business generated positive operational and financial results accompanied by significant awards throughout 2023, which will translate into investments of $9 eight trillion pesos in the coming years, reinforcing our subsidiaries growth trajectory across various geographies in <unk>.
Milena Lopez: 2023, we sustained the growing trend in financial outcomes with revenues, reaching $14 two trillion and an EBIT of nine one trillion persons.
Milena Lopez: Representing nearly a 6% growth in these two areas compared to 2022 net profit attributable to Ecopetrol remains relatively stable at 675 billion.
Milena Lopez: Although the close to 2023 is that achieved a committed investment balance of approximately 30 trillion versus for the coming years, approximately 93% of the total of these investments correspond to bids and tenders that have been awarded to the company. Among the most notable milestones for the fourth quarter.
Milena Lopez: Order are the following in Peru. They have worked Luisa in consortium with our group blended here what was that for the construction operation and maintenance of two projects encompassing over a thousand kilometers of electrical transmission grid, and where they referential capex of approximately 3.2 trillion.
David Reaño: In alignment with our commitment to the decarbonization of our operations, we ended 2023 with the incorporation into our energy matrix of 472 megawatts in the operation, construction, and execution of non-conventional renewable energy sources. The operation of renewable energy sources in 2023 allowed us to reduce close to 19,000 tons of CO2 equivalent and capture savings of more than 28 billion pesos. The above restates our goals within the framework of our strategy of achieving 900 megawatts by 2025, growing with sustainability, and generating value for our stakeholders. On the social front, we highlight two important initiatives with a positive impact on the welfare of the community.
Milena Lopez: In Chile is aimed at it.
Milena Lopez: It was awarded the southern orbital Santiago concession for the design construction and operation of 25 kilometers of a new urban Highway. This project will have a reference capex of approximately one nine trillion.
Milena Lopez: In Brazil. The award he said that being a 40 enhancements, which collectively will amount to a capex of around 181 billion pits.
Milena Lopez: Management of operations for the following.
Milena Lopez: For Solar Park connection in Colombia, electrical interconnection, if the owner and then we will eliminate them, but he says it that'd be in Brazil.
Stations and the approval of integration into the National electrical system of the private project what that translates into is that continues to progress in the construction of 34 energy transmission projects in countries, where it operates which upon completion with that or.
Milena Lopez: The social gas program, which so far in 2023 connected more than 20,000 families in rural areas of Arauca, Guajira, and Atlantico, and the successful completion of the micro LNG agreement in Buenaventura, giving support and reliability to the gas supply for 37,000 families in this area of the country. During 2023, gas and LPG production reached 162,000 barrels equivalent per day, representing 22% of the group's production mix, 75% of the country market share, and approximately 3.5 trillion pesos EBITDA. 2023 reaffirms our commitment to the energy transition, prioritizing the country's energy security while holding firm in the search of opportunities to meet our objectives. Now, I will pass the floor to Milena Lopez, who will tell us about the main results of the transmission, roads, and telecommunications segment.
Milena Lopez: With 5500 kilometers to the grid and generate approximately $1 seven trillion versus in revenue between 2024 and 20 search finally progress continues in the execution of the Blue dye lot project and works in the Concessionaires Rutile adult Kenya, and Uganda in Chile.
Milena Lopez: Which will generate new income an extension of the terms of these concessions.
Speaker Change: Please let's move to the following slide.
Speaker Change: Our financial results reflect the excellent operating performance of vehicle petrol group, allowing us to achieve in 2023. The second best results in the company's history throughout the year, we achieved financial results that exceeded the targets set forth in our financial plan with superior results across key indicators.
Speaker Change: Our EBITDA margin reached 42% with a return on average capital invested of 11, 5%. We also achieved an EBITDA of $60 seven trillion persons with efficiency gains, reaching $4 five trillion vessels, representing a 25% annual growth.
Speaker Change: Investment execution capacity reached its highest level in eight years totaling approximately 27 trillion persons in line with our annual target of these investments 63% were concentrated in Colombia with the remaining 37% executed in the United States Chile.
Milena Lopez: Thank you, David. The transmission and roads business generated positive operational and financial results, accompanied by significant awards throughout 2023, which will translate into investments of 9.8 trillion pesos in the coming years, reinforcing our subsidiaries' growth trajectory across various jobs. In 2023, we sustained a growing trend in financial outcomes, with revenues reaching $14.2 trillion and EBITDA of $9.1 trillion, representing nearly 6% growth in these two areas compared to 2022. However, net profit attributable to Ecopetrol remained relatively stable at $675 billion.
Speaker Change: Peru, among others approximately 70% of total investments were allocated to exploration and production activities in our primary assets such as L'oreal is gone you sued and Dusty and Columbia as well as in Permian in the United States. This category also includes investments in natural gas totaling around.
Speaker Change: To meet you in person focused on assets like Phil Dania and could be azure in the PMO NATO and offshore blocks <unk> and qualified investments in the transportation and refining business accounted for a combined 13% focusing on intervention maintenance and asset reliability improvements supporting increased.
Speaker Change: Activity levels throughout the year, he transmission and toll road businesses represent 17% of the Capex for group a competitor.
Milena Lopez: As of the close of 2023, ISA achieved a committed investment balance of approximately 30 trillion pesos for the coming years. Approximately 93% of the total of these investments correspond to bids and tenders that have been awarded to the company. Among the most notable milestones for the fourth quarter are the following. In Peru, the award to ISA in consortium with the Grupo Energa de Bogotá for the construction, operation, and maintenance of two projects encompassing over a thousand kilometers of electrical transmission grids and with a referential capex of approximately 3.2 trillion pesos. In Chile, ISA Intervial was awarded the Southern Orbital Santiago concession for the design, construction, and operation of 25 kilometers of new urban highway.
Speaker Change: These investments were prominently directed towards power transmission, which accounts for approximately 87% of the investments advancing projects in electrical transmission in Colombia, and reinforcements and network improvements in Brazil traditional business lines, including natural gas contributed to approximate.
Speaker Change: 85% of EBITDA in 2023. Additionally, our transmission and toll road businesses made a significant contribution of 15% contributing to a stability of the groups income and operating costs. The gross debt to EBITDA ratio stood at one seven times aligned with our long term guide.
Speaker Change: <unk> to remain below two five times gross debt to EBITDA as part of our financing strategy. We successfully issued a $1 85 billion dollar bond in the international markets. In January 2020 for these bonds was three two times oversubscribed confirming investment appetite.
Milena Lopez: This project will have a reference capex of approximately 1.9 trillion pesos. In Brazil, the award through ISA CETEPI of 40 enhancements, which collectively will amount to a capex of around 181 billion pesos. The commencement of operations for the following projects – Guayapo Solar Park Connection in Colombia, the electrical interconnection Itaunas and Triángulo Minero by ISA CETEPI in Brazil, three substations, and the approval of integration into the National Electric System of the private project Puerto Chancay in Peru.
Speaker Change: For IP.
Speaker Change: <unk> issuance was accompanied by the repurchase of our bonds maturing in 2025, reflecting a proactive debt management strategy of our future maturity.
Speaker Change: These operations allowed us to optimize short term liquidity management, while maintaining debt cost at competitive levels for 2024 maturities were in the process of renewing a committed line for $1 $2 billion and will be covering the remaining amortization with the resources from the aforementioned bond let's move.
Speaker Change: Onto the next flight piece regarding.
Speaker Change: Regarding our liquidity position the Ecopetrol group closed 2023, with a robust cash position of $14. Three trillion persons are operating cash flow was $19 eight trillion pesos, which a sense to $41 four trillion pesos when including the field.
Milena Lopez: ISA continues to progress with the construction of 34 energy transmission projects in countries where it operates, which upon completion would add over 5,500 kilometers to the grid and generate approximately $1.7 trillion in revenue between 2024 and 2030. Finally, progress continues in the execution of the Ruta del LOA project and works in the concessionaires Ruta de la Araucana and Ruta de los Ros in Chile, which will generate new income and extend the terms of these concessions. Please, let's move to the following slide. Our financial results reflect the excellent operating performance of the Ecopetrol Group, allowing us to achieve the second best results in the company's history in 2023. Throughout the year, we achieved financial results that exceeded the targets set forth in our financial plan, with superior results across key indicators. Our EBITDA margin reached 42%, with a return on average capital invested of 11.5%.
Speaker Change: This stabilization fund compensation. Additionally, there were significant cash disbursements for Capex and the net movement of debt and interest totaled five eight trillion tests in terms of the fuel price stabilization fund. We ended 2020 with positiveness the outstanding balance from <unk>.
Speaker Change: Thousand 22 was fully settled.
Speaker Change: And the payments to the nation totaling 21, six trillion Purcell and $4 seven trillion persons that were received in cash. In addition, due to a gradual increase in gasoline prices in the country by approximately 4800 vessels per gallon over 2023, we experienced.
Speaker Change: Our accumulation in the accounts receivable when compared to 2022 closing 2023 with a setback balance of $20 five trillion pests regarding taxes. The effective tax rate for 2023 was 36, 6% compared to 31, 4%.
Speaker Change: In 2022, mainly due to the windfall tax established by the recent tax reform for the fourth quarter of 2023 to tax adjustments were made the first one regarding the income tax provision in accordance to the constitutional court ruling in November of 2023 that enabled the tax.
Milena Lopez: We also achieved an EBITDA of 60.7 trillion pesos, with efficiency gains reaching 4.5 trillion pesos, representing a 25% annual growth. Our investment execution capacity reached its highest level in eight years, totaling approximately 27 trillion pesos in line with our annual target. Of these investments, 63% were concentrated in Colombia, with the remaining 37% executed in the United States, Chile, and Peru, among others.
Speaker Change: Deductibility of royalty payments the second associated to the income tax surcharge, which ended the year at 10% due to the average price of Brent throughout 2023, let's move to the next slide please.
Speaker Change: As part of the 2014 strategy our investment plan for 2024 maintained high levels of investment, reflecting our commitment to the country's energy security and transition we expect to execute investments between 23, and 27 trillion persons with approximately 45% of these directed towards.
Milena Lopez: Approximately 70% of total investments were allocated to exploration and production activities in our primary assets, such as Rurales, Cao Sur, and Castilla in Colombia, as well as in Permian in the United States. This category also includes investments in natural gas, totaling around 3 trillion pesos, focused on assets like Florea and Cupiagua in Piedmont, Brazil, and offshore blocks Tairona and Colfax. Investments in the transportation and refining business accounted for a combined 13%, focusing on intervention, maintenance, and asset reliability improvements, supporting increased activity levels throughout the year. The transmission and toll road businesses represent 17% of the capex for Grupo Ecopetrol.
Speaker Change: Energy transition initiatives, including low emission solutions natural gas supply.
Speaker Change: He is G investments decarbonization electric transmission and the remaining 55% will focus on energy security and long term cash protection in line with strengthening our traditional base.
Speaker Change: These investment levels allow us to plan for profitable production between 725, and 730000 barrels per day maintain transported volumes around the 1 million barrels per day and throughput at our refineries between 420 and 430000 barrels per day, considering an average Brent price.
Speaker Change: Scenario of $75 per barrel for the year, we expect to maintain competitive returns with a return on average capital invested of around 9% and then EBITDA margin of 38% as well as transfers to the nation exceeding 38 trillion.
