Ecopetrol S.A.

and operational results for the second quarter of 2023. There will be a question and answers session at the end of the presentation. Before we begin, it's 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 materialize. 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. CEO of Ecopetrol, Diana Escobar, Vice President of Sustainability Development, Jamie Baez, Vice President of Low Emissions Solutions, Alberto Consuegra, COO, and Jaime Caballero, CDO. Thank you for your attention. Mr. Roa, you may begin your conference.

Good morning, everyone, and welcome to the Ecopetrol Group's second quarter 2023 conference call. to present our operational and financial results. We appreciate your participation. First, I would like to highlight the dedication of our entire team, which has allowed us to achieve outstanding operating results in such a challenging market environment. Second quarter production averaged 728,000 barrels of oil equivalent per day with a yearly increase of 23,000 barrels versus the second quarter of 2022 and the highest quarterly figure in the last three years. This dynamism is a result of the strongest execution of our operation and increased production from strategic fields including Canyonsur and Rubiales in Colombia and Permian in the United States. These fields have played a crucial role in supporting our growth, allowing us to meet our production targets for the year today. In the second quarter of this year, we recorded revenues of $54.3 trillion EBITDA, of 14.6 trillion pesos and net incomes of 4.1 trillion pesos. These figures are consistent with the 2023 financial plan. These results are supported by, firstly, an enhanced operating performance through record in production, pumping lots, in some of our transportation systems and refining throughputs and clean fuel production loads in our refineries. Secondly, the exceptional results in Permian, Reficar, ISA and Ecopetrol trade in Asia. Thirdly, a positive impact of the exchange rate on sales and an efficient commercial strategy. During the second quarter, we reached the following significant strategy milestones. In May, we completed negotiations on the collective bargaining agreement for the next four years. Negotiations took place within a constructive and respectful dialogue with union organizations. finalizing with an agreement that will concurrently benefit our workers, the company, and the country. In June, the Refinería de Cartagena was notified of the International Arbitration Tribunal's decision regarding to the claim filed on the engineering procurement and construction contract for the expansion and modernization of the refinery. The arbitration process began through a request filed by Reficar in March 2016 and corroborated a contractual breach. The decision notified is subject to corrections, revisions and clarifications at the request of the parties. This same month, we ranked in the top spot of the Mercotalento Colombia 2023 ranking, the business monitor of corporate reputation, ratifying Ecopetrol as the best company for attracting and retaining talent in the country. This first half of 2023, we have added more than 23 trillion pesos in transfers to the nation, to taxes, royalties, and dividends, maintaining our firm contribution to national development. On the other hand, this quarter, the account receivable to the Fuel Price Stabilization Fund had the lowest average accrual since January 2022. Finally, I would like to highlight that the cumulative capex execution to the second quarter reached 12.3 billion pesos being the highest in half-yearly view in the last seven years, demonstrating our commitment to innovation and growth. Please continue the next slide. During the first half of the year, we faced a highly uncertain macroeconomic situation. The possibility of a recession in the developed world High interest rates and banking stress in the United States, together with the slowdown in the Chinese economy, have impacted the price of crude oil and refined products, introducing greater volatility to the market. Despite these challenges, we have excelled because of our company's operational resilience and adaptability. We have found opportunities within the current situation as OPEC could have focused on intermediate goods and USA strategy reserve purchase seek out grades similar to those we offer. We have been able to exploit the opportunities with our ongoing strategy at diversified markets and destinations, emphasizing the strategy position of our trading subsidiary in Singapore. Ecopetrol trade in Asia which has sold over 85 million barrels of crude oil in the Asian market. During this quarter, crude oil sales to the Asian continent represent 54% of our exports. Ecopetrol trade in Asia also successfully translated carbon neutral to cargoes in line with the company's TESG agenda. Its EBITDA for the second quarter of 2023 reached $62.5 million, an increase of 42% over the previous quarter. In addition, the active force of the Carbon Trade Index has allowed us to commercialize 10 million barrels of accumulated carbon offset crude oil as of last July. Also, the commercialization of asphalt with recycled plastic with an export level of 350 tons and the execution of five projects in Colombia has boosted the energy transition and circular economy in the region. All the commercial performance has allowed a strength in the differential of the crude oil basket, ensuring our positioning in the market. The Co-Petrol Group continues to action its all-inclusive strategy of efficiencies and competitiveness, allowing us to uphold the company's solid operating performance despite inflationary and market challenges. We are confident in our team's ability to meet the adversities and remain committed to sustainable growth and success in this dynamic business climate. I now give the floor to Diana Escobar, Vice President of Sustainable Development, who will update you on our progress in the company's social impact.

Thank you, Ricardo. Ecopetrol's commitment to generation of social value was evidenced during this quarter through advancements in the performance of our social and environmental investment plan, which in 2023 totals 766 billion pesos, a figure equal to nearly 5% of the comparable investment by the nation's general budget. I would like to underscore the most relevant achievements during this past quarter. We highlight the start of the second phase of the META Food Supply Network Program in partnership with the Food and Agriculture Organization of the United Nations. Over the next three years, This program should positively impact 3,000 farming families and 32 associations in the region, strengthening production chains and their commercial viability. Moreover, a cooperation agreement was defined with the national government and companies in the industry to pave 43 kilometers of the Puerto Gaitán to Rubiales Road, low located in the Department of Meta. With an investment of more than 240 billion pesos, this project will sponsor the agro-industrial, productive, and rural development of the Orinoquia region, enabling over 1 million hectares with agricultural development potential and generating a positive annual impact of over 2.5% on the regional GDP. We also emphasize the successful national summit of the Ecopetrol's Entrepreneurship Social Investment Program with the engagement of 1,576 entrepreneurs, micro and small enterprises from 45 municipalities that will receive benefits this year. In education, our school quality and retention programs have aided 641,000 students with which is 8% of the total enrollment in public educational institutions nationwide. Regarding the expansion of higher education coverage through the Eco Patrol graduate program this quarter, we awarded 94 new scholarship to students in rural areas, reaching a historical total of 1,761 beneficiaries to date in health care, Our mobile unit, Unidad Mobile, has assisted more than 6,500 people in seven municipalities of the Mid-Magdalena region with access to low-complexity health services, which is equal to 8% of the vulnerable population in this area. Regarding access to utilities, namely gas, water, and power supply, our social gas program certifies gas service connections for more than 5,200 new households in the departments of Atlantico, Santander, and Casanare. Concerning water supply, we highlighted the provision of 6.5 billion pesos for the construction of one public drinking water well that benefits more than 13,000 people from the Wayuu ethnic group, as a part of our commitment to provide water supply solutions in the Department of La Guajira. In access to electricity, we participated in a task force led by the Ministry of Mines and Energy, seeking to define a portfolio of initiatives that can develop into self-sustaining energy communities. Our social investment portfolio has been further strengthened with the allocation to the Ecopetrol Group of 27 new projects valued at 167 billion pesos through the Work for Taxes mechanism. Our business group has the highest participation in this mechanism, 37%. of the nationwide allocation. Finally, we would like to highlight the social dialogue processes carried out with the communities in our areas of interest. We conducted 13 dialogue processes involving more than 1,000 social actors nationwide for the participation of community action boards, academia, businesses, and local institutions. In addition, we launched the ethnic inclusiveness support program called Forming in diversity, training Wayuu and Pasto Siberia ethnic communities in La Guajira and Putumayo to strengthen their individual and organizational competencies. In this way, Through our business lines, we contribute to generate social value throughout the country, closing gaps and improving the quality of life for those most affected by social inequality. I will now turn the floor over to Jaime, who will present the key financial results for the second quarter.

