S&P maintains Ecopetrol's global credit rating at BB+

S&P Global Ratings affirmed Ecopetrol's global credit rating at BB+ with a negative outlook, but lowered the company's Stand Alone Credit Profile (SACP) from bbb- to bb+. The rating agency cited lower oil prices and exchange rate volatility impacting Ecopetrol's financial performance, estimating a debt/EBITDA ratio above 2.0; however, S&P positively noted the company's growth strategy, reserve replenishment efforts, and business diversification.

Analysis

S&P Global Ratings maintained Ecopetrol S.A.'s (NYSE: EC) global credit rating at BB+ with a persistent negative outlook, as of June 4, 2025, while concurrently lowering the company's Stand Alone Credit Profile (SACP) from bbb- to bb+. This SACP downgrade, influenced by lower oil prices and exchange rate volatility impacting Ecopetrol's recent financial performance, brings the individual rating to the same level as the company's overall rating. S&P projects Ecopetrol's debt/EBITDA ratio will remain above 2.0. Despite these challenges, the rating agency positively highlighted Ecopetrol's strategic focus on growth, reserve replenishment, and portfolio strengthening via business diversification and enhanced profitability margins. Ecopetrol, Colombia's largest company and a major integrated energy player in the Americas, continues to be significant in hydrocarbon production, transportation, refining, petrochemicals, and gas distribution domestically, alongside its international energy transmission and exploration activities. The moderately negative sentiment and cautious tone associated with this development underscore the financial pressures, even as strategic positives are acknowledged.

Key Decisions for Investors

• Monitor Ecopetrol's debt/EBITDA ratio closely, given S&P's expectation for it to exceed 2.0 and the sustained negative outlook.
• Closely track oil price movements and Colombian peso exchange rate volatility, as these significantly impact Ecopetrol's financial health.
• Evaluate the progress of Ecopetrol's strategic initiatives in growth, reserve replenishment, and diversification as potential mitigants to current financial pressures and drivers of future value.