Milena Lopez: These investments were prominently directed towards power transmission, which accounts for approximately 87 percent of the investments advancing projects in electrical transmission in Colombia and reinforcements and network improvements in Brazil. Traditional business lines, including natural gas, contributed to approximately 85 percent of EBITDA in 2023. Additionally, our transmission and toll roads businesses made a significant contribution of 15 percent, contributing to the stability of the group's income and operating cash.
Speaker Change: Furthermore, with a focus on cost control and mitigation between 'twenty 'twenty four and 2026, we will incorporate targets for commercial and operational efficiencies expense control and austerity totaling over 700 million pets.
Speaker Change: I now hand over to Ricardo for his closing remarks.
Clothes in a challenging 2023, mark by lower oil prices and higher inflationary pressures. However, we achieved the group's second best year ever with it takes funeral operation results in terms of producing in the throughput of the refinery in volumes transported.
Ricardo: Through our island system and progress energy transition projects today, the Ecopetrol group aspires to be deleted in energy deal its vacation in Latin America in line with our training Cody strategic and that those points I want to bridge, especially on soon.
Milena Lopez: The gross debt to EBITDA ratio stood at 1.7 times, aligned with our long-term guidance to remain below 2.5 times gross debt to EBITDA. As part of our financing strategy, we successfully issued a $1.85 billion bond in the international markets in January 2024. This bond was 3.2 times oversubscribed, confirming investment appetite for our paper.
Ricardo: As to the subsidiaries of the Ecopetrol group.
Ricardo: One site us hop contributed to making history I spreads might get up to corporate truth Permian will contribute to the production with it says funeral performance azuela to sandeep connecting the entire country on achieving an unprecedented annual production of equation of guidelines.
Milena Lopez: This issuance was accompanied by the repurchase of a bond maturing in 2025, reflecting a proactive debt management strategy of our future maturity. These operations allowed us to optimize short-term liquidity management while maintaining debt costs at competitive levels. For the 2024 maturities, we're in the process of renewing a committed line for $1.2 billion, and we'll be covering the remaining amortizations with the resources from the aforementioned bond. Let's move on to the next slide.
Ricardo: I think the refineries for reaching a piece to the load with the higher operational availability in the last five years I also highlight different per months of how cool good to read into the elevens, who says for the wells on the Ecopetrol group during the year rock room, our commitment to them.
Ricardo: This information of the traditional business in Asia, I highlight different region of words or 10 trillion pesos that we will see the coming years as well as its going to reach them.
Ricardo: EBITDA of the business group, we remain committed to generate value for our shareholders.
Ricardo: Sure no holders investors on our country on those countries when we come up pretty soon as always maintaining responsibility.
Milena Lopez: Regarding our liquidity position, the Ecopetrol Group closed 2023 with a robust cash position of $14.3 trillion. Our operating cash flow was 19.8 trillion pesos, which ascended to 41.4 trillion pesos when including the Fuel Price Stabilization Fund compensation. Additionally, there were significant cash disbursements for CAPEX, and the net movements of debt and interest totaled 5.8 trillion pesos. In terms of the Fuel Price Stabilization Fund, we ended 2023 with positive news. The outstanding balance from 2022 was fully settled through dividend payments to the nation, totaling 21.6 trillion pesos and 4.7 trillion pesos that were received in cash. In addition, due to a gradual increase in gasoline prices in the country by approximately 4,800 pesos per gallon over 2023, we experienced a lower accumulation in the accounts receivable when compared to 2022, closing 2023 with a FIPEC balance of Regarding taxes, the effective tax rate for 2023 was 36.6% compared to 31.4% in 2022, mainly due to the windfall tax established by the recent tax reform.
Ricardo: Hospitality operations that facility's steps towards the energy transition. Thank you all for your participation with these we opened the equation and then sort of recession.
Ricardo: Okay.
Speaker Change: Thank you very much we'll start with our Q&A session.
Bancolombia: Otherwise from Bancolombia is online with a question Mr sounds a lot you can.
Speaker Change: Okay.
Good morning, everyone. Thank you for peace.
Bancolombia: And for the explanations.
Bancolombia: It is possible to know a little bit.
Bancolombia: More information about the reservoirs.
Bancolombia: When you mentioned.
Bancolombia: That organic growth.
I would like to know if you can tell.
Tell me how much was hit because of better forecast because of no project because of extensions and findings and 480 millions of.
Bancolombia: Barrels are how much was due to the price effect or in general by each of these.
Bancolombia: Items, you mentioned in the report.
Bancolombia: Good morning, Ricardo. Thank you for your question. It is Alberto Consuegra, Yes, we can give you this detail so I'm going to start mentioning.
Around.
Speaker Change: But Pete.
Alberto Consuegra: The 307 million barrels, let's talk about that so in the report we are very clear about the impact of re.
Alberto Consuegra: About that 31 million barrels if you add that.
Alberto Consuegra: Matt tricky process of the project, which is normal.
Alberto Consuegra: Five years views it as a 103 million barrels all those that are associated to no findings is 2 million barrels.
9 million, sorry related with better behavior of the production basic curve that gives you 307 on the other hand in terms of impact when you talked about external effects, we're talking about 58 million barrels.
Alberto Consuegra: Of which 30 are associated with price F 'twenty age with the inflation.
Alberto Consuegra: So what this does is that when we remove the cash flows of each field that tail will be affected by that impact both of price as well as the inflation in second place due to conditions, our technical revisions I 130 million barrels that logic.
Milena Lopez: For the fourth quarter of 2023, two tax adjustments were made. The first one, regarding the income tax provision in accordance with a constitutional court ruling in November of 2023 that enabled the tax deductibility of royalty payments. The second, associated to the income tax surcharge, which ended the year at 10% due to the average price of rent throughout 2023. Let's move to the next slide.
Alberto Consuegra: The impact is in gas due to water and decline of our mature fields, particularly in <unk> could be at what and what I had thought but besides that we had around 30 million, which are related with <unk>.
Alberto Consuegra: Regular technical provisions in the <unk>.
Alberto Consuegra: When in doubt.
Speaker Change: And we are.
Speaker Change: Thank you very much.
Speaker Change: Yeah.
Speaker Change: Okay.
The next question is from Andres Duarte from coffee Columbian now Mr. Duarte you can ask now.
Milena Lopez: As part of the 2040 strategy, our investment plan for 2024 maintains high levels of investment, reflecting our commitment to the country's energy security and transition. We expect to execute investments between 23 and 27 trillion pesos, with approximately 45% of these directed towards energy transition initiatives, including low emission solutions, natural gas supply, TESG investments, decarbonization, electric transmission, and roads. The remaining 55% will focus on energy security and long-term cash protection in line with strengthening our traditional business.
Speaker Change: Okay.
Andres Duarte: And that is Dorothy.
Andres Duarte: Please.
You can ask your question now.
Speaker Change: Thank you.
Dorothy: I have three questions.
Dorothy: Sure. The first one is please can you explain.
Dorothy: How will you can justify the impairment evolution in the downstream considering that that.
Dorothy: Price differentials between the.
Dorothy: Product.
Dorothy: Of oil have annual and quarterly decreases in annually. They have annually decreases so I would like to understand why.
Speaker Change: Ah you're showing an improved a 1.4 million pesos there.
Speaker Change: The other question is related with the production and congratulations.
Sorry for not saying this is for but congratulations for the production data of this quarter.
Ricardo ROA: These investment levels allow us to plan for profitable production between 725 and 730,000 barrels per day, maintain transported volumes around a million barrels per day, and throughput at our refineries between 420 and 430,000 barrels per day. Considering an average Brent price scenario of $75 per barrel for the year, we expect to maintain competitive returns with a return on average capital invested of around 9% and an EBITDA margin of 38%, as well as transfers to the nation exceeding 38 trillion pesos. Furthermore, with a focus on cost control and mitigation between 2024 and 2026, we will incorporate targets for commercial and operational efficiencies, expense control, and austerity, totaling over 7 trillion pesos. I now hand over to Ricardo for his closing remarks.
Speaker Change: Action that you're showing the fourth quarter.
Speaker Change: It's only overcome by that 2015 quarter fourth quarter, but have you considered that.
Speaker Change: That permit.
Speaker Change: Outside of Colombia will basically without the increase in the Permian production that has.
This wouldn't be a case. So you have a participation of 11, 7% in the fourth semester a cadre of 2023. This is not bad.
Speaker Change: That's well you are in different countries. So I would like basically is to understand what are your expectations in terms of production of permitted in the us considering that.
Speaker Change: Well as far as I understand that feel.
Speaker Change: So well go down faster and the last question if its possible otherwise I understand because they asked me to ask just two questions, but considering that increase for example in the cost of that lifting cost.
Speaker Change: All of the debt its above $30 in the fourth quarter and considering the decrease of over 6% of the reservoirs.
Ricardo ROA: We close a challenging 2023 marked by lower oil prices and higher inflationary pressures. However, we achieved the group's second best year ever with exceptional operational results in terms of production, throughput of the refinery, volumes transported through our pipeline system, and progress on energy transition projects. Today, the Ecopetrol Group aspires to be the leader in energy diversification in Latin America in line with our 2040 strategy, Energy that Transforms. I want to express special thanks to the subsidiaries of the Ecopetrol Group, which, alongside us, have contributed to making history.
How do you justify it.
Speaker Change: Is that.
Speaker Change: Decrease of a 90% decrease.
Exploration and production Capex for 2024, if you don't take the average numbers of 24 26 30, Tony for 2026 that you published last December. So these are my three questions. Thank you for allowing me to ask questions and good luck for 2024.
Speaker Change: Okay.
Speaker Change: Ricardo.
Andres Duarte: This is andres. Thank you for your acknowledgment to our results.
Andres Duarte: For the fourth quarter.
Andres Duarte: <unk> of that year, we just finalized first of all to explain that yes, it that impairment.
Speaker Change: Got it.
Speaker Change: Many of our assets has an impact on the results.
Speaker Change: Those 2.9.
Speaker Change: The Chilean pesos.
Ricardo ROA: I express my gratitude to Ecopetrol Permanent, which contributed to production with exceptional performance, as well as to Senate for connecting the entire country and achieving an unprecedented annual production of a question of pipelines. I thank the refineries for reaching a record load with the highest operational availability in the last five years. I also highlight the performance of Focal, contributing to the 11 successful wells in the Ecopetrol Group during the year and our commitment to the preservation of the traditional business.
Speaker Change: Second about the details I'll give the floor related to these elements of our cost increases to our expectations E vapor Permian production in the next two years I'll give the floor to Alberto <unk> He will share details.
Alberto Consuegra: Andres good morning.
Alberto Consuegra: About the Permian well I would like to first give you a number that I think it's relevant Permian effectively pushes the production in the <unk>.
Alberto Consuegra: Last quarter, but it's not less what can you sort of agro reality provide because as you already know we every year. We replaced around 100 100000 barrels per year due to the natural declination of the fields. So those three assets where it did great.
Ricardo ROA: In ESA, I highlight the transmission of words worth 10 trillion pesos that we will see in the coming years, as well as its contribution to the EBITDA of the business group. We remain committed to generating value for our shareholders, investors, and our country and those countries where we have a presence. Always Maintaining Responsible and Sustainability Operations that Accelerate Steps Towards the Energy Transition. Thank you all for your participation. With that, we open the question and answer session. Thank you very much.
Alberto Consuegra: Job about the Permian well the goal is to keep growing our production plan for 2024 is to bring the production to close to 80 83000 barrels.
Alberto Consuegra: Okay.
Alberto Consuegra: Per day and for 2025, it should be around 100000 barrels because it is important for the contribution of that last acquisition, which is a delaware area. So Permian very well the important thing is to sustain the production within the country and this is what that effort.
Unknown Executive: Administration yet. Good morning, everyone, for the Space and for the explanation. If it is possible to know a little bit more information about the reservoir where you met, when you met.
Alberto Consuegra: That we're going to do in terms of that Capex for 2024 towards and all the way to 2026 and the fall in the K Capex is not as you are presenting aide when you look at 2020 for that investment level that we will have in the Austrian <unk> of 300 $900 million.
Alberto Consuegra: I would like to know if you can tell me how much. Was it because of a better forecast, because of a new project, because of extensions and findings, and for a hundred and eighty million barrels. How much was due to the price effect or, in general, by each of these? and items you mentioned in the question. Good morning, Ricardo. Thank you for your question. It is Alberto Consuegra.
Which is very similar to what we did in 2023 we were in 4000 $200 million we have it.
Alberto Consuegra: Lower but the greatest investment we had in 2023 was in the Permian. So our expectation is to continue with investment levels similar to what in Colombia, similar to that to previous year 2022 and 2023.
Alberto Consuegra: Yes, we can give you these details. I'm going to start mentioning them around. The 307 million barrels. Let's talk about that.
Alberto Consuegra: So in the report, we are very clear about the impact of that 31 million barrels. If you add that Maturity Process of the Projects, which is normal. In five years' time, it's 103 million barrels. Others that are associated to new findings are 2 million barrels, and 109 million are related to better behavior of the production basic curve. That gives you 307.
Speaker Change: Hi, Andres.
Speaker Change: No.
Andres Duarte: I would like to clarify that when I was talking about.
Andres Duarte: 'twenty 'twenty four capex I'm considering that.
Annual average of that maximum and minimum range that you published and I am comparing both.
Andres Duarte: The plan that you published in the previous year as well as what was executed this year.
Andres Duarte: And the other thing if you didn't hear me well in that impairment I asked specifically about.
Alberto Consuegra: On the other hand, in terms of impacts, when you talked about external effects, we're talking about 58 million barrels, of which 30 are associated with price and 28 with inflation. So, what this does is that when we remove the cash flows of each field, the tail will be affected by that impact both of price as well as inflation. Second, place.
Andres Duarte: So downstream.
Speaker Change: So that's all I wanted to clarify and excuse me for interrupting.
Speaker Change: Let me mention something before giving the floor to milling about impairment. She will talk about that when you address when you look at the Capex ex provision in 2020 for the second part of the year is going to be affected due to the exploration investments, particularly on the offshore. So these could make it.
Alberto Consuegra: Due to conditions or technical revisions, 130 million barrels. The largest impact is on gas due to water and the decline of our mature fields, particularly in Ballenas, Cupiagua, and Resetón. But besides that, we had around 30 million which are related to regular technical revisions in the plan for the Magdalena Medio and Wheeler. Thank you very much.
Speaker Change: Great.
Speaker Change: Hi, Ann this this is milena Lopez talking about downstream impairment.
Milena Lopez: Maybe to illustrate a little bit more that impairment topic. There are two components that I believe are important to consider the first one is that when we are making to the impairment analysis of our assets. These analysis are.
Milena Lopez: Value exercises in the medium and long.
Milena Lopez: Short term so they cannot be compared to a picture of a particular quarter. So when we look at the projection of the performance of the downstream we see two specific things first an improvement in the availability of the refineries will allow us to <unk>.
Unknown Executive: The next question is from Andres Duarte from Corfi Colombiana. Mr. Duarte, you can ask anything. Please.
Unknown Executive: You can ask your question now. Thank you. I have three questions, but I think they're short.
Milena Lopez: <unk> greater loads when we are making.
Unknown Executive: The first one is, please, can you explain how you can justify the impairment evolution in the town? Considering that the price differentials between the product of oil have annual and quarterly decreases, and annually, they have annual decreases. So I would like to understand why. Are you showing an improved value of 1.4 million pesos there? On the other question is related to production and congratulations. Sorry for not saying this before, but congratulations on the production data for this quarter, the production that you're showing for the fourth quarter. It's only overcome by the 2015 quarter, fourth quarter, but if you consider the The from outside of Columbia.
Milena Lopez: Our projections forecast and the second one which is more significantly we said when we look at that refinery.
Milena Lopez: Refining management in the medium and long term and we compare those what we see in the future with what we saw last a year ago, we have better refinery markets. These leads to a recovery of around $370 million at the door.
Milena Lopez: Downstream now another important topic that you have to consider when you compare this to a mid and long term impairment comparisons is that well generally that differentials have that product <unk> cyclic during the year, particularly gas. So when we look at the numbers.
Milena Lopez: That differentials off the fourth quarter fees don't reflect the annual average nor the perspective of that mid and long term. So maybe that could explain that differential between what we see the fourth quarter and what we see on that impairment exercise on the long term.
Unknown Executive: Well, basically, without the increase in the premium production that we've had, this wouldn't be a case. So you have a participation of 11.7% in the fourth semester, quarter of 2023. This is not bad.
Unknown Executive: Well, you are in different countries. So I would like basically to understand what are your expectations in terms of production of permeate in the U.S. Considering that, well, as far as I understand that CO... Andres Gmez, Ana Rocha, Yeimy Baez, Mara Rozo, Diana Hoyos, Unknown Attendee, Unknown Shareholder, Jaime Uribe, Alberto Granger, Daniel Guardiola, Ricardo Barragan, Badr Alami, Daniel Guardiola, Andres Gmez, Ana Rocha, Yeimy Baez, Mara Rozo, Diana Hoyos, Unknown Shareholder, Alberto Granger, Jaime Uribe, Alberto Granger, Daniel Guardiola, Unknown Shareholder, Andres Gmez, of the, that it's above $30 in the fourth quarter and considering the decrease of over 6% of the reservoirs, how do you justify? is that, of a 90% decrease in the expiration and production CAIPEX for 2024, if you don't take the average numbers of 24, 26, 2024, 2026, that you published last December. So these are my three questions, and thank you for allowing me to ask questions, and good luck for 2026. Ricardo, this is Andres.
Speaker Change: You very much.
Speaker Change: One question, one yes is online and he's going to ask a question. Mr. O'neil you can ask.
O'neil: Good morning, and welcome everyone Yours from BTG factor all thank you for the time and just a quick question about the sales cost in this quarter.
O'neil: Why did you have a strong increase in the cost sales cost with that led that.
O'neil: Yeah.
O'neil: Net margin very below what we signed the of the first quarters. It was there something specific and what are you going to do it the next quarters in order to recover that net margin that you previously had.
Speaker Change: Thank you.
Speaker Change: Milena Lopez it sounds strange one so two components that I believe are important understand that quarterly cost historically nickel, but they're all in the fourth quarter we.
Speaker Change: You see costs that are above the other quarters.
Speaker Change: Because of a greater of accused here and as well as our crews. So if look at the fourth quarter of last year. It was around 14% above the cost versus the third quarter D. C is even higher we are seeing an increase of around 19% in cost when we compare with the previous quarter.
Speaker Change: So let me make a part of the fourth quarter of this year and the fourth quarter of last year to eliminate that cycles that will provide us a better perspective of what happens in the cost. So when we look at the variable costs and then well let me.
Ricardo ROA: Thank you for your acknowledgement of our results, for the fourth quarter production of that year we just finalized. First of all, to explain that yes, the impairment of our assets has an impact on the results, close to 0.9 trillion. Second, about the details, I'll give the floor related to these elements of cost increases our expectations of permanent production in the next years. I'll give the floor to Alberto Concejuca.
Speaker Change: I'll tell you that fixed when we look at the variables. There are two components that impact variable cost what we make this comparison basically we have first in inventory, which is significative comparing that number fourth quarter versus third quarter. The inventory has a cost of $1 seven Chile.
Alberto Consuegra: He will share it with you. Andres, good morning. What about the Permian? Well, I would like to first give you a number that I think is relevant. Permian effectively pushes the production in the last quarter, but it's not less what Cao Sur and Roviales provide. Because, as you already know, we replace around 100,000 barrels per year due to the natural declination of the fields. So those three assets did great. They did the job about the Permian.
Speaker Change: And this is due to a decrease on the cost or value of the inventory at these has several components a volumetric component because we had more sales in a very planned it.
Speaker Change: Yeah.
Speaker Change: Evaluation, because what we evaluated we give up a car versus how we evaluate them. We have an exchange rate that is below 800, and 740 <unk> around that so we have a large decrease of the exchange rate.
Alberto Consuegra: Well, the goal is to keep growing our production. The plan for 2024 is to bring the production to close to 80, 83,000 barrels for the last acquisition, which is a Delaware area. So Permian is doing very well.
Speaker Change: We also went from 86 to $82 per semester and a decrease in the product differentials Theres a large decrease in the diesel differentials around above $20 and a fall of $7 in the gasoline differentials. So this impact is one point.
Alberto Consuegra: The important thing is to sustain production within the country. And this is what the effort that we're going to do in terms of that CAPEX for 2024 and all the way to 2020. And the fall in CAPEX is not as you are presenting it. When you look at 2024, the investment level that we will have in the off stream is $300,000,000,000, which is very similar to what we did in 2021. We were in for $4,200 million.
Speaker Change: Chilean pesos and it is important that as we don't have like Mutton numbers index change rate differentials and the Brent. This is not a cost that she repeated. So this is just happened in this quarter I won't repeat itself secondly, impacting viable caused the increase in power cost power.
Alberto Consuegra: We have, it's lower, but the greatest investment we had in 2023 was in permeate. So our expectation is to continue with investment levels similar to those in Colombia, similar to the two previous years, 2020 to 2020. Hi Andres.
Speaker Change: Cost increased <unk> 300 billion pesos. So this is something that.
Happened because of the third quarter of this year, we see an increase in these energy cost due to our exposure to the stock market and increase in the power and electric costs due to that phenomenon and Nino, which is something that we will that will have an impact in the first quarter of this year because we still.
Unknown Executive: I would like to clarify that when I was talking about 2024 CAPEX, I'm considering that the Annual Average of the Maximum and Minimum Range that you published, and I am comparing both. The plan that you published in the previous year as well as what was executed. And the other thing, well, if you didn't hear me well in the impairment, I asked specifically about. Sit down.
Speaker Change: Have high cost.
Speaker Change: Power costs due to an phenomenon Neal but at the end of this year. This could should be corrected. These in terms all the variables that have a important situations now fixed cost fixed cost do have structural challenges that are larger basically.
Milena Lopez: So that's all I wanted to clarify, and excuse me for interruption. Let me mention something before giving the floor to Melina on impairment. Andres, when you look at the CAPEX distribution in 2024, the second part of the year is going to be affected due to the exploration investments, particularly on the offshore. So that could make a difference. Hi Andres, this is Milena Lopez talking about downstream impairment. Maybe to illustrate a little bit more the impairment topic, there are two components that I believe are important to consider.
Speaker Change: <unk> services high right now for the operation with an increase of 300 billion pesos and and maintenance in visa Master lease in this quarter, we see greater maintenance and an increase in that inflation of this cost and an increase of 400 billion pesos. These too.
Speaker Change: Opponents that at around an increase of 700 billion pesos, when we compare with the previous quarter last year. The favorite recorded last year, yes, we have the inflationary aspects and challenges of cost challenges that with our efficiency plans. We are seeing how to Augusta. So yes. There is.
Milena Lopez: The first one is that when we are making the impairment analysis of our assets, these analyses are value exercises in the medium and long term, not in the short term. So they cannot be compared to a picture of a particular quarter. So when we look at the projection of the performance of the downstream, we see two specific things. First, an improvement in the availability of the refineries would allow us to have greater loads when we are making forecasts. And the second, which is more significant, is that when we look at refining management in the mean and long term and compare what we see in the future with what we saw last year ago, we have better refinery margins. This leads to a recovery of around $370 million at the downstream. Now, another important topic that you have to consider when you compare these two mid and long-term impairment comparisons is that, generally, the differentials of the products are cyclic during the year, particularly gas.
Speaker Change: That primary component and that is a long term inflationary component that makes at this stage churn between both.
Thank you Melanie.
Speaker Change: The next question comes from Andres Cardona from Citibank, Mr. Cardon that you can ask them now.
Thank you good morning to everyone I have two questions. The first one is related with the production guide of 'twenty 'twenty four.
Andres Cardona: 725 to 730 <unk>.
Andres Cardona: Yeah.
Andres Cardona: Barrels so how can we connect with the 758000 barrels of.
Andres Cardona: The third of the fourth quarter Y to D. What are you why when are you going to explain this decline and about the reservoir is can you. Please explain in terms of the inflation we chose the components.
Andres Cardona: God varied the most and which was the magnitude.
Milena Lopez: So when we look at the numbers of the differentials for the fourth quarter, these don't reflect the annual average nor the perspectives for the mid and long term. So, maybe that could explain that differential between what we see in the fourth quarter and what we see in that impairment exercise over the long term. Thank you very much. Juan Jose Munoz is online, and he's going to ask a question. Mr. Munoz, you can.
Andres Cardona: Certification of reservoirs of the previous year understanding the price effect, there's off price fall other prices relatively high historically and I understand that.
Andres Cardona: That.
Andres Cardona: Why why do you have these revision due to price effect from $82 per barrel.
Speaker Change: Andres Alberto can say goodbye. Thank you for your questions.
Andres Alberto: So I will begin with the production guide.
Milena Lopez: Good morning, Juan Jose Munoz from BTG Factual. Thank you for your time. And just a quick question about the sales costs in this quarter. Why did you have a strong increase in the costs, sales costs that led to a Net Margin Very Below What We Signed In The First Quarter. Was There Something Specific, And What Are You Going To Do In The Next Quarters In Order To Recover That Net Margin That You Previously Had? Milena Lopez is answering Juan. So two components that I believe are important: understanding the quarterly cost. Historically, in Ecopetrol, in the fourth quarter, we see costs that are above the other quarters? because of greater evacuation as well as accrued it. So if you look at the fourth quarter of last year, it was around 14% above the cost versus the third quarter. This year it is even higher.
First I'll make reference to the Permian.
Andres Alberto: Who that behavior of Permian is historic call at the end of the year. We had the production is always higher and then we have to live with two things one that the normal decrease of the wells that are already in production and then next.
Andres Alberto: Perforation campaign, so that production of that program, which was a peak of 130 <unk> hundred 13 barrels 1000 barrels per day of barrel of oil when you see these in the App production average for 'twenty 'twenty four eight between a D and <unk>.
Andres Alberto: 83000 barrels so that's the first impact of cyclin E suite or a liability management.
Which.
Andres Alberto: Where our risk management that we can attribute to the Venlo Manav El Nino that is related with a closure of ROE.
Andres Alberto: For example is it or specifically it will be Alice and Kirsty gas fields, well, we have long droughts.
Milena Lopez: We are seeing an increase of around 19% in cost when we compare it with the previous quarter. So, let me make a comparison between the fourth quarter of this year and the fourth quarter of last year to eliminate the cycles that will provide us a better perspective of what happens in costs. So when we look at the variable cost, And then, let me, I'll tell you the fix. When we look at the variables, there are two components that impact the variable costs when we make this comparison. Basically, we have first an inventory, which is significant comparing the number fourth quarter versus third quarter. The inventory has a cost of one point seven trillion, and this is due to a decrease in the cost or value of the inventory.
Andres Alberto: Uh huh.
Andres Alberto: These will be affected and what the corporate environment of corporations do is stay close.
Andres Alberto: The waterfalls gradually this is what we are seeing.
Andres Alberto: Seeing right now and we also need to know the physicals at the safety situation that.
Andres Alberto: And if you look at the history, usually during January to March.
Andres Alberto: We see these at the previous years as well. So this risk management is also in our production vision that is why we have that we have between 725 to 730000.
Andres Alberto: Barrels a one on one high side in terms of the reserves, we need to mention something.
Andres Alberto: I was mentioning in her previous intervention that yes, we do have an impact due to price and inflation when we run our cash flows to that Ed.
Milena Lopez: And these have several components, a volumetric component because we had more sales and a very important evaluation because when we evaluate them versus how we evaluate them, we have an exchange rate that is below a hundred and seven hundred and forty pesos around that, so we have a large decrease in the exchange rate. We also went from 80. $6 to $82 per semester and saw a decrease in product differentials.
Andres Alberto: Economical the bit of the fields, we have an impact on that SEC price that is $55 per barrel plus the inflation. So that's the reason that we have to make a technical revision, it's not related with the fact that right now we're talking about break even at the higher brakeman.
And each of our fields.
Andres Alberto: Nevertheless, it is true that the fact that we have a price.
Milena Lopez: There's been a large decrease in the diesel differentials, around above $20, and a fall of $7 in the gasoline differentials. So this impact is 1.7 trillion pesos, and it is important that, as we don't have large numbers in the exchange rate differentials and the rent, this is not a cost that should be repeated. So this just happened in this quarter. It won't repeat itself.
Andres Alberto: That it's unfavorable cold paired to 2022 and the inflation.
Andres Alberto: Well it does affect the development plans of some fields that I already mentioned and those fields will be outside of the norm over the five years and they won't fit in terms of our reservoirs they lose reserve reservoir as compared to the web.
Andres Alberto: This year. So these are the effects that we see right now Andres and thank you for your questions.
Milena Lopez: The second impact on variable cost is the increase in power cost due to an increase in 300 billion pesos. So this is something that happened because in the third quarter of this year, we saw an increase in energy costs due to our exposure to the stock market and an increase in power costs due to the Fenomeno del Nio, which is something that will have an impact in the first quarter of this year because we still have high energy costs due to the Fenomeno del Nio, but at the end of this year, these should be corrected. These are in terms of the variables that have important situations.
Andres Alberto: Katherine Ortiz from Colorado does that even that is going to ask a question.
Katherine Ortiz: Mr. <unk> you can ask.
Katherine Ortiz: Good morning, everyone I Hope you can hear me well.
Katherine Ortiz: Okay.
Katherine Ortiz: Yeah.
Speaker Change: Good morning, Thank you for.
Speaker Change: Providing me this space I have a question related with.
Speaker Change: Uh huh.
Speaker Change: Rice stabilization fund of the feel as we learned about that David and proposal for 2024, and we have heard the ministry.
Speaker Change: The minister talking that this year dividends.
Speaker Change: Total dividend will not cross ways.
Milena Lopez: Now, fixed costs. Fixed costs do have structural challenges that are larger, basically in services hired for the operation with an increase of 300 billion pesos and in maintenance. In this quarter, we see greater maintenance and an increase in the inflation of this cost and an increase of 400 billion pesos. These two components add around an increase of 700 billion pesos when we compare with the previous quarter last year and the same quarter last year. Yes, we have the inflationary aspects and challenges of cost challenges that, with our efficiency plans, we are seeing how to adjust. So yes, this is a temporary component and a long-term inflationary component that makes a distinction between them. Thank you, Milen. The next question comes from Andres Cardona from Citibank. Mr. Cardona, you can ask him. Thank you. Good morning to everyone.
Speaker Change: The price stabilization fund so I would like to know if you are clear about how youre going to pay this amount, especially because when we look at the budget availability and the financial the government's financial plan, we cannot see that that Ecuador petrol.
Speaker Change: Payment is going to be incorporated or Eve, we decided that at least a 2024. They are not going to pay this money and need that sense well.
Speaker Change: Weight leverage indicators are you expecting in order for the to close this year without considering the payment and including what you already mentioned with the Guy I talked about what the government. Thank you very much.
Speaker Change: Thank you Catherine good morning D. C suite carpet Rojas, yes, effectively one of the aspects that we have acknowledged about us the national government support is the appropriation in the payment of that debt back resources.
Unknown Executive: I have two questions. The first one is related to the production guide of 2024, 725 to 730.
Unknown Executive: So how could we connect it with the 758,000 barrels of the third of the fourth quarter? Why? Then who are you?
Speaker Change: With the amount of or after the closure of 2020 to $36 7 million. These have been made and that's why we have the execution level of 97% in around 27 trillion in 2023 for this year. These fund closer.
Unknown Executive: Why? When are you going to explain this decline? And about the reservoirs? Can you please explain in terms of inflation? What are the components?
Alberto Consuegra: that varied the most and which was the magnitude of the certification of reservoirs of the previous year understanding the price effect. There's a price fall, and the price is relatively high historically, and I understand that. Why? Why do you have this revision due to the price effect from $82 per barrel? Andres, Alberto Consegra.
Speaker Change: 25.
Speaker Change: What was cost.
Speaker Change: That subsidy delivered to the demand of 2023 in gasoline and diesel and resources at this time don't come under the previous of the mythology of 2023.
Speaker Change: Due to the payment of dividends to the nation, but because.
Speaker Change: Now they have a different methodology that I think milena Lopez to explain.
Alberto Consuegra: Thank you for your question. So I will begin with the production guide. And first, I'll make reference to the permutations whose behavior of Permian is historical.
Speaker Change: Hi, Catherine this is Milena Lopez, so right. We during 'twenty 'twenty four we must receive 20.7 trillion pesos as a payment of a bag by that national government. According to what has happened before and what is agreed with the government each.
Alberto Consuegra: At the end of the year, production is always higher, and then we have to live with two things. One, the normal decrease in the wells that are already in production and the next perforation campaign. Hence, the production of the Permian, which was a peak of 113,000 barrels per day of oil. When you see these in the production average for 2024, it's between 80 and 83,000 barrels. So that's the first impact. The second is with our liability management, which or risk management that we can attribute to the phenomenon of El Nino that is related to the closure of, for example, or specifically, Rubiales and Castilla fields. When we have long droughts, these will be affected. And what environmental corporations do is they gradually close the waterfalls.
Speaker Change: Quarter.
Speaker Change: We cause.
Milena Lopez: The subsidies and they must be paid during the next 12 months. So we are going to receive quarterly payments from the government.
Milena Lopez: Paying those.
Milena Lopez: That's.
Milena Lopez: Which is what is the difference this year in the past we've done what we did there.
Milena Lopez: Denominate.
Milena Lopez: Crossing the dividends, which is an accounting movement.
Milena Lopez: Just ex change the.
Milena Lopez: Uh huh.
Milena Lopez: Joyce.
Milena Lopez: We the government is going to pay us a.
Milena Lopez: With the one that we need to pay for dividends. So we don't give or receive anything but this year, we're going to receive our quarterly payment from the government and we on our side on the dates that we must pay the dividends, we will be paying the dividends to the nation. So that's why it means that we have.
Milena Lopez: Not going to.
Alberto Consuegra: This is what we are seeing right now. And we also need to know the physical safety situation. And if you look at the history, usually during January to March, we see these in the previous years as well. So this risk management is also in our production vision. That is why we have that vision between seven hundred and twenty five to seven hundred and thirty thousand barrels.
Milena Lopez: Crossing accounts.
Milena Lopez: It's important to highlight that these we well we need an approval from the board at that meeting. This is going to be submitted to voting. This includes dividends to the nation of 11.3 trillion pesos less than that 20.3 that we are going to receive from feedback so that net.
Alberto Consuegra: In terms of the reserves, we need to mention something. I mentioned in our previous intervention that yes, we do have an impact due to price and inflation. When we run our cash flows to the economical limit of the fields, we have an impact on that SEC price that is $15.5 per barrel plus inflation. So that's the reason that we have to make a technical revision. It's not related to the fact that right now.
Milena Lopez: Amount is going to be received in cash payments that improve that liquidity position of our company.
Milena Lopez: Yeah.
Speaker Change: Thank you very much.
Speaker Change: Okay.
Speaker Change: Let's begin with questions in English.
Speaker Change: Bruno Montanari from Morgan Stanley has a question.
Bruno Montanari: Mr. <unk> you can ask now.
Bruno Montanari: Hi, Hello, everyone. Thank you for taking my questions I have two questions and a follow up.
Bruno Montanari: The first question is about the lifting costs. So we saw.
Bruno Montanari: Some increases in leasing costs in the second half of the year are now, finishing the year at $13 per barrel I remember previously the company used to talk about a short to medium term level of lifting costs between nine and $10 per barrel. So I was wondering if we should think.
Alberto Consuegra: We're talking about breaking the higher break, in each of our Nevertheless, it is true that the fact that we have a price that is unfavorable compared to 2022 and inflation, Well, it does affect the development plans of some fields that I have already mentioned, and those fields will be outside of the norm of the five years, and they won't fit in terms of reservoirs. They lose reserve reservoirs compared to the previous year. So these are the effects that we see right now, Andres, and thank you for your time. Catherine Ortiz from Corredores de Vivienda is going to ask a question. Miss Ortiz, you can.
Bruno Montanari: Lifting costs.
Bruno Montanari: <unk>.
Bruno Montanari: The current level, so around 12 to $13 per barrel in 2024, or if we should expect costs can still go back to lower levels between nine and $10 per barrel.
Bruno Montanari: My second question is about the refining margin. So I just wanted to understand.
Bruno Montanari: Why.
Bruno Montanari: The realized.
Margin of the company were so much lower than the international crack spreads.
Bruno Montanari: And get an idea of what we expect in the next few quarters if margins can go back to <unk>.
Ricardo ROA: Good morning, everyone. I hope you can hear me well. Good morning. Thank you for providing me with this space. I have a question related to The Price Stabilization Fund of the fuels, we learned about the dividend proposal for 2024, and we heard the ministry. The minister said that this year's dividends, Ecopetrol dividends will not cross with the Price Stabilization Fund. So I would like to know if you are clear about how you're going to pay this amount, especially because when we look at the budget availability and the finance government's financial plan, we cannot see that the Ecopetrol payment is going to be incorporated, or if we have decided that at least in 2024, they are not going to pay this money. And in that sense, Well, with the leverage indicators, what are you expecting in the closest year without considering the payment and including what you already mentioned with the government and talked about with the government? Thank you very much. Thank you, Katherine. Good morning.
Our healthy levels.
Bruno Montanari: And then just wanted to confirm on the production.
Bruno Montanari: If the reason for the spike in production in the fourth quarter. It was only because of the Permian and if we should expect now production to decline a more pronounced in the first quarter of the year. Thank you very much.
Bruno Montanari: Yeah.
Speaker Change: Bruno Alberta concerns about thank you for your questions. Good morning for you.
Speaker Change: About lifting cost what did we see Doug last quarter of Twin me 23, well, yes. There was an increase in the cost we really the average was around $13 per barrel. So an average cost of $10 91 for the whole year vs.
Speaker Change: Plus the grade is power cost plus of general services services.
Speaker Change: That if you look at if you.
Speaker Change: There is a good gate the net caused 70, 75% is in pesos and 25% is in dollars and the effective pesos was impacted by inflation accumulated by 2021 2023 which for Colombia, we're talking about 30%.
Ricardo ROA: This is Ricardo Rojas. Yes, effectively, one of the aspects that we have acknowledged about the national government support is the appropriation and payment of the TPEG resources, with the amount after the closure of 2022 being 36.7 million. These have been made, and that's why we have the execution level of 97% in around 27 trillion in 2023. For this year, this fund closes at 20.5 of what it cost to deliver the subsidy delivered to the demand of 2023 for gasoline and diesel and resources that this time don't come under the previous methodology of 2023 due to the payment of dividends donation, but because now they have a different methodology that I thank Milena Lopez to explain Hi Catherine, this is Milena Lopez.
Speaker Change: And this we see that impact in 2023 and of course, a part of 'twenty 'twenty four that energy power cost. We are also having an impact because of that and you will see this on the first quarter of this year as well.
Speaker Change: With a greater stock market cost price. So what is our expectation, yes in 'twenty 'twenty four we must be around $13 per barrel and with the idea of starting to renegotiate services that.
Speaker Change: Helped by our efficiency plans to make that interventions in order to have.
Speaker Change: The more competitive lifting costs, but yes, we see that impact both of the inflation as of the.
Speaker Change: Power costs in the first quarter of 2024.
Speaker Change: I'll also about the downstream.
Speaker Change: And I'll give the floor to wildcat. So he can add but I would say that when we look at 2023.
Milena Lopez: So, right, we during 2024, we must receive 20.7 trillion pesos as a payment of FPEG by the national government. According to what has happened before and what is agreed with the government, each. Quarter. The subsidies and they must be paid during the next 12 months. So we are going to receive quarterly payments from the government, paying those, which is what the differences here are. In the past, we've done what we did, the Nominate Crossing of dividends, which is an accounting movement. We just exchange the Envoys that the government is going to pay us with the one that we need to pay for dividends. So we don't give or receive anything.
Wildcat: We had three quarters weights.
Wildcat: Positive margins due to the behavior of the product prices, both diesel and gasoline and in the fourth quarter. The margins of the product the spread of the products falls to 10 around 10%, especially in the <unk> During December Steve.
Wildcat: Ted.
Wildcat: <unk> resolved in terms of margins what is the expectation for 2024, well what we seen during January and February our margins.
Wildcat: Little bit above of our plan, we're talking about 13 and $14 per barrel. So we have a very positive outlook Walter I don't know if you would like to add something.
Milena Lopez: But this year, we're going to receive a quarterly payment from the government, and on our side, on the date that we must pay the dividends, we will be paying the dividends to the nation. So that's why it means that we are not going to have to cross-check accounts.
Wildcat: One nov out from the fight of pregnancy.
Wildcat: Okay.
Wildcat: Two.
Walter: Just to add in 2023 in its context was an excellent year.
Milena Lopez: It's important to highlight that these we will need approval from the board meeting; this is going to be submitted for voting. This includes dividends to the nation of 11.3 trillion pesos, less than that 20.3 that we are going to receive from FEDPEC. So the net amount is going to be received in cash payments that improve the liquidity position of the company. Thank you very much.
Walter: We had the best EBITDA historical with a margin close to $18 per barrel.
Walter: The second best historical after 2022.
Walter: Yeah.
Walter: We had.
Walter: A good amount of barrels with something we had never achieved these amounts.
Walter: Thanks to our high.
Walter: Overcoming that 95% of our historical record and a load off guard by it and are we close to 200000 barrels day. Thanks to the implementation of that E. PCC project that added 56000.
Unknown Executive: Let's begin with questions in English. Bruno Montanari from Morgan Stanley has a question. Mr. Montanari, you can ask it now. Hello, everyone.
Walter: <unk> add to that refinery at the end of 2022.
Alberto Consuegra: Thank you for taking my questions. I have two questions and a follow-up. The first question is about lifting costs. So we saw some increases in lifting costs in the second half of the year, now finishing the year at $13 per barrel. I remember previously, the company used to talk about a short to medium-term level of lifting costs between $9 and $10 per barrel. So I was wondering if we should think of lifting costs staying at the current level, so around $12 to $13 per barrel in 2024. Or should we expect costs to go back to lower levels between $9 and $10 per barrel? My second question is about the refining margin. So I just wanted to understand why the realized margins of the company were so much lower than the international crack spreads and get an idea of what to expect in the next few quarters if margins can go back to more healthy levels. And then just wanted to confirm on production if the reason for the spike in production in the fourth quarter was only because of the Permian and if we should expect production to decline more pronounced in the first quarter of the year. Thank you very much.
Walter: But around cat.
Walter: Finished.
Walter: Yeah.
Walter: We had 241 barrels a day there.
Walter: So it's a great to see the last 16 years. So these.
Walter: And the fourth Q.
Walter: We had the greatest historical.
Walter: For our refineries.
Walter: And even though we had these good operational result, and are forced to kill a force could we see.
Walter: Decrease in our refinish if January margins associated to a fall of gasoline price gasoline in the fourth quarter, especially in December due to seasonal has a lower price, but in the fourth Q that price at fall we saw it even since opening.
Walter: Starting in October with the gasoline was and prices in one D. Jade of around seven $8 per barrel always all fall in the price of diesel and jet fuel. So these could be.
Walter: Good weekend that refinery margins in the fourth Q I compared to the third quarter and in our EBITDA in the fourth Q. It decrease even though it was our second best historical year consolidated for 2023, well, we see in 2024.
Walter: Or as I mentioned as Alberto mentioned, we see that the margins we are projecting.
Alberto Consuegra: Bruno, Alberto Consuelo, thank you for your question. Good morning for you, about the lifting cost. What did we see in the last quarter of 2023? Well, yes, there was an increase in the cost. The average was around $13 per barrel, so an average cost of $10.91 for the whole year.
Walter: Predicting two digit margins on the low side, maybe for a project of the average of 2024, but saying this what we've seen in January and February is that the margins are.
Walter: Our are stronger compared to what we forecasted originally and maybe they'll be closer to $50 per barrel plus or minus $2 per barrel any refractory load well were sold considering that we're going to be about 450000 barrels a day.
Alberto Consuegra: These plus the greatest power cost plus of general services, services that if you look at if you diverge the net cost 70 75% is in pesos and 25% is in dollars, and the effect in pesos was impacted by inflation accumulated by 2021-2023, which for Colombia, we're talking about 30%. And this, we see the impact in 2023. And of course, in part of 2024, the energy power cost is also going to have an impact because of the El Nio phenomenon. You will see these in the first quarter of this year as well, with a greater stock market cost price. So what is our expectation? Yes, in 2024, oil must be around $13 per barrel.
Walter: <unk> average for both refineries so in a range of 450 now for 125 weights.
Speaker Change: It's our forecast our projection for 2024, so Bruno Thanks for your question and I Hope I E.
Speaker Change: Gave you the answer it Bruno about production.
Speaker Change: What about the first quarter of this year 2024, the outlook I cannot share it but I can tell it gave it to you, but I will let you know what is happening in the production.
Speaker Change: Fair to la last quarter of the previous year.
Speaker Change: Yeah first of all there was a decrease that was expected in the Permian well, we make that next.
Alberto Consuegra: And with the idea of starting to renegotiate services that will be helped by our efficiency plans to make the interventions in order to have a more competitive lifting cost. But yes, we see the impact of inflation as well as power costs in this first quarter of 2024. Also about the down side. And I'll give the floor to Walter so he can add, but I would say that when we look at twenty, twenty.
Speaker Change: Perforation activity.
Speaker Change: Please recall that we have over 300.
Speaker Change: Wells in production, so that decline that behavior is getting particularly the first quarter second the impact of that maintenance all the coal power plant that we had at the beginning of the year that also has an effect on gas production and third the blockages are strikes that have.
Unknown Executive: We had three quarters with very positive margins due to the behavior of the product prices, both diesel and gas. And in the fourth quarter, these margins of the product, the spread of the products fell to 10, around 10%, especially in December, during December. This affected the result in terms of margins. What is the expectation for 2024? Well, what we've seen during January and February are margins a little bit above our plan. We're talking about 13 and 14 dollars per barrel. Okay. We have a very positive outlook. Walter, I don't know if you would like to add anything.
Speaker Change: The ASP articulated are we Alice and Anadarko copper chose.
Speaker Change: Our assets that we have with our associate park. So total we're saying that due to this impact we have around 400000 barrels that we have.
The fed in terms of production and the other impact mentioned is.
Speaker Change: The closure.
Speaker Change: Yeah.
Due to the.
Speaker Change: Droughts that also impact our production.
Thank you Bruno and here really now.
And how about the lifting cost that could give you some clarity.
Speaker Change: Of the impact of the different components.
Speaker Change: That lifting of inappropriate thrall is similar to what I mentioned in the cost where we have a greater lifting at the end of the year the fourth quarter.
Unknown Executive: OneNova from the Wright Apprenticeship to, Just to add, in 2023, in its context, was an excellent year. We had the best Evipta historical performance with a margin close to $18 per barrel, the second best performance after 2022.
Speaker Change: Due to greater cost execution. So that's why comparing the lifting of the fourth quarter of last year and this year, we see any significant increase of 45%.
Speaker Change: And I believe these are important to see the different components. When you look at these the most the largest component is the impact of the exchange rate around 75% of cost of the lifting costs are in pesos and the of the 45 increased 23%.
Unknown Executive: We had a good amount of barrels with something we had never achieved before, thanks to a high. Overcoming that 95% historical record in the load of Cartagena, very close to 200,000 barrels a day, thanks to the implementation of the EPCC project that added 50,000-60,000 capacity barrels to that refinery at the end of 2022. Finish. We had 241 barrels a day there in Barranca. So it has been the greatest in the last 16 years.
Speaker Change: Corresponds to what exchange rate that is 900 pesos below what we had on the third quarter of last year. So this is a very important component to understand the lifting cost the second.
Unknown Executive: So these and the fourth Q. We had the greatest historical performance for our refineries, and even though we have these good operational results and the fourth Q, the fourth Q, we saw a decrease in our refinery margins associated to a fall in gasoline prices. Gasoline in the fourth quarter, especially in December, due to seasonality has a lower price, but in the fourth Q, that price that fall, we saw it even since starting in October with gasoline was, and prices in one digit So these.
Speaker Change: Power energy cost of that 45, 9%, our energy cost and as I mentioned before both this quarter as in the first quarter of 2024, we will have some power costs that are going to be above of what we expected due to the impact of that El Nino phenomenon. This should be transitory and should be.
Speaker Change: Corrected by the end of the year and that E L impact.
Speaker Change: Are the other impacts are the inflation. If you look at the three components and you quantified them, it's easier to understand what's happening with the lifting cost and how we see it in the future that we should see a range between 12 and 13, assuming that we don't have large movement index change right.
Alberto Consuegra: The weekend, the refinery margins in the fourth Q compared to the third quarter, and our EBITDA in the fourth Q decreased even though it was the second best historical year consolidated for 2023. When we look at 2024, as Alberto mentioned, we see that the margins, we're projecting two-digit margins on the low side, maybe for the projected average of 2024. But saying this, what we've seen in January and February is that the margins are stronger compared to what we forecasted originally, and maybe they'll be closer to $15 per barrel plus or minus $2 per barrel. And in terms of refinery load, well, we're also considering that we're going to be above 450,000 barrels a day on average for both refineries, so in a range of 450 to 425, it's our forecast, our projection for 2024.
Speaker Change: Rodrigo Almeida from Banco Santander is online with a question Mr. Amit that you can ask them now.
Rodrigo Almeida: Hi, Ricardo Galena and the whole Ecopetrol team I have a couple of follow up questions actually and then one actual question I think I'll just go back to the discussion we're having just now on the upstream side.
And I understand there are three main components to the to the short term predictions outlook are we mentioned the Permian they maintain and sending the strikes.
Rodrigo Almeida: I just wanted to understand here, because we have a I would say a big difference in lifting costs from the Permian to the rest of the prediction Columbus I wanted to understand out of these three components, how much the Permian our way.
Rodrigo Almeida: Waiting on the on the impact for the first quarter. So it can better trying to understand here to the lifting cost outlook for the short term is all I think it would be helpful. The second follow up that I have.
Alberto Consuegra: So Bruno, thanks for your question, and I hope I gave you the answer, Bruno, about production. About the first quarter of this year, 2024, the outlook, I cannot share it, but I can tell you, I gave it to you, but I will let you know what is happening in production compared to the last quarter of the previous year. First of all, there was a decrease that was expected in the premium while we made the next perforation activity. Please recall that we have over 300 wells in production. So that decline, that behavior, is given particularly in this first quarter. Second, the impact of the maintenance of the Cupiawa plant that we had at the beginning of the year also has an effect on gas production. And third, the blockages, strikes that have taken place... Particularly in Rubiales and in Araca, Capachos.
Rodrigo Almeida: Regarding to refining.
Rodrigo Almeida: The downstream margins just to understand a little bit better.
Rodrigo Almeida: If I did understand correctly.
Rodrigo Almeida: You had some impacts from inventory turnover or something like this so if you could just confirm that.
Rodrigo Almeida: And I think we might have got something lost in translation trial do anybody I just wanted to understand a little bit better and then the actual question that I have which is the third point is related to the to the U S. Operation. The Permian now you you resumed production in the Gulf of Mexico through the JV as well I wanted to see I mean, you're you're doing it seems like youre doing more.
Rodrigo Almeida: First of all types outside of Colombia, right does this show any shift in strategy there.
Rodrigo Almeida: Terms of mindset regarding potentially investing more outside of Colombia for upstream projects I think those are the questions. Thank you.
Rodrigo Almeida: Yeah.
Rodrigo Almeida: Okay.
Speaker Change: Thank you Rodrigo for your questions they cut the raw precedent.
Alberto Consuegra: Assets that we have with our associate parks. So, in total, we're saying that due to this impact, we have around 400,000 barrels that we have deferred in terms of production. And the other impact mentioned is the closure.
Speaker Change: Yes, we have had as I mentioned before in detail that differences.
Speaker Change: In the short term and in the meantime related ways.
Speaker Change: The Permian.
Speaker Change: This was a very profitable more very efficient.
Alberto Consuegra: Due to the droughts that also impact our production. Thank you, Bruno, and here we go with the lifting cost, which can give you some clarity on the impact of the different components. That lifting of Ecopetrol is similar to what I mentioned in the cost, where we have a greater lifting at the end of the year, the fourth quarter, due to greater cost execution.
Speaker Change: Asset from a corporate strategy.
Speaker Change: And yes, we are evaluating the expectations of a greater production in that area.
Speaker Change: Where that evaluation.
Speaker Change: Well that allow us to seize those expectations will come true.
Speaker Change: So I'll give the floor to Alberto Consuegra. So he can also talk about the streaming that my Jamie industry. How it affects it is a strategy of investing more outside of Colombia, well I do want to answer that we're focused in our project of increasing our <unk>.
Milena Lopez: So that's why comparing the lifting of the fourth quarter of last year and this year, we see a significant increase of 45%. And I believe it is important to see the different components. When you look at these, the most important, the largest component is the impact of the exchange rate. Around 75% of the costs of the lifting costs are in pesos. And of the 45 increase, 23% corresponds to an exchange rate that is 900 pesos below what we had in the third quarter of last year. So this is a very important component to understand the lifting cost. The second is the power energy cost.
Florida Asian, and with a half a point of resources invested there we're focused in the greater recovery through the improved Eric.
Alberto Consuegra: Recharging, our fields with better per perforation and maintenance of our wells right now that's where we have focused our investments yes, we have important investments outside but theyre not done by Ecopetrol, they're done by Isa last year, almost 10 trillion pesos in assets to invest.
Alberto Consuegra:
Alberto Consuegra: And Panama that development of roads and assets.
Milena Lopez: Of that 45, 9% is for energy costs. And as I mentioned before, both this quarter and the first quarter of 2024, we will have some power costs that are going to be higher than what we expected due to the impact of the El Nio phenomenon. These should be transitory and should be corrected by the end of the year. And that impact, the other impacts are inflation. If you look at the three components and quantify them, it's easier to understand what's happening with the lifting cost and how we see it in the future, that we should see a range between 12 and 13, assuming that we don't have a large movements index. Rodrigo Almeida from Banco Santander is online with a question. Mr. Almeida, you can ask.
Alberto Consuegra: For transmission in Peru, Brazil, and roads in Chile. So this is what <unk>.
Alberto Consuegra: Has been managed from.
Alberto Consuegra: That budget and these are made by E mail.
Alberto Consuegra: Rodrigo Good morning. Thank you for your questions about the impact of let's say the inflation.
Rodrigo Almeida: And the Permian cost and how the program lifting cost well I can tell you it's a.
Rodrigo Almeida: This when you look at dollars that inflation, we had in the Permian assets.
Rodrigo Almeida: That also E backed that inverter.
Rodrigo Almeida: Capex, we're talking about 70% from one year to the next one this affects 2022 and 2023, so that lifting cost goes from $4 per barrel in 2020 to the fourth Q2 more than five $2 per barrel and a fourth Q of last year.
Alberto Consuegra: Hi Ricardo, Milena, and the whole Ecopetrol team. I actually have a couple of follow-up questions, actually, and then one actual question. I think I'll just go back to the discussion we're having just now on the upstream side. And I understand there are three main components to the short-term production outlook. We mentioned the Permian, the maintenance, and then the strikes. I just wanted to understand that because we have, I would say, a big difference in lifting costs from the Permian to the rest of the production in Colombia. So I wanted to understand, out of these three components, how much the Permian weighting is on the impact for the first quarter, so I can better try to understand here the lifting costs outlook for the short-term as well. I think it would be helpful.
Rodrigo Almeida: Here.
Rodrigo Almeida: That trend is going to be between four five and 5.5 dollars for these 2024 and while we reverse the impact of inflation product of two things the efficiency interventions as well as the growth in production.
Rodrigo Almeida: It is important to highlight that since this is an asset that has a primarily re charging.
Rodrigo Almeida: Okay.
Rodrigo Almeida: It is not compare with the mature.
Alberto Consuegra: The second follow-up that I have is regarding refining the downstream margins, just to understand a little bit better. If I understand correctly, you had some impacts from inventory turnover or something like this, so if you could just confirm that, and I think we might have got something lost in translation throughout the way, but I just wanted to understand that a little bit better. And then the actual question that I have, which the third point is related to the US operation, right? The Permian, and now you have resumed production in the Gulf of Mexico through the JV as well. I wanted to see what you're doing. It seems like you're doing more stuff outside Colombia, right?
Rodrigo Almeida: Because we have secondary recharging. So these makes a difference so these just to clarify.
Rodrigo Almeida: About downstream.
Rodrigo Almeida: I'm going to just ask I've mentioned, two things, which are Cui aimed at margin deterioration first of fall.
Rodrigo Almeida: In the spreads in that product differentials diesel and gasoline and the other related with greater costs that we saw in the fourth Q of last year. So these two.
Rodrigo Almeida: These two <unk>.
Wearables affect that net margin we had in the fourth Q of last year and I'm sure that they will also have an impact this year, but as we mentioned before we see and our margin expectations with the behavior of January February of this year that are more favorable.
Ricardo ROA: Does this show any shifting strategy there in terms of mindset regarding potentially investing more outside Colombia for upstream projects? I think those are the questions. Thank you. Thank you, Rodrigo, for your questions, Ricardo, President. Yes, we have had, as I mentioned before in detail, differences in the short term and in the midterm related to the Permian.
Rodrigo Almeida: And then what we had in our plan.
Perfect. Thank you.
Next question from Alejandro <unk> from J P. Morgan.
Alberto Consuegra: This was a very profitable, very efficient asset from Ecopetrol. And yes, we are evaluating the expectations of greater production in that area, where that evaluation will allow us to see if those expectations will come true. So I'll give the floor to Alberto Consegra.
Alejandro: Hi, Thanks for taking the question I think my previous my first question was already answered was related to the downstream I'm Martin could you explain what's both spreads and cost and then I just wanted to ask you in terms of opportunities to.
Alberto Consuegra: So he can also talk about the streaming, the margin in the streaming, how it affects the strategy of investing more outside of Colombia. Well, I do want to answer that. We're focused on our project of increasing our exploration, and we have important resources invested there. We're focused on greater recovery through improved recharging in our fields, better perforation, and maintenance of our wells right now. That's where we have focused our investments. Yes, we have important investments outside, but they're not done by Ecopetrol; they're done by ESA. Last year, almost 10 trillion pesos in assets to invest in Panama, the development of roads and assets for transmission in Peru, Brazil, and roads in Chile. So this is what has been managed from the budget, and these are made by EPA. Rodrigo, good morning.
Alejandro: To acquire any assets for Colombia, particularly on the gas side. If there's anything that you are looking that or if you're more focused simply on the exploration at this point. Thank you.
Alejandro: Okay.
Alejandro: Yeah.
Martin: Good morning, Alejandro Nikolas Senegal.
Martin: Our strategy and no business visor precedent answering in terms of <unk>.
Martin: Inorganic options Where's, yes, looking as always and part of our systematic procedure.
Martin: All our growth options burfoot gas as for oil in Colombia, and other geographies. This is part of the exercise we are permanently baking as those opportunities mature our approval process, we will public.
Martin: Make them public to the market.
Speaker Change: That's all I can say.
About that thank you very much.
Alberto Consuegra: Thank you for your questions about the impact of, let's say, the inflation in the premium cost and how the premium lifting costs. Well, I can tell you this, when you look in dollars, the inflation we had in the premium asset also impacts the inverter. CAPEX, we're talking about 17% from one year to the next. This affects 2022 and 2023. So the lifting cost goes from $4 per barrel in 2022 in the fourth Q to more than $5 per barrel in the fourth Q of last year. That trend is going to be between $4.5 and $5.5 per barrel for this year. And while we reverse the impact of inflation, the product of two things, efficiency interventions as well as growth in production. It is important to highlight that since this is an asset that has a primary recharging potential. It's not compared with the mature ones because we have secondary recharging. So these marks are different.
Speaker Change: Thank you.
Speaker Change: Please go below with a question.
Luiz Carvalho: Mr. Cavallo, you can ask now.
Cavallo: Yes, yes with any of you.
Cavallo: In fact, not with dividends.
Cavallo: So I'm, just trying to reconciliate and understand.
What will be the management approach in terms of proposal <unk>.
Luiz Carvalho: In terms of dividends for 2024, thank you.
Luiz Carvalho: They got a little our president of Ecopetrol. Thank you Luis for your questions.
Luiz Carvalho: Some of which we had already mentioned before answer before so yes of course, the production level in the fourth quarter of 2023.
Speaker Change: Is one of the highest records.
Speaker Change: Of the previous eight years and second it's a consequence of that effort we made to recover.
Speaker Change: With income on grade production.
Speaker Change: Ah.
Speaker Change: Lac we had due to the fall of oil price and to the excellent performance, we had in our fields, particularly in it at medallion Amelia and at La channels, but the expectation for production in 2024.
Alberto Consuegra: So just to clarify, about downstream. I'm going to just ask. I mentioned two things which were key in the margin deterioration. First of all, in the spreads, in the product differentials, diesel and gasoline, and the other related to greater costs that we saw in the fourth queue of last. So these two.
Yes.
Speaker Change: You have as a reference a decrease in the price first.
Speaker Change: Which.
Speaker Change: Is does it make it viable the extraction of all the field said, we're exploring commercially exploring right now and Oh exploiting right now and this is not that window of the mid and long term the maximum peak debt to Ecopetrol could have we see it towards that 29 30 with 808.
Alberto Consuegra: These two variables affect the net margin we had in the fourth quarter of last year, and I'm sure that they will also have an impact this year. But as we mentioned before, we see and margin expectations with the behavior of January and February this year that are more favorable than what we had in our. Perfect, thank you.
Speaker Change: Third 30 barrels production date that sees the analysis, we've done internally in the analysis of our strategy is a macro numbers for this strategy.
Nicolas: Next question from Alejandra Andrade from JP Morgan. Hi, thanks for taking the question. I think my previous first question was already answered, related to the downstream margins, which you explained were both spreads and costs.
Speaker Change: Of course, and what you in about the dividends, yes, we already mentioned that this year, it's not going we are not going to apply what we did last year, we're not going to make an accounting.
Nicolas: And then I just wanted to ask you in terms of opportunities to acquire any assets in Colombia, particularly on the gas side, if there's anything that you are looking at, or if you're more focused simply on exploration at this point. Thank you. Good morning, Alejandra, Nicolás from Senegal, strategy and no business, Vice President answering. In terms of inorganic options, we're, yes, looking as always, and this is part of our systematic procedure.
Speaker Change: Crossing accounts between the debt that we had with the subsidies of 2022 with the government.
Speaker Change: Across England with the risks.
Speaker Change: The risks of what that nation paid is so because the previous time, we could leverage our investment plan and the costs related with operation, but we are not going to do that this year and the last point I will give the floor to molina. So she can clarify, but I think that you already mentioned that methodology.
Nicolas: Growth options both for gas as well as for oil in Colombia and other geographies. This is part of the exercise we are permanently making as those opportunities mature our approval process. We will make them public.
Nicolas: That's all I can say about that. Thank you very much. Thank you. Luiz Carvalho has a question. Mr. Carvalho, you can ask now. Yes, yes, we can hear you.
Molina: As we said before dividends is a payout of 67%.
Speaker Change: We're responding to a dividend of $12 eight trillion.
Ricardo ROA: Act, not with dividends. So I'm just trying to reconciliate and understand what will be the management approach in terms of the proposal in terms of dividends for 2024. Thank you.
Speaker Change: Pesos.
Speaker Change: 7.3, or so the majority shareholder which is the nation at 1.5 to the minority shareholders. So.
Speaker Change: Dividends for the nation.
Ricardo ROA: Ricardo Roa, President of Ecopetrol. Thank you, Luis, for your questions, some of which we had already mentioned before.
Speaker Change: Yeah.
Speaker Change: They can be paid up to the December 31st So we will paying the nation after.
Ricardo ROA: So yes, of course, the production level in the fourth quarter of 2023 is one of the highest records of the previous eight years, and It's a consequence of the effort we made to recover Uncommon Grave Production, the lack we had due to the fall of oil prices and to the excellent performance we had in our fields, particularly in Magdalena Media and at Los Llanos. But the expectation for production in 2024 is, You have as a reference a decrease in the price first, which doesn't make it viable to extract all the fields that we are exploring, commercially exploring right now, and exploiting right now. And this is not the window for the mid and long term, the maximum peak that Ecopetrol could have.
Speaker Change: Paying back payments that we will receive quarterly.
Speaker Change: So we have no more questions.
Our live chat.
Speaker Change: Chad question Stefan Hamill from <unk> core capital asks can we give more details about that tax movement at the option before impairment, which is the effective rate that you expect for 'twenty 'twenty four in that segment.
Speaker Change: Okay.
Stefan Hamill: Hi, Stephanie.
Stefan Hamill: This is milena Lopez important to highlight a couple of topics in terms of taxes first November we had the the constitutional.
Milena Lopez: The court said that yes, the cost of regularly our royalties are deductible from taxes. Although wise. This would had an increment payment of 1.6 million pesos in taxes throughout that 2023.
Ricardo ROA: We see it towards the 2930 with 800-830 barrels of production date. That's the analysis we've done internally in the analysis of our strategy in the macro numbers for this strategy. And of course, in what you say about dividends, yes, we already mentioned that this year, it's not going, we are not going to apply what we did last year, we are not going to make an accounting crossing account between the debt we have that we had with the subsidies of 2022 with the government, crossing with the risk of what the nation paid. So because of that previous time, we could leverage our investment plan and the cost related to the operation, but we are not going to do that this year. And the last point, I'll give the floor to Milena so she can clarify. But I think that she has already mentioned the methodology.
Milena Lopez: Since the this is given in the third quarter that quarter, we need to.
Milena Lopez: To remove the.
Milena Lopez: Savings of taxes, we had during the year. So we have a favorable taxes to say it somehow one three trillion pesos.
Milena Lopez: Because we reversed it in the fourth quarter. So this is this is something that we see in the fourth quarter that affect the specific rate of that quarter. Additionally, through the year, we were making provisions.
Milena Lopez: Assuming an over rate of 15% now we have the decree that ends the applicable over rate and 22023 due to the average of the price of the price Brett we are in the cargo that implies an over rate of 10%. So yes, we need Jamaica River rivers that tax.
Milena Lopez: As we said before, dividends are a payout of 67%. Corresponding to a dividend of 12.83 pesos, 11.3 are to the majority shareholder, which is the nation, and 1.5 to the minority shareholders. So dividends are for the nation. They can be paid up to December 31st.
Milena Lopez: Says that we had cost during the year of 800.
Milena Lopez: $1 billion something that you can see on the fourth Q. So the effective rate that you'll see if you calculated every quarter in the fourth Q. It is impacted by these two topics, while we see that numbers E. On the whole year Ecopetrol has had an effective tax.
Milena Lopez: So we will pay the nation after. Payments that we will receive quarterly. So we have no more questions. Sponsored ADR, Chat questions, Estefania Mosqueda from Credit Corp Capital asked. Can we give more details about the tax movement in the option before impairment, which is the effective rate that you expect for 2024 in that segment? Hi, Estefania. This is Milena Lopez.
Milena Lopez: Tax rate of 36.6%, which.
Milena Lopez: Differentiates from what we had in 2022 of 31% and that main impact here is the effect of the tax reform that impacts for the first time in 2023 I have no if beef it makes the fourth Q and tax.
Milena Lopez: It is important to highlight a couple of topics in terms of taxes. First, in November, we had the constitutional amendment. The cost of royalties is deductible from taxes.
Milena Lopez: Clears.
Milena Lopez: Bruno <unk> from Goldman Sachs ask where is that local diesel and gasoline price compared to the international.
Milena Lopez: Otherwise, this would have an increment payment of 1.6 million pesos in taxes throughout the year 2020. Since this is given in the third quarter, that quarter we need to remove the savings of taxes we had during the year. So we have a favorable tax rate to say it somehow 1.3 trillion pesos because we reversed it in the fourth quarter. So this is something that we see in the fourth quarter that affects the specific rate of the quarter. Additionally, through the year, we were making provisions assuming an over rate of 15%.
Bruno Montanari: Hi, Bruno Millennial domas.
So well.
Bruno Montanari: While we see the diesel prices and I'm going to talk specifically about the average of February to provide more updated information, where you'll have a diesel price of around 9000.
Millennial: 500 pesos when we look at that parity price. It is closer to 15000 pesos. So we have an effective subsidy of 63%.
Milena Lopez: Now we have the decree that ends the applicable over rate and doesn't do 2023 due to the average of the price of the price spread. We are in the quarter that implies an over rate of 10%. So yes, we need to make reverse the taxes that we had cost during the year of $800 billion, something that you can see in the fourth queue. So the effective rate that you see, if you calculated every quarter in the fourth queue, it is impacted by these two. When we look at the numbers for the whole year, Ecopetrol has an effective tax rate of 36.6%.
Millennial: Nevertheless, what we look at that gasoline prices in February we see a price.
Millennial: <unk> around 15700 pesos and the private the price as a little below this so in reality, what we see right now is a subsidy of around 2000 pesos of gasoline facing what we are lacking a diesel saw one side diesel we have a sub.
Millennial: <unk> are non gasoline, we have we're a little bit above which help us to.
Millennial: Okay.
Millennial: Improve our deficit and with a fair bet questions well edited border here to highlight not only that we're going to have a lower.
Milena Lopez: Which differentiates from what we had in 2022 of 31%. And the main impact here is the effect of the tax reform that will impact for the first time in 2023. I don't know if this makes the fourth to tax Cleared, Bruno from Golden Sacks asks, where is the local diesel and gasoline price compared to the international price? Hi Bruno, Milena Loma. So, where do we see?
Millennial: Monthly accumulation of fed back due to the increase of gasoline price that the national government did last year, but this reduction in the market prices will lead us to that if we project what.
Millennial: Deficit of the.
Prices for 2024, it gives us something around three and four point trillion pesos of course. These changes according to the exchange rate and that differentials, but in effect. We see that there is are no movement in diesel price, which is not the base scenario we hope.
Milena Lopez: The diesel prices, I'm going to talk specifically about the average of February to provide more updated information. We have a diesel price of around $9,000. When we look at the parity price, it is closer to 15,000 pesos. So we have an effective subsidy of 63%. Nevertheless, when we look at the gasoline prices in February, we see a price of around 15,700 pesos, and the parity price is a little below
That we have some adjustments we see.
Milena Lopez: So in reality, what we see right now is a subsidy of around 2,000 pesos for gasoline. Facing what we are lacking in diesel. So on the one hand, diesel we have a subsidy, and on gasoline, we have we are a little bit above which helps us to calculate the Sponsored ADR. Sponsored ADR And with the FPEG questions, well, it is important here to highlight not only that we're going to have a lower monthly accumulation of FPEG due to the increase in gasoline prices that the national government did last year, but that this reduction in market prices Of course, this changes according to that change rate and the differentials.
Millennial: At the end of the year a deficit of due to capex that will be inferior to what we've seen in the last two years, which is a great news for the company and for the and the position of Ecopetrol.
Speaker Change: <unk> has two questions first one.
Speaker Change: Do you have any update or expectation about that no deductibility of royalties for March two.
Speaker Change: Due to the Supreme Court and second.
Speaker Change: Could we see an extraordinary dividend greater two what we a this year to help that the physical that tax deficit.
Speaker Change: Thank you better for your questions Milena Lopez again, yes, so about the constitutional court in November we had the rollout that says that that royalty places are deductible tax deductible at the beginning of the year that ministry of.
Milena Lopez: But in effect, we see that there are no movements in diesel prices, which is not the base scenario. We hope that we have made some adjustments. We can see that. At the end of the year, a deficit due to FIPEG that will be inferior to what we've seen in the last two years, which is great news for the company and for the position of Ecopetrol. Badr has two questions. Do you have an update or expectation about the no deductibility of royalties for March? Due to the Supreme Court and second,
Speaker Change:
Speaker Change: Said.
Speaker Change: And incident of impact.
Speaker Change: Of tax impact.
Speaker Change: And the Ministry of Treasury has a time.
Speaker Change: That would be like this regard metric to radical in the court.
Milena Lopez: Could we see an extraordinary dividend greater than what we got this year to help that fiscal that tax deficit? Thank you, Badr, for your questions. Milena Lopez again.
Speaker Change: So is the addition of that of such <unk>.
Speaker Change: <unk> impact once the court receives this.
Speaker Change: They will.
Speaker Change: Except that incident discuss it and during that period of time, they will be have a.
Milena Lopez: Yes. So about the Constitutional Court in November, we had the rule out that says that royalty prices are deductible, tax deductible. At the beginning of the year, the Ministry of, Sponsored ADR, An incident of impact, of Tax Impact, and the Ministry of Treasury has a time, that will be like this week or next week, to eradicate in court, the Sustentation of that, of such Tax Impact. Once the court receives this, they will accept the incident, discuss it, and during that period of time, they will have an answer.
Speaker Change: And answer so the important thing here is at the time the court decides to revise and accept that it tax impact incident, too we will suspend def.
And we will have to wait for final.
Speaker Change:
Speaker Change: Ruling and goodbye to all we will accept what the court says so right now we don't have additional information.
Speaker Change: Second question about extraordinary dividend now up until the day, we have discussed with the.
Milena Lopez: So the important thing here is that at the time the court decides to revise and accept that there is a tax impact incident, we will suspend that, And we will have to wait for our final ruling. And in Ecopetrol, we will accept what the court says. So right now, we don't have any additional information. Second question about the extraordinary dividend. Now, up to the date, we haven't discussed this with the Treasury or Ministry about this, except for the payout of 67% which is the amount of the payout which is taken to the shareholders. Congratulations on the results and milestones about the possibility of doing businesses with PDVSA. How much have you advanced in that option?
Speaker Change: At Treasury M.
Speaker Change: Ministry.
Speaker Change: About this except the payout of <unk> of <unk>, 67%, which is of payout which is taken too though.
Speaker Change:
Speaker Change: Shareholders' meeting.
Speaker Change: Congratulations for the results and Smile stones about the possibility of making businesses with blue racer, how much have you advanced in that option.
Speaker Change: Yes.
Speaker Change: Thank you Walter and yen.
Speaker Change: We gather a precedent.
Speaker Change: The evaluation that we're doing internally.
Speaker Change: The possibility of making businesses with better I'd say the short term.
Speaker Change: Our focus on the contract that has been constantly reactivated since 2007.
Ricardo ROA: Thank you, Jose Daniel. Ricardo Roa, President The evaluations that we're doing internally. The Possibility of Making Businesses with PDVSA in the Short Term Our focus is on the contract, which has been constantly reactivated since 2007, till 2027 between PDVSA and Ecopetrol, where we say that we can transfer. So the interaction that we've had in the last month with PDVSA, gas as owner of the transportation, asset transportation, gas transportation is, to work hand-in-hand inspecting and revising the conditions, of maintaining their commitment that we have to activate action to support any emergency in the context of production exploration. So,
Till 'twenty 'twenty seven between Paris and Ecopetrol.
Speaker Change: Well, we say that we can transfer.
Speaker Change: Yeah.
So the interaction that we've had in the last months with better visa gas as owner of the transportation asset transportation Gastro expectation is.
Speaker Change: Two.
Speaker Change: Work heavy hand, inspecting and revising the conditions.
Of.
Speaker Change: Maintaining that commitment.
Speaker Change: We have to activate actions.
Speaker Change: To support any emergency in the context of that production exploration.
Speaker Change: So.
This is one of the options in four five which had four or five more that work.
Ricardo ROA: This is one of the options in four or five more that we're talking about in order to meet the demand that we will have. We have a deficit of 169 gigabytes.
Speaker Change: Talking about in order to.
Speaker Change: Attend the demand that we will have.
Speaker Change: We have a deficit of 169 gigabyte.
Alberto Consuegra: So, basically, we are among many options, evaluating the opportunity of working with these legal projects. And this will occur as we don't have any restrictions from FACT that would prevent these transactions. Manuela Rueda from Standard and Poor's asks, for 2024, what is the capacity you consider for the refineries and how does this affect gasoline imports to Colombia? Manuel Agdea, Alberto Consuegra.
Speaker Change: So basically we are.
Speaker Change: Among her many options evaluating the opportunity of working with these are legal.
Project and this will occur as we don't have any restrictions from fact that would avoid these transaction.
Speaker Change: Monroe elaborate out from standard and Poor's as for 2024, what is the capacity you consider for the refineries and how these effect that gasoline imports to Colombia.
Speaker Change: Manuel how good day Alberto Consuegra. Thank you for your question.
Alberto Consuegra: Thank you for your question. What are we seeing from the loads point of view in 2024, an average between 415 and 425,000 barrels? Particularly in the case of imports. Well, what is the core relationship in gasoline?
Manuel: What are we seeing from that loads point of viewing 'twenty 'twenty, four and average between 415 and 425000 barrels.
Manuel: Particularly in the case of imports.
Well what is that correlationship in gasoline well that production capacity of both refineries as are between 80 and 90000 barrels depending of the maintenance we have through the year.
Alberto Consuegra: Well, the production capacity of both refineries is between 80 and 90,000 barrels, depending on the maintenance we have through the year. And the imports are going to be between 40,000 and 50,000 barrels, around So, what do we see in the first month of this year? Well, a fall
Manuel: The imports are going to be between 40 and 50000 barrels.
Manuel: Round that so.
Manuel: What else do we see in the first two months of this year will all fall in imports.
Alberto Consuegra: Below that range of 45,000. Sparrows. This is good news. And, nevertheless, we need to await a reactivation of the demand. And this will depend on the behavior of gasoline prices, international gasoline prices.
Manuel: Below that range of 45000.
Manuel: Barrels. This is good news and nevertheless, we need to await for a reactivation of the demand and this will depend of the behavior of the gasoline prices international gasoline prices. So this is a variable we're managing right now and from the.
Alberto Consuegra: So this is a variable we're managing right now. And from the production point of view, we are safe with our, No more questions, so we give the floor to the president for the final. Thank you. Thank you again for your. Participation, please. Key, firm confidence in our company and our subsidiaries with this great team that's working with us who has shown very important leadership. Ecopetrol, in the margin of the critical conditions of the market situations, will keep working and will keep being responsible for consolidating and continuing to make Ecopetrol the great company it is, not only in Colombia but with an important participation in each of the economies of the countries we are present in. Thank you very much for your participation. Thank you.
Manuel: Production point of view, we are safe with our plan.
Speaker Change: No more questions. So we give the floor to the precedent for the final message.
Speaker Change: Thank you. Thank you again for your EM.
Speaker Change: Participation. Please.
Speaker Change: Keep.
Precedent: Firm confidence on our company and our subsidiaries with these great team that's working with US that has shown a very important leadership.
Precedent: It rolled up in the margin of the critical conditions of the market situations, we'll keep working and we will keep being responsible to consolidate and to continue to making ecopetrol. The great company. It all it is not only in Colombia, but with an important.
Precedent: Participation in each of the economies of the camp of the countries. We are present at thank you very much for your participation.
Unknown Executive: Transcription by ESO. Translation by — Transcription by ESO. Translation by —
Speaker Change: Thank you.
Speaker Change: [music].