National Oil Company Profile: Ecopetrol
Highlights
- Oil and gas production in Colombia, including Ecopetrol’s, has declined since 2013. At current production rates and without further discoveries, Ecopetrol will deplete its reserves in 2031. In 2022, the government stopped licensing exploration.
- Because of Ecopetrol’s production costs, 31 percent of its investment pipeline is unlikely to break even in a moderately paced energy transition scenario (20).
- Ecopetrol is a global leader in acknowledging and managing transition risks, setting targets to reduce emissions, and exploring low-carbon diversification strategies. The Colombian government recognizes the country’s dependence on oil revenues and the resulting economic risks, and Ecopetrol has made impact assessments of the climate-related risks to the organization’s business, strategy and financial planning.
See the accompanying guide for definitions of all variables and explanations of the terms used. Sources are referenced with a number in parentheses, e.g., (1), and listed at the end of the profile, together with the reference year. An explanation of the energy transition scenarios used is also at the end of the profile, preceding the references.
This profile was last updated in August 2024.
Key statistics
| Potential scope 3 emissions from reserves (proved, 1P) (1) | 237 Mt CO₂e |
| Home country income level (2) | Upper-middle income |
| Equitable phase-out responsibility (11) | By 2036 |
| Company transition risk: share of investment that does not break even in the moderate transition scenario (1, 20) | 31% |
| Government revenues from oil and gas at risk in the moderate transition scenario, as share of current oil and gas government revenue (8) | 84% |
| Current share of total government revenue from oil and gas (8) | 7% |
Company governance
Ecopetrol is an integrated group engaged in oil and gas exploration, production, refining and transport in addition to petrochemicals and energy transmission. It was founded in 1921 as Tropical Oil Company – Concesión De Mares and became Ecopetrol in 1951. It is majority owned by the Colombian government but partly privatized, and produces and explores in Brazil, Colombia, Peru and the U.S. Permian Basin.
Ecopetrol’s CEO is Ricardo Roa (since 2023). The company board consists of nine directors, of whom the minority shareholders appoint one and the Colombian government appoints eight. A new director can be appointed to a seat on the board to replace one who has served two years. The Agencia Nacional de Hidrocarburos is the public institution in charge of administering licenses and collecting royalties from the national oil company (NOC) on behalf of the government.
Ecopetrol has the structure of a joint-stock company listed on two exchanges.
| Founded (5) | 1921 |
| Partially privatized (5) | 2006 |
| Listed on exchange (5) | NYSE and Bolsa de Valores de Colombia |
| Employment (3) | 18,903 |
| OPEC member country (15) | No |
| International exploration and production operations (5) | Brazil, Peru, U.S. |
| Subsidiaries (5) | 90 subsidiaries in 15 countries |
Ownership
| Government of Colombia | 88.49% |
| AFP Porvenir (private Colombian pension fund) | 1.75% |
| Administradora de Fondo de Pensiones y Cesantá Protección | 1.56% |
| Cititrust Colombia | 0.88% |
| BlackRock | 0.87% |
| Others | 6.45% |
Source: (5)
Environmental, social and governance performance
Ecopetrol has environmental, social and governance (ESG) indicators slightly below the regional average of all Latin American NOCs. However, its Resource Governance Index score (which measures the transparency and accountability of fossil fuel revenue management, value realization, and the quality of the wider enabling governance environment) is well above regional and global averages.
| Company | Country | ESG score (5) | Environmental score (5) | Social score (5) | Governance score (5) | Resource Governance Index score (15) |
| Ecopetrol | Colombia | 69 | 59 | 75 | 72 | 71 |
| Petrobras | Brazil | 75 | 62 | 90 | 68 | 71 |
| YPF | Argentina | 71 | 63 | 67 | 89 | 57 |
| Regional average | 72 | 61 | 77 | 76 | 59 | |
| Global average | 66 | 68 | 66 | 64 | 52 | |
Reserves and production
Ecopetrol’s oil production has followed a long-term decline since 2013. Despite a small reversal in the last three years, Rystad Energy expects this decline to continue, even in scenarios assuming the highest oil price (e.g., OPEC’s scenario). Ecopetrol, however, plans to stabilize its production at a level of 700–750 million barrels per day up to 2040 (13, p. 11). This would require new exploration, as current oil reserves will last for only seven years, and gas for six years, at current production rates.
Sources: (1, 3, NRGI visualization)
| Refining capacity (bpd) (14) | 400,000 |
| Pipeline capacity (bpd) | 1,430,000 |
| Oil reserves of NOC (proved, 1P) (million boe) (1) | 1,509 |
| Oil reserves of NOC as share of country reserves (1) | 74% |
| Years of oil reserves left at current production (1) | 7 |
| Gas reserves of NOC (million boe) (1) | 438 |
| Gas reserves of NOC as share of reserves of country (1) | 90% |
| Years of gas reserves left at current production (1) | 6 |
| NOC share in the country’s total oil production (3) | 61% |
| NOC share in the country’s total gas production (3) | 80% |
| NOC ownership share of the country’s oil reserves (3) | 93% |
Transition and other economic risks
Colombia’s public finances are becoming progressively less reliant on Ecopetrol’s transfers. Although revenues from oil and gas could fall significantly, up to 84 percent, in the moderate transition scenario, they make up a relatively small part of Colombia’s current government revenues, only around 7 percent.
Conversely, the country’s exports, and therefore its currency and trade balance, are heavily dependent on crude oil exports.
Economic dependence on fossil fuel revenues and exports
| Indicator | 2013–2017 | 2018–2022 |
| NOC transfers to government as share of total fiscal revenue (3, 1) | 8% | 7% |
| Crude oil export revenues as share of country’s export revenues (17, 19) | 30% | 23% |
| Gas export revenues as share of country’s export revenues (17, 19) | 0% | 0% |
Government revenues at risk in the transition
| Share of oil and gas revenue in total government revenue (8) | Government revenues from oil and gas in the moderate transition scenario, as share of current oil and gas government revenue (8) | |
| Colombia | 5% | 83% |
| Mexico | 7% | 90% |
| Suriname | 11% | 1% |
| Venezuela | 100% | 85% |
| Regional median | 27% | 70% |
| Global median | 44% | 56% |
Credit ratings
| Fitch (5) | Moody’s (5) | S&P (5) | |
| Colombia | BB+ | Baa2 | BB+ |
| Ecopetrol | BB+ | Ba1 | BB+ |
Ecopetrol financial performance
| Company | Country | Liquidity: current ratio (1, 3) | Efficiency and profits: return on capital employed (1, 3) | Indebtedness: leverage (1, 3) |
| Ecopetrol | Colombia | 31% | 20% | 44% |
| Petrobras | Brazil | 39% | 13% | 51% |
| Pemex | Mexico | 10% | 17% | 161% |
| Regional median | 22% | 19% | 44% | |
| Global median | 33% | 14% | 30% | |
Investment value at risk in different energy transition scenarios
Sources: (1, 20)
In the moderate transition scenario, 31 percent of Ecopetrol’s 2023 to 2032 investment pipeline does not break even. Ecopetrol’s pipeline is the third most exposed in the region.
Four projects comprise 93 percent of all the capital expenditure in Ecopetrol’s investment pipeline at high risk of not breaking even in a moderate-paced transition scenario. Just cancelling the continued investment in Rubiales, particularly in Rubiales-Piri, would remove almost all the transition risk from Ecopetrol’s portfolio. Yet without the ability to explore for more resources, expanding current projects like Rubiales is one of the few ways for Ecopetrol to continue producing (9).
Nevertheless, as of August 2024, Ecopetrol appears to have a strong financial position. While it is in the top quartile of NOCs across the world for leverage, this is the same as the regional median as shown in the table above.
Ecopetrol is a regional leader and in the top quartile in terms of acknowledging and managing the financial risks for oil and gas resulting from a possible domestic and/or global energy transition, according to the World Benchmarking Alliance (13).
The company itself has stated (12): “Transition risks pose an additional challenge for the Company, and its financial valuation, to determine the impact on the business strategy and to establish a resilience plan to be sustainable over time.”
In response, the NOC has set targets to reduce its scope 1, 2 and 3 emissions, and invests to increase efficiency, renewable energy, carbon capture, utilization and storage (CCUS), and nature-based solutions to achieve its decarbonization targets. It also is reskilling its employees.
Ecopetrol has also diversified by acquiring the electric transmission, road and telecommunication infrastructure company ISA from the Colombian government in 2022 (22). However, nationally, there has been no diversification, since the state already ultimately owned the assets that Ecopetrol bought. The NOC plans to increase its investments in its electric transmission business, as well as green hydrogen, CCUS and offshore wind projects to reach ~ USD1.7 billion (25 percent to 30 percent of total capex) annually by 2030, and currently around 20 percent of its investments go to decarbonization and non-hydrocarbon activities.
Despite Ecopetrol’s high exposure to transition risk, the company has not divested from high-cost upstream assets and continues to expand upstream developments.
Sources: (12, 13, 14)
Energy security
Colombia is self-sufficient in oil; however, it has only seven years left of reserves at current rates of production. It imports small but growing quantities of seaborne liquefied natural gas, as its gas reserves are declining. The country’s power system relies on hydropower for 78 percent of its electricity generation (4), with gas and coal plants covering peaks. There is almost no solar or wind power generated. Ecopetrol produces and refines most of the oil and gas Colombians use.
Ecopetrol runs multiple solar parks for its own consumption, as regulation bars it from generating electricity for the market. It is exploring offshore wind, with the goal of meeting its own energy demand, as well as green hydrogen and ammonia projects (21).
| Refining throughput of NOC as share of final country consumption of oil products (6) | 96% |
| Years of oil reserves left at current production (1) | 7 |
| Years of gas reserves left at current production (1) | 6 |
| Crude oil and refined oil products imports as share of national consumption of oil products (4) | 38% |
| Share of oil and gas in primary energy consumption of country (4) | 69% |
| Gas imports as share of country supply of gas (4) | 1% |
| Share of electricity production of country from renewables (4) | 78% |
Climate impacts and greenhouse gas emissions
Ecopetrol has relatively high scope 1 and 2 emissions per barrel, which it seeks to reduce through efficiency, renewable energy, CCUS and nature-based solutions. Its scope 1, 2 and 3 emissions intensity remained stable between 2018 and 2021 but is projected to increase until 2026 (23). The company participates in the Oil & Gas Decarbonization Charter (OGDC).
| NOC emissions reduction target, scope 3 emissions (14) | 50% by 2050 |
| Annual scope 1 and 2 emissions of NOC (5) | 13.73 Mt CO₂e |
| Annual scope 3 emissions of NOC in 2024 (3, 9) | N/A |
| Average GHG emitted before combustion per barrel of oil produced by companies in country (9) | 67 kg CO₂e/boe |
| Average GHG emitted before combustion per boe of gas produced by companies in country (9) | 87 kg CO₂e/boe |
| OGDC member company (21) | Yes |
| NOC net zero target, scope 1 and 2 emissions (5) | 2050 |
| Total potential emissions (scope 1–3) from reserves (1, 9) | 834 Mt CO₂e |
| Equitable phase-out responsibility of the country (11) | 2037 |
Energy transition scenarios
We use four energy transition scenarios:
Fast. We based this scenario on the oil and gas demand estimated in the International Energy Agency’s (IEA) Net Zero Emissions by 2050 Scenario, which maps out a transition pathway that would limit global warming to 1.5°C. This assumes large-scale negative emissions enabled by technologies such as carbon capture and storage.
Moderate. We based this scenario on the IEA’s Announced Pledges Scenario, which assumes the full and timely implementation of national energy and climate goals, including net zero emissions targets.
Slow. We based this scenario on the IEA’s Stated Policies Scenario, which assumes governments follow their current set of energy and climate policies.
Expansion. We based this scenario on the Organization of Petroleum Exporting Countries’ scenario, which assumes a continued expansion in demand up to 2045.
Sources
All data are from the latest year available as referenced in the relevant source as of August 2024. For most data this is 2024. Data related to emissions and NOC finances are from 2023 or in some cases 2022. Data on country-level oil and gas reserves and production, the ownership of oil and gas reserves, employment and energy security are from 2022. The Resource Governance Index score is from 2021. If you find an error in this profile, please email [email protected].
- Rystad Energy UCube, 2024 (proprietary data)
- World Bank, 2024
- NOC Database, 2023
- International Energy Agency (IEA), 2023
- S&P Global IQ, 2024 (proprietary data)
- Statistical Review of World Energy, 2024
- Euromonitor, 2023
- Carbon Tracker, 2023
- Fossil Fuel Registry, 2023
- Oil & Gas Decarbonization Charter (OGDC), 2024
- An Equitable Phase Out of Fossil Fuel Extraction (Equity Review), 2023
- Facing the Future (NRGI), 2023
- World Benchmarking Alliance, 2023
- U.S. Energy Information Administration, 2024
- Resource Governance Index (NRGI), 2021
- OPEC, 2024
- UN Comtrade, 2024
- Global Oil & Gas Exit List, 2024
- Riskier Bets, Smaller Pockets (NRGI), 2023
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