How would you evaluate Ecopetrol’s performance in 2024?

Ecopetrol faced a challenging 2024 as refining margins declined from historic highs in 2022 and 2023. While the first quarter benefited from lingering strong margins, the remainder of the H1 2024 was affected by planned maintenance on several of the company’s 96 refining units, limiting the ability to capitalize on a sudden margin rebound driven by geopolitical tensions and low diesel inventories in the U.S.

As major turnarounds concluded in mid-June, the company was able to capture stronger margins, with June alone contributing approximately 40% of the segment’s EBITDA. If favorable conditions persist, Ecopetrol expects a significant recovery in refining profitability in the second half of 2025.

What developments would you highlight from Ecopetrol’s petrochemical segment?

Ecopetrol experienced a strong year in petrochemicals, with high production rates and favorable prices in aromatics and aliphatics, notably benzene, toluene and xylene. In contrast, plastics faced major challenges due to the US-China trade war, which flooded the market with ultra-cheap raw materials and finished products, severely impacting margins for polyethylene and polypropylene. However, Ecopetrol’s integrated model helped absorb these shocks. The company also strengthened its position in industrial products, especially asphalt, through expanded maritime logistics and increased output. Paraffin exports resumed, and base lubricants performed steadily.

What factors make Ecopetrol resilient again current global headwinds?

I would attribute Ecopetrol’s resilience to both its integrated business model and its organizational culture. As a fully integrated group with operations spanning exploration, production, refining, transportation and commercialization, the company can swiftly adapt to external shocks. Its commercial offices in Houston and Singapore have been instrumental in diversifying both client and supplier portfolios, reducing geopolitical risk and enhancing flexibility in product placement.

Ecopetrol sees industry cycles as inevitable and focuses on diversification and preparedness to weather downturns.

What updates can you share from the sustainable aviation fuel (SAF) project?

Ecopetrol has been advancing SAF development for over a decade through its Instituto Colombiano del Petróleo and energy transition division. In October 2024, it produced 260,000 barrels of co-processed diesel and 30,000 of co-processed jet fuel at the Cartagena refinery, using existing infrastructure with minimal modifications. A second test of 60,000 barrels is planned for 2025.

Ecopetrol aims to maintain SAF production in Cartagena and is evaluating a US$700 million investment in Barrancabermeja by 2028–2029. The focus is initially on domestic demand and regional use, while working toward international certification.

A key challenge for scaling SAF production is pricing. Falling SAF prices may support mass adoption, but they undermine investment potential. To ensure economic viability, regulatory support is needed, including tax and tariff incentives.

How else is Ecopetrol advancing sustainability?

Ecopetrol recently secured regulatory approval to blend biodiesel into marine diesel, marking a significant advance in Colombia’s biofuels strategy. Beginning at 2%, with plans to increase to 10%, the move builds on Colombia’s longstanding experience with biodiesel in road transport. It aims to enhance fuel quality and reduce emissions in maritime operations. Complementing this, Ecopetrol’s Board approved a US$1.2 billion investment to upgrade the Barrancabermeja refinery by 2031 to meet new sulfur regulations. The company is also progressing with carbon-compensated premium gasoline, SAF production, and renewable energy projects.

These initiatives support Colombia’s energy transition and leverage the country’s sustainable palm oil cultivation, which avoids deforestation and labor violations. Biofuels offer a strategic path toward cleaner energy while stimulating rural economic development.

What are your expectations for the year ahead?

Ecopetrol’s outlook for 2025 is cautiously optimistic amid local and geopolitical challenges. Crude production growth remains positive, supported by investments including the Permian Basin in the US. Commercial teams focus on maximizing value from this production. Refining faces strategic decisions to balance operational needs with profitability; planned maintenance is being rescheduled to avoid peak margin periods and extend equipment life without sacrificing returns.

This disciplined approach aims to meet financial targets set in late 2024 and deliver strong productivity and profitability by year-end. Additionally, Ecopetrol is diversifying its refining portfolio by expanding aromatic production in Barrancabermeja and exploring a reforming unit at Cartagena to add value to naphtha currently used as crude diluent. These initiatives support growth while optimizing asset utilization.