Thank you, Diana. Ecopetrol recognizes that generating long-term value in a context of energy transition requires an integrated balance between the achievement of financial profitability goals and the delivery of our strategic goals. technology, environmental, social, and governance commitments with our stakeholders. Our performance dashboard shows significant progress in this regard. Technology, as the main accelerator of this strategy, generated benefits for close to more than 1 trillion pesos in the first half of 2023 through increased revenue generation, cost reduction, avoided costs, and productivity increases. On environment, The group, aware of the active role it must play in terms of climate change and energy transition, has made progress as follows. Regarding emissions reduction, during the first half of 2023, the group achieved an accumulated reduction of greenhouse gas emissions of 1.09 million tons of CO2 equivalents in Scopes 1 and 2, mainly in the upstream and downstream segments through different enablers such as fugitive emissions, venting, flaring optimization, energy efficiency programs, and the use of renewables. A cumulative reduction of 1.40 million tons of CO2 equivalents by 2023 with respect to the 2019 baseline is projected. On water, the following has been achieved. First, an average water withdrawal of 657,000 barrels of water per day for industrial use, well below the withdrawal limit of 724,000 barrels of water per day established for the operation. Second, a 49% reuse of fresh water withdrawal, achieving an overcompliance of 123% compared to the target set for the first semester of 2023. And third, a 29% reuse of production water affected by the pressure and injection flow systems in Andina Oriente and Orinoquia, but compensated by the good performance of the other two indicators. As part of the ambition to incorporate non-conventional and alternative energy sources for self-consumption and promotion of cleaner energies, the company plans to incorporate 400 MW by 2023. Currently, 208 megawatts are in operation and another 200 megawatts are under construction to deliver the set target. Regarding social matters, in addition to the milestones previously mentioned by Diana, the following stand out. The 4,298 non-oil jobs generated that contribute to diversification of local economies and the 55,659 students benefited through quality and educational coverage projects. In terms of governance, the company maintains a solid and transparent corporate governance with a level of independence of 78% of its board of directors and a 33% female representation. This guides the fulfilling of the company's strategy and is evaluated in indexes such as the Dow Jones Sustainability Index, where the Ecopetrol Group aims to maintain or improve the corporate governance rating obtained in 2022. Please move on to the next slide. During the first half of 2023, we achieved outstanding financial indicators amidst an environment of lower crude oil and refined product realization prices. Roche recorded its second best result since 2016 and closed the semester at 14.8%. above the target of 10% for the year and higher than the average of around 11% reported by peer companies to date. The impact of higher fiscal contributions and the increase in capital employed was partially offset by higher operating income in the last 12 months. EBITDA margin was 44.3%, mainly explained by the lower average Brent price compared to the first semester of 2022 and the lower cracks of refined products, diesel, gasoline, and jet, which was partially offset by the net effect on revenues and purchases associated to the higher average exchange rate. Likewise, there was an increase in activity costs and operating expenses associated with the increase in activity in terms of production, refinery throughputs, and transported volumes, as well as some inflationary effects. During the semester, the Co-Patrol Group recorded a higher EBITDA margin compared to its peer companies, which reported an average margin of around 34%. Regarding EBITDA by business line, a 78% contribution of hydrocarbons stands out, underpinned by the upstream and midstream segments. Transmission and toll roads contributed with 16% of the EBITDA, mainly associated to the results of the energy transmission segment. Finally, low emissions contributed with 6% of the EBITDA, explained by a higher gas contribution. The gross debt to EBITDA indicator remained stable at 1.6 times, below the target of 2.1 times for the year. The debt equity ratio was 1.1 times, primarily due to the higher financing US dollars acquired mainly by Ecopetrol SAA in the first half of the year. During the first half of 2023, the Co-Patrol Group generated an operating cash flow of 5.2 trillion pesos as a result of the solid operating performance and the positive effect of the average exchange rate, which offset lower realization prices and the inflationary effect on costs. Operating cash flow accounting for the balance of FEPEC, which I will explain in detail later, would be 18.2 trillion pesos at the end of the semester. Please move on to the next slide. In the first half of the year, Ecopetrol's organic investments amounted 12.3 trillion pesos, the highest half-year figure in the last seven years, 41% above what was executed in the first half of 2022, and in line with the target for 2023 of between 25.3 and 29.8 trillion pesos. This demonstrates the company's execution capacity in line with the target set out for the four pillars of the 2040 strategy, and contributes to our commitment to the economic growth of Colombia and the other countries where we operate. The hydrocarbons business line, as a strategic priority for the company and as an enabler of investments in the energy transition, closed the semester with a solid execution for 8.4 trillion pesos, which represents 69% of the group's investments. These investments were represented in growth projects throughout the integrated chain, both in Colombia and the United States. The investments in low-emission solutions and TESG closed at 1.5 trillion pesos, of which circa 1.3 trillion pesos were allocated to gas projects focused on assets located in the Pied de Monte and other exploratory blocks. In TESG, resources were allocated to decarbonization projects, efficient water management and operations, energy efficiency, fuel quality, and hydrogen. Investments in the transmission and toll roads business line amounted to 2.4 trillion pesos and corresponded to projects executed by ESA in energy transmission, toll roads, and telecommunications. These investments allowed progress in the construction of the electric circuit and in improvements aimed at increasing the reliability of the existing network. as well as in the Ruta del Loa, Ruta de la Araucanía, and Ruta de los Ríos road projects in Chile. Please move on to the next slide. At the end of the first half of 2023, Ecopetrol recorded a consolidated cash position of 13 trillion pesos, explained by First, an operating cash flow generation of 5.2 trillion pesos, mainly associated with higher sales volumes due to higher production, the solid performance of the midstream and downstream segments, as well as energy projects. This was partially offset by the increase in working capital, mainly due to the accumulation of the FEPEC account and the payment of income tax in some subsidiaries. Secondly, the outflow of investment resources for organic activities for 10.7 trillion pesos, mainly made by Ecopetrol and its subsidiaries Permian, ISA and CENIT. And thirdly, the outflow of resources for the payment of dividends for 2.6 trillion pesos to minority shareholders and subsidiaries. Regarding the management of debt maturities for 2023, At Ecopetrol, we continued to advance in the refinancing strategy, with which in June it carried out a partial disbursement of close to 693 billion pesos from the financing line with Banco Colombia, the prepayment of debt maturing in 2023 for $305 million, the issuing of bonds in the international capital markets for $1.5 billion, and and the launching of the repurchase offer for around $822 million plus interest for the prepayment of the remainder of the international bond issued in 2013, executed in August. As a result, the balance of maturities for 2023 at the end of August is close to $198 million, corresponding to principal installments of long-term debt. As for the average cost of debt, between the end of the first half of 2022 and the first half of 2023, the cost increased to an 8 basis point and closed at approximately 6.07%, which represents a highly controlled growth despite the generalized context of higher international interest rates. It is also noteworthy that despite the higher cost, average exchange rate, and indebtedness, the increase in financial expense between these periods was only 1%. reflecting the company's ability to manage its debt even in a challenging rate environment. The company does not expect a substantial increase in the cost of debt for the remainder of 2023. Regarding the FEPEC balance, the account receivable closed at 30.9 trillion pesos, reflecting an accumulation of 13 trillion pesos during the semester. Likewise, compensation was made without transfer of resources between the balance receivable from the FEPEC account and the dividends in favor of donation for 8.4 trillion pesos, leaving an amount of 13.2 trillion pesos pending for compensation. It is important to mention that thanks to the adjustments in the price of gasoline and the price environment, the monthly accumulation of the FEPEC has been decreasing and is expected to be below 1 trillion pesos per month in the second half of the year. Finally, it is important to reiterate that the financial priorities of the Ecopetrol Group continue to be the value generation through the delivery of the investment plan, proactive and competitive debt management, and the distribution of dividends as cash conditions allow. I will now pass the floor to Jamie Baez, who will give us more details about the Low Emissions Solutions business line.

Thanks, Jaime. In the first half of the year, the gas and LPG production reached 160,000 of equivalent oil barrels per day, 22% of the group's production mix. BaBusiness delivered an EBITDA of 2,142 billion pesos with an EBITDA margin of 47%. Our continued efforts to decarbonize our operations were blustered by the implementation of a wide range of initiatives and investment projects of low-emission solutions aiming to significantly contribute to our strategic objectives. I would like to highlight the reduction of layer gas from San Roque, Piscirama, and Aguas Blancas fields by the means of connecting them to the gas market to offer additional volumes of about 1,400 mbtu per day. This initiative allows us to reduce emissions of more than 36,000 tons of CO2 equivalent per year. We also were able to implement energy efficiency initiatives that led to reduced 5 gigawatt hour, 2 megawatts of consumption, equivalent to the electricity consumption of 16,000 pounds, and another 110 gigabitu. of thermal energy. Energy management, operational control, and the use of flaring and bending of gas for self-generation of energy resulted in the loss of the EU. We continue to work on sustainable mobility during the second quarter of 2023. First, we started to deliver financial support to natural gas vehicles with the gas truck program. a fund of 730 billion pesos, That includes an endowment by Ecopetrol. Second, our subsidiary Essentia renewed its transportation fleet with 40 gas-powered brand-new trucks in its operations. And finally, we delivered the first hydrogen refilling to the public transportation bus in Bogotá for commissioning tests with the support of SEMI and HDB2. It is estimated that all these initiatives in sustainable mobility will achieve a reduction of more than 570 tons of CO2 per year. I will give some further remarks on Ecopetrol's efforts to improve the well-being of the Colombian people. To date, The program to connect vulnerable communities to the natural gas grid has delivered 4,843 connections, positively impacting families in rural areas of the Guajira and Arauca. CENIT, OCOI, Alcanos and Surgas have been the main vehicles to meet the target. We also signed new agreements that will allow us to expand the program coverage to connect another 4,000 families in 2023. In addition, we extended the microalgae plant operations in Buenaventura until November. providing reliability of gas supply to 37,000 families in this area. The company has done a significant amount of work to enrich its renewable energy portfolio. To that end, new technologies have been introduced to our opportunity funnel, such as biomass, geothermal, and small-scale hydros. The operation of RISA's Castilla and San Fernando solar farms, as well as the Cantayu small hydroelectric plant, have allowed us to reduce 5,883 tons of CO2 equivalent and save 6,915 million pesos in the second quarter of 2023. We are also making progress in the construction of new photovoltaic capacity In Cartagena, 23 megawatts. La Sierra, 56 megawatts, Copen, Ayacucho, and Basconia solar farms with 15 megawatts, and Caucasia with other 7 megawatts, which will contribute to the incorporation of 101 megawatts to our renewable energy matrix by the end of 2022. Finally, last June, we held the Energy Transition Forum. For three days, more than 3,000 people, including Ecopetrol's employees, international and local leaders and experts, gathered to share knowledge of the national and global context, industry experience, technological trends, and challenges of the energy transition. We continue to leverage the consolidation of the architecture for the business line playing in the strategic pillar of cutting-edge knowledge, a key theme for our 2040 strategy, Energy That Transponds. I will now pass the floor to Alberto, who will talk about the main operational milestones.

Thank you, Jamie. Progress in the 2023 exploratory campaign reached 40% by the end of the semester. As we completed the drilling of 10 exploratory wells, seven of which have hydrocarbon potential and are located in the Llanos Orientales, two having gas condensate potential in the Piedemonte foothills, and one with natural gas potential in northern Colombia, in Cordoba. For this quarter, I would like to highlight the announcement we made about the success of the TINAMU-1 exploratory well operated by Ecopetrol, located in Castilla-La Nueva in the Department of Meta, confirming the presence of 16 degrees API heavy crude oil. Extensive testing is planned to begin in the third quarter of 2023. We made important progress in the assessment of onshore discoveries. In northern Colombia, in the Arrecife area, early production connection of the Coralino 1 and Arrecife Norte discoveries to the existing infrastructure is underway. Extensive testing is expected to begin by the end of 2023 for potential commerciality in 2024. With regards to the Flamenco's discovery located in the mid-Mardalena Valley, the Flamenco's one is now commercially viable and the production license is expected to be awarded during the second half of 2023 in order to proceed with the extension of commerciality for Flamenco's 2 and 3 wells. Finally, extensive tests are being carried out in the Upper Magdalena Valley on the El Niño 1 and Ibamaca 2 wells, and in CPOO 9 on the Hon Juan and Lorito wells. Progress in offshore exploration activity in Colombia includes assessing the results of the Gorgon 2 appraisal well and the drilling of the Glaucus 1 well in the same area. which is expected to reach total depth in the second half of this year. In addition, we continued with pre-drilling activities of the Orca Norte 1 well as part of the appraisal process of the Orca Discovery and with the planning of the appraisal campaign of the Uchuba Discovery to start in 2024. As part of the ongoing consultation with government agencies, mediation agreements were signed with the National Hydrocarbon Agency, ANH, and the Agencia Nacional de Defensa Jurídica del Estado, National State Legal Defense Agency concerning controversies regarding the exploration and production agreements for the Farallones and Magangue areas. Let's go to the next slide, please. During the second quarter of this year, we achieved production of 728,000 barrels of oil equivalent per day. up 3.3% versus the same quarter of 2022, driven by a solid performance of Rubiales and positive results of the drilling campaigns at Cañosur and Permian. These results were obtained despite the negative production impacts of around 6,400 barrels of oil equivalent per day, during the second quarter of the year due to social unrest issues, including the Capacho's field closures, as well as load restrictions and the temporary shutdown of the gas plant in Gibraltar due to attacks to the Caño Limón-Coveñas pipeline. We continue to make progress in decarbonizing our upstream segment. During the first half of the year, we highlight the development of projects that will eliminate venting emissions at the Castilla and Dina Cretaceous production facilities, in line with our commitment to reduce methane emissions by 2045. During this period, the upstream segment succeeded in reducing 141,000 tons of CO2 equivalent emissions, figure which is above expectations for the semester. Let's go to the next slide, please. After three years of the start of operations in Permian, the joint venture between Ecopetrol and Oxy reached a record production at the end of May of 100,000 barrels of oil equivalent per day before royalties, with approximately 62,000 barrels of oil equivalent per day corresponding to Ecopetrol's participation. In addition to the production in the Midland Basin, we highlight the start of production in the Delaware area after drilling and completing the first 19 wells. During the second quarter of 2023, we drilled 22 new wells, totaling now 279 wells and reaching a net production for Ecopetrol before royalties of 58,700 barrels of oil equivalent per day. By the end of the year, more than 110 wells are expected to be drilled and production should reach an annual average daily production in the range of 62,000 to 64,000 barrels of oil equivalent per day before royalties for ecopetrol. On the TESG front, Permian assets maintain low carbon intensity based on zero routing flurries. methane monitoring continues at production facilities along with other practices such as tankless storage facilities to reduce emissions at the source. Please continue to the next slide. For the midstream segment, transported volumes increased year on year by nearly 20,000 barrels per day, primarily as a result of higher crude oil production in the Janus region greater availability of both refineries, as well as operational optimizations in the refined product transport systems. So far this year, 10 reversal cycles have been carried out in the Bicentenario pipeline, ensuring the evacuation of production from the Caño Limón field. Likewise, An alternative route was implemented to evacuate condensed crude from Gibraltar and unload it in Ayacucho Station as a heavy crude diluent, the bottleneck in production of approximately 30 million cubic feet of gas in the Gibraltar field. During the second quarter, Svenit continued to perform a cabotage operation from the Buenaventura Maritime Terminal to the Tumaco Terminal. supplying part of the demand of products in this region of the country affected by restrictions on the Pan American Highway. In line with our TESG strategy, after three years of work led by OSENSA in partnership with Oleoducto de los Llanos Orientales , Oleoducto Bicentenario de Colombia and other regional entities, we highlight the completion of the Vida Manglar project, which restored and rehabilitated 39.2 hectares of mangroves in the Cispata Bay in Cordoba, contributing to the natural regeneration of the area. Finally, the Ministry of Mines and Energy, through the issuance of Resolution 279 of 2023, temporarily suspended the updating of crude oil transport tariffs that takes place in July of each year. Therefore, the current tariffs will remain in force until the tariffs for the following period are set in accordance with the terms established by the regulator. Let's continue with the next slide, please. In the downstream segment, the Cartagena Refinery achieved a record quarterly throughput of 209,000 barrels per day, thanks to the continuous operation of the Cartagena Crude Oil Plant Interconnection Project by its acronym in Spanish, as well as the high operational availability of the plants. During the quarter, we reached an integrated throughput of 427,800 barrels per day, a 17% increase versus the same period in 2022. In line with our commitment to contribute to the improvement of air quality in Colombia and deliver cleaner fuels, We stand out the record production of diesel, gasoline, and jet fuel for local supply in compliance with Resolution 4103 that establishes the fuel sulfur content limits for Colombia. In 2Q2023, we reached an integrated refining gross margin of $14.4 per barrel as a result of higher refinery throughput with plant availability levels surpassing 96%. Compared to 1Q2023, the margin was mainly affected by a contraction in global demand reflected in lower diesel and jet fuel prices and higher crude oil prices. By the end of the year, margins are expected to remain at the double-digit level. In addition, scheduled maintenance will be carried out at both refineries during the second half of the year, ensuring the reliability and integrity of our operations. During the quarter, we made progress in achieving various milestones of which I would like to emphasize. Start maturation of the project to produce sustainable aviation fuels. and renewable diesel in the Barranca Bermeja refinery contributing to decarbonizing the aviation sector. The startup of the electrolyzer project in Essentia that aims to generate hydrogen from water using solar panels as an energy source to partially cover the operation's self-consumption. The execution of the 5G technology pilot test at the Barranca Bermeja refinery with the aim of implementing industrial technology solutions in the operation, which will enable efficiencies in maintenance and operation processes. We continue to advance on the zero-fuel oil path, initiating production of AC30 quality asphalt at the Barranca Bermeja Refinery, thus opening up new market opportunities. Let's move on the next slide, please. During the first half of the year, efficiencies of 1.6 trillion pesos were achieved, of which 1.1 trillion pesos contributed to mitigate the inflationary effects that continue to impact the group's costs and expenses. On this front, I would like to highlight the multiple initiatives that have allowed us to optimize dilution and evacuation costs of heavy and extra heavy crude oil. the implementation of production strategies that have contributed to reducing lifting costs, as well as energy efficiency strategies with the use of technology solutions and self-generation. Lifting costs as of June 2023 amounted to $9.41 per barrel, a year-on-year increase of $0.13 per barrel, mainly attributed to inflationary effects on energy tariffs, well services, and chemical treatment, whose impact was mitigated due to achieved efficiencies of $0.24 per barrel. Refining cash costs decreased by 14% compared to the first half of 2022, explained by increased throughput and exchange rate variance, offsetting higher costs from greater operating activity and inflationary effects. The cost per barrel transported as of June 2023 was $2.76 per barrel, which remained stable versus the same period of 2022. primarily due to the aggregate effect of higher operating costs, a greater average devaluation of the peso against the U.S. dollar, and additional volume transported. The total unit cost as of June 2023 reached $45.6 per barrel, a 14.7% decline compared to the same period of the previous year. mainly resulting from the effect of a higher exchange rate and an increase in traded volumes. It should be noted that there was a $700 per dollar year-on-year increase in the average exchange rate in this period, which resulted in an impact of approximately $340 billion in operating costs and expenses. I now give the floor back to our CEO, Ricardo Roa.

Thank you, Alberto. The transmission and toll road business line generated positive operations and financial results in the first half of the year. These results were primarily sustained by the energy business in Brazil and Colombia and toll roads in Chile. This echoed in a 10% contribution by the business line to the group's revenues, a 16% input to EBITDA, and 8% participation in net incomes for the first half of the year. The most relevant milestones for the quarter include the allocation of two lots awarded in the energy transmission auctioned by the Brazilian National Electric Energy Agency, as well as six extensions in Brazil and one connection in Colombia. Startup of the ULME07 2017 Sabana Larga Bolívar project, an inception of the smart valves operation in the Santa Marta substation, favoring reliability and the connection of renewable energies. These projects will represent additional revenues of $10 million. ESA continues advising in the construction of 54 energy transmission projects, which represent the addition of over 4,825 kilometers of transmission lines to the network and will generate revenues of approximately $260 million when they enter into operation. Finally, progress continues in the execution of additional works in the Ruta de los Ríos and Ruta de la Araucanilla concessions, which will generate new revenues and extend the terms of these concessions. I would like to highlight that in this first half of 2023, The Ecopetrol Group demonstrates exceptional resilience and solid operational capabilities within a challenging landscape. This was achieved through hard work and dedication, as well as years of effort and commitment by every member of our organization, through the devotion of our team worldwide and the productivity to recognize strategic opportunities, we continue to ensure sustainable growth with a historical execution of the investment plan. In Colombia, from the production fields in the Llanos Orientales to the offshore stations in the Caribbean and globally from Chile through our transmission and toll routes business line to our trading company in singapore we will continue to focus on delivering operational excellence innovation and commitment to the energy transition with great enthusiasm we invite you to celebrate with us in september the 15th anniversary of our listing on the new york stock exchange We will hold an event to share our achievements, financial results, and prospects on the path to our 2040 strategy. Finally, I wish to thank all our employees and investor partners for their continued support and to all of you who participated in this conference today. Thank you for your time.

I know open the floor for the questions. Thank you.

We will start now our Q&A session. If you want to ask your question, please write in the chat, number one, and follow the instructions. We thank you for a maximum of two questions so that we can have room for other questions. Our first question comes from Andres Cardona from TD Bank. He's in line with the question. Mr. Cardona, the floor is yours. good morning thank you for this opportunity i have two questions the first one is with respect to the beta margin in the downstream segment i understand there is an impairment because of the essential results and the reduced margins of petrochemicals but i would like to understand If there are non-recurrent events, perhaps clauses for revaluation of inventories that would explain this impairment of the segment. And second, my question is if you have estimated the present value of the indemnity for Reficat and if you could give us the perspective of the company regarding the possibility to recover these resources because it has been published in the media and also in the leaving of the Minister of Mines is there any possibility of waiting for new auctions for oil fields in Colombia?

Thank you. Andres, good morning. Thank you for your question.

With respect to the first one, about the effect on the EBITDA and the downstream effect and inventories, I would say that in Essentia we had an inventory effect and accumulation in the first months of the year with a drop in the second Q, and at large the effect on inventories of Essentia amounted to $5 million. Talking about the refineries, the inventory effect we've had cumulative in the first half of the year has been positive. In the case of Barranca, we had an accumulation of volumetric inventory because of a drop in the demand. But in general, both Cartagena and Barranca have had positive inventories. In the whole downstream segment, to give you an idea of it, cumulative inventory between cartagena station barranca was 27 million dollars positive vis-a-vis and evita of one thousand twenty million dollars so the inventory effect in the first semester i would say is positive and of less than three percent as compared with evita

We haven't had any adjustments or one-time adjustments.

Jaime, you may complement this. Yeah, thank you, Walter. Yes, Andres, with respect to the downstream, I don't have much to add to what Walter said. We don't have any exceptional material issues in the second quarter. and what you have seen in terms of margin is just a reflection of the change in the environment conditions but still the down margins are still very appealing and competitive also So I would say that, and with respect to your question about Reficar, as it is a public knowledge, in early June, we received the news of the favorable ruling for the refinery in the dispute with CBI. Today, the owner is McDermott. and this gives rise to a potential expectation of recovery in the future the steps to follow are first that the ruling is made firm this is something we will be expecting by the end of the year and once we have a firm ruling we will be able to formalize a number of procedures for the recovery of those sums with the counterpart to the extent that the strategy for recovery and the dialogue with the counterparty shed light on the amount timing matters of this recovery we will be adjusting the financial statements to reflect that expectation in an educated manner that's what i can say now thank you Andres, and the last question. With respect to the leaving of the Ministry of Mines and Energy, is there a possibility for new routes for awarding areas for exploration and search for gas and oil? And I should mention that this continues to be a public policy of the government, or will it depend on the Ministry of Mines and Energy? and whoever is the head or leader of the ministry, and also the analysis and exercises to the implications of this in the macroeconomic aspect, and also with the participation of the Ministry of Finance and Public Credit. What we have been doing very rigorously is to participate in technical groups with representatives of these entities in order to show them what we have in respect of contracts that are enforced to undertake the search. and we have been making some announcements that are small but important and in that line we will continue working with the capital with the contracts that are enforced and obviously favoring the institutionality as to the macroeconomic relevance of the availability or not of those new contracts thank you ricardo and jaime Thank you to you all for your answers. Catherine Ortiz from Corredores da Vivienda. Mrs. Ortiz, you may ask.

Good morning to you all. Can you hear me? Good morning. I have two questions.

The first one is related to your opinion with respect to the mentions of the president of Colombia in respect of a .

Yes, I am in Spanish.

okay okay now you can ask thank you well good morning to you all i have two questions the first one is related to the announcement made by the president of the colombia with respect to the strategy and the role of Ecopetrol in terms of the development of unconventional projects. He mentioned it in Guajira. And in this regard, I would like to understand if, for example, Ecopetrol will try to absorb projects in this regard that had been abandoned by other companies because of the difficulties of making them viable due to their challenge with the communities or what is the plan of that role that the government has mentioned for Ecopetrol in the development of this project in this area, other areas of the country? And my second question is related to the fact that recently we became aware of a document that shows the guidelines of the roadmap for energy transition, and in that document, there is even a possibility that very soon we will be having to import gas as compared with the current ones. And when you think of the estimated reserves, they're quite different if you compare them with what Ecopetrol had shown in the 2020 plan. So I would like to know what is your opinion with respect to those figures and what is the alignment they have with the expectations of Ecopetrol. And if you could tell us if there have been any changes in these expectations with respect to the plan that we knew with respect to Ecopetrol's strategy.

Thank you. Thank you, Catherine, and welcome to this conference.

in the context of the possibility of eco patrol becoming an important actor in the development of power generation from unconventional sources of non-renewable energy we cannot ignore in particular the great potential that exist in this region of energy base and wind and solar radiation. Those potentialities are determined, and they also constitute one of the plans of Ecopetrol in its 2020-2040 roadmap. Insofar as based on this energy resources, it is possible to think about the development of energy in the transition that we have already mentioned, such as green hydrogen and methanol. So in this roadmap, we are foreseeing investment and potential for development and we cannot ignore them and they will be part of that cross-cutting access for economic decisions at ecopetrol which is called as capital discipline each of these opportunities will be developed as they are defined and studied thoroughly in a rigorous manner as part of the premises and tenets that have been planned and disseminated about this discipline. The timing and the opportunities for decisions on such investments will be part, obviously, of that roadmap and that portfolio that we are supposed to affect. Also, considering that not only as to the expectations of the government, but also with respect to the existence of new conditions in the legal platform derived from the derogation of some articles that prohibited the vertical integration of energy business in a company such as ESA. And second, in the issuance of emergency decrees were by the regulatory and legal spaces being open for Ecopetrol to be able to make investments in generation of renewable and conventional energy sources. With respect to your second question, I would like to pass the floor to Jamie by mentioning, of course, that this is a draft document. For comments and observations of the stakeholders, we have been participating in it and conducting our analysis. So I pass the floor now to Jamie. Thank you, Mr. President, and thank you, Katherine, for your question. The Ministry of Mines and Energy published recently this draft of the Roadmap for Energy Transition that gathers a very interesting diagnosis of the government since 2022 and part of 2023. with dialogues that have been conducted throughout the Colombian territory with benchmarks, thanks to the multilateral support we have received from different governments worldwide. And this concludes the analysis of scenarios that President Ross said will have comments until August 16th, before going specifically into the natural gas theme. I would like to share that the diagnosis highlights several points where we have full alignment between the government's vision and the strategy of ecopetrol in three areas. The first one, the relevancy in the renewable and conventional energy sources and the importance for the country that we continue on the road of developing this type of energy. Second, of course, we are aligned. as the document says, as to the relevance of natural gas in its fundamental role in energy transition, and I will talk further about that. And finally, the document recognizes something that is very important, and that is the importance of this transition being a gradual process. Having said that, with respect to gas, I will go back to something we mentioned in previous calls. about simplifying through three types of resources that we have in our portfolio. Reserves that have a very high probability of being developed and produced, the contingent resources that have more uncertainty, and then the prospective resources that have even more uncertainty. When you detail the scenarios that you mentioned in your question with respect to projections of gas in this roadmap of energy transition, while effectively only considering the reserves, it is evident that the reserves today are insufficient to have to meet all the demand for gas in the medium and long term. That's something that is in line with our figures, and that's the conclusion of this roadmap and the Ecopetrol strategic plan. It is essential to have development of the discoveries that we have announced recently. in the Caribe offshore basin, because that will enable us to develop the contingent resources, the resources to be discovered, and the prospective resources. In this regard, the roadmap shows that to be able to reverse that situation, we must continue investing in gas offshore. and as you will see the document the contingent resources that the government mentions are around 4.2 scoffs in the most likely scenario which is recognized as to see resources in the patrol numbers we are close to 3.9 for ctf so there's full alignment the government includes some volumes that are from the third party producers that are not part of the patrol group in addition to this contingent resources we have the prospective resources that as we said in the patrol amount to five tcf so this is uh subject in which we all recognize that we need to invest more in gas that the potential exists primarily in the caribbean offshore basin and that's why we are conducting such an important activity in this basin with this said the country needs to manage this uncertainty and the way to do that is through options because all these volumes have certain challenges for development and that's why the government and us are working on options to cover this possible gap that we could have in the short term through options of imported gas as technologies of micro lng or using the capacity of recastification that already exists in colombia other additional sources the name of the game is having optionality to make sure that colombians will have gas and for eco patrol to do it in a profitable manner thank you katherine and i hope this will help you understand the way we see right now the documents that have been published recently by the ministry thank you Thank you for your answers. The next question comes from Daniel Guardiola from BTG. The floor is yours. Thank you. Good morning, Ricardo, and hi. May I have a couple questions? The first one is about production of unconventional oil, considering that without any doubt that type of reservoir production has been one that has had good yields for Ecopetrol. And I would like to know if you could share with us What is the expectation of production for the close of the year and what is the cap that you plan to allocate for the next two years? That's my first question, but also I would like to know if you see any risk of interference by the Colombian government to change this development that's already planned for the production, basically the Permian basin. And my second question has to do with ESA. Recently there was a shareholders assembly where some modifications in the board of directors were made, and I would like to know if you are considering any changes in the management of ESA. Those are my two questions. Daniel, good morning. This is Alberto Consuegra. With respect to unconventional production, I can say that Permian continues to be a very profitable asset where we have all of our focus and expectations. Production for the first half of the year has been very good, and the perspective for the rest of the year is between 62,000 and 65,000 barrels of oil equivalent. The good news is that we continue with significant activity, and we hope we will end up with 110 drilled wells. where we already have wealth in delaware we already have additional activity in delaware in addition to midland so this will be about 1200 million dollars this year with the perspective of investment similar for next year so permian is a source of uh for focus for all of our focus and as we have stated it's a highly profitable asset with a bit of margins that exceed 70%. Danielle, with respect to your second question about the risk or interference on the businesses, that are part of Ecopetrol's portfolio at present. I have just come back from Permian. I attended a board of directors meeting where we met with a partner, and as I said, it's one of the more profitable businesses Ecopetrol has in its portfolio, and the expectation about the continuity of the development of this business with the partner is stable with very good feedback on the outcome so far achieved and obviously the decisions that are to be made at the time will be in line with what is legally and contractually established in that partnership for this project. And regarding your question about movements in ESA or any of the affiliates of the EcoPatrol group, or it's a decision of the president of a patrol and the board of directors and if any decisions are made about changes it will always be within the rigor and the corporate governance principles that are clearly established for such purpose both in isa and at the patrol group Thank you. The next question is from Andres Duarte from Corfe Colombiana.

Mr. Duarte? Okay. I have two questions.

The first one has to do with gas offshore and what has been said regarding the importance in the roadmap or the part that has been published so far in the last conference call i understood that what you were registering of offshore gas was viable at the current prices in the country not only at import price but at domestic prices. I would like to know what's still missing for you to build the infrastructure that is necessary to bring it and to register those reserves. I would like to understand what is the delay at this time for those additional considerations. and my second question is to ask also if you could update give us an update of the goals and objectives relative to the self-supply of electricity and hydrogen or hydrogen replacement let's call dirty hydrogen for green hydrogen in the industrial processes that you have and that question is related to as far as I know so far your objectives of having self-supply as a power and hybrid is to replace what you already are using and have. What I understand now from the precedent is that you would like to extend these lines beyond the fact of being self-sufficient or have self-supply. Sorry for the length of my questions. thank you for your question this is jamie weiss first the offshore gas and then we can preview the renewables that you were asking about with respect to offshore yes we insist that the potential that we have in the caribbean offshore is very important i already mentioned the volumes and as you mentioned, we have found that according to the estimate, this gas can be competitive at the domestic market prices. The combination of these two factors is what enables that all projects related to this basin with respect to gas are very well ranked for a capital allocation. To be able to move those resources which are either contingent or discovered to be delimited to reserves, there are two aspects. First, we need to carry out all the delimitation work. This is the process that allows us to understand what is exactly or to know with more certainty the volume that we have in each of these opportunities. All the delimitation works implies drilling of wells and building facilities. We have told you before that in the 2023 to 2025 plan, we have planned the drilling of seven offshore wells. this will be essential for the delimitation work and at this time we are completing one of the two wells that we have planned for 2023 that means that in some weeks we will be completing it and before the end of the year we will start the drilling of the second well that is an activity that will continue until we complete the seven wells in this three-year plan And in the second activity is infrastructure, understanding volumes. How are we going to take that gas to the coast? How are we going to treat it and process it? What is the transport system it will be connected to? And we have found fantastic synergies with the infrastructure that we already have at the facilities of that somehow are available. So that will allow us to expedite the work that we are foreseeing. Infrastructure and delimitation are crucial. And when we complete those two aspects, we will be able to pass this to reserve. all this activity of the wealth and the infrastructure of course requires environmental licensing processes consultation with the communities and at ecopetrol we're always committed to doing things well up front so we will do this calmly following processes but with a clear approach understanding what this means for ecopetrol and for the country and hopefully we're able to pass these volumes to reserve between 2025 and 2027 and to get them in an early stage so that by the end of the decade we will have full development of these volumes with respect to renewables i will go very rapidly on the way we see it With respect to hydrogen, in 2022, we close the year with an installed capacity of 208 megawatts of renewable energy, primarily solar. 99% is technology and 1% is more hydraulic plants. Our next goal is that by the end of the year, we will have 400 megawatts, as we had announced, and in 2025, we will have around 900 megawatts that will start operating in 2026. Of course, this is management of the portfolio that is continuous, as I told you before. This is one of our old projects. We already have 101 megawatts being built, different assets, but we're also working with partners and allies to bring 99 megawatts into the reality field 25 megawatts from biomass and several projects from small hydraulic plants. So, I think we're in the right path to the 400 megawatts. In the medium term, to the extent that we have been walking and understanding the opportunity of hydrogen for Ecopetrol and the country, it is evident that renewable and conventional energy will play a fundamental role. And that's why we have said that the 900 megawatts are just the beginning of the story for a hydrogen project that the refiners will work. Like the one we are very close to sanction, it will require 350 megawatts. A green hydrogen project will require at least one gigawatt. And for this line of hydrogen, the needs will be between 3 and 5 gigawatts by 2030. And in 2040, it will be above 9 or 10 megawatts. This, as you can see, has a magnitude in figures that is demanding the development of a capacity and an architecture in the co-patrol that is positioning us Sorry, I interrupt to have clarity. In those 900 megawatts by 2026 and what you're saying in magnitudes of gigas for purposes of hydrogen, please clarify at what point in both cases you are exceeding the requirement of self-supply because i think you consume those 900 in electricity where does it start going beyond the requirements of a patrol for hydrogen and to go to a phase of being able to export or to sell And with respect to hydrogen, also I would like to understand if that installed capacity, which is beyond what is required for cell supply as to power generation, if 100% of that additional installed capacity would be intended for the production of hydrogen, or is the sale contemplated for the national system? Well, to go to the point, at Ecopetrol we have an installed capacity for self-generation of 1,300 megawatts, primarily thermal. All the figures I'm giving you correspond to self-generating projects of non-conventional energy sources that will complement the portfolio that we have for self-generation. When we talk about self-generation, it's for the hydrocarbon business. in the upstream middle or down but also for a future production of hydrogen and derivatives like green ammonia or green hydrogen all is focused on self-generation for low emission supply and for the hydrocarbon business and our main objective in the medium term of course We evaluate permanently the profitability and competitiveness of these opportunities, and as the President mentioned, being out of that framework are things that will have to be reviewed. We are focused, and it is sufficiently material to build the facilities that are required To focus on this, we have tested different business cases, which are quite profitable options. And the replacement that we have of sources that are CO2 emission intensive with sources that will improve to reduce that emission with more friendly sources is our main focus.

The next question has from Bruno Montanari from Morganstown.

Good afternoon. Good morning. Thanks for taking my questions. I have two questions here. Can you talk a little bit about trends in oil production for the second half of the year? Maybe address where you see upside risks and downside risks, what the main challenges are for you to finish the year? according to the guidance, to the most recent guidance provided, please. And then the second question, it's very interesting to see you making a lot of advances on hydrogen with the actual operations. But can you give us some clarity or color on the level of returns you currently see on hydrogen operations or the expected returns? and how do they compare with the returns you are able to do on the hydrocarbon business? Thank you very much.

Bruno, good morning.

Thank you for your first question. I will answer the one related to production. My name is Alberto Consuegra, and I would like to tell you that we, maintain our production forecast the range that we have been giving you and by the end of the year it will be between 720 and 725 000 barrels hopefully clear to the upper range We, in the first half, have had the materialization of grids related to the environment. This trend could continue in the second half, but we will have scheduled maintenance in some of the production fields. This will not be substantial, but we must consider the impact in the plan. This is to tell you that we continue with the perspective of finishing in accordance with what we have planned the third quarter looks quite robust with respect to production but as i said there are factors that perhaps will not help us such as the planet the schedule shutdowns for maintenance and the environmental issues that continue to materialize thank you Bruno, thank you for your question. With respect to opportunities that we are managing in the hydrogen portfolio, I would like to share that we are focusing on those that enable us to have links that are more sophisticated in the volume chain. and that have synergy with the hydrocarbon business. That is what is allowing us to reach profitability rates that are appealing. And that means that they could exceed two-digit GDP in dollars. The most evident example that we have is the two projects that we have at the refineries. of Cartagena and refinery, as I have shared before. In this case, to give you the example, what we do is to build a facility to produce green hydrogen based on a non-conventional renewable source and hybrid is used primarily for processes that have more hybrid treatment at the refineries, thus producing fuels such as diesel and gasoline that are clean and have no sulfur, but also producing more sophisticated products, concretely green methanol. In Colombia, We are net importers of methanol, and it is used in industry processes. And we think that this could be replaced with a local product, but also with a product that is less CO2 intensive. When we combine all these pieces, in the business case, we are wasting, in fact, a tier that is competitive. the middle and long-term, the challenge for Ecopetrol and for all the companies that are working with white, green, and blue hydrogen worldwide to be able to have those profitability rates being the characteristic of the project. And then probably we'll be focusing on hydrogen for hydrocarbons and not for new markets. We are working on this every day, but we know this is a technological project in which we are committed to, and it is facing challenges that are not minor, but of course we are working hard on them because the capital discipline and the profitability parameters are very important for us, and we will continue doing so. And as far as the opportunities start to mature, i hope this has clarified your concern jamie i would like to add to give you a group of perspective i think jamie's answer is absolutely clear we're looking for competitive returns to digit return and we are following all the criteria of capital discipline for which we are known. This should be also seen within a more broader context. If you look at the allocation of capital, 70% of the company's capital is directed to the hydrocarbon business line, 20% to transmission and roads, So, we're talking about 10% allocation first. Second, as part of that 10% in our business line of low emissions, the predominant component is gas as to capital allocation. It will continue to be gas in the short and medium term. what we are talking about is some plans that in the context of the total allocation of a capital are measured calculated calibrated where we want to understand and make these business models viable and understand its long-term profitability and second I would like to mention that comparison with the hydrocarbon business, because as you very well know, the hydrocarbon business and its profitability is highly linked to the price cycle. One thing is when we are in the good times of prosperity and it's different when we have the opposite. And as history has shown, nobody can anticipate that entirely and what we have noted historically is that there is great volatility so for us in the context of hydrocarbon having returns and you know that we always look for sustainable returns over time of about 10 percent that's what we're looking for and in that line We see that the low-emission businesses can be competitive with those returns. This could be favorable and with less volatility. We will have to see how this evolves. And if we have the regulatory conditions, market conditions, execution, environment, that will enable those returns to become real that's the way we see we see this topic and third the structure of the capital that accompanies the project while in the hydrocarbon business given its long story and that the valley chains are quite mature and well established The general pattern of the capital structure is that the company contributes its cash flow 100% in many of the projects. And in these low-emission businesses, we see other schemes where partnerships are protagonists. The project finance is also protagonic as part of the structure of the project for several reasons. First, because given the maturity conditions of those value chains, we need those alliances for markets to materialize. And second, also because of the risk capital ratio. We are providing that risk capital and financial institutions that are willing to offer financial conditions that are more competitive than in the competitive area. To give you an example, while the capital cost of a hydrocarbon business, depending on the company, of course, could be close to 8% and 12%, depending on who's the player in these businesses, it could be as low as 4% or 7% or 8%. So, really, the issue here is to understand if we are able to generate profitability for the shareholders, that that differential of the profitability and the capital cost is something that we have seen so far. To the extent that those projects are sanctioned, we will be able to confirm that value proposal. That's the way we're approaching it. Thank you.

Perfect. Thank you.

Thank you for your answers. The next question comes from from UBS. You can ask now.

Hi, everyone. Thanks for taking my questions. My first question, historically, the company has been a solid dividend player, but in 2023, on the lower Brent environment, higher CAPEX, and also income tax from the country, we view a drop in the capital allocation flexibility for the company. It would be great to hear companies' view in terms of capital allocation ahead. If you see dividend payments to be closer to the bottom or the high range, between the 40 to 6 percent policy and maybe breaking between your expectations for this year 2023 but also looking they need to to long term considering investments in the strategic plan and also oil and fuel prices environment My second question, in the past months we have seen some discussions in the country to potentially change fuel prices calculation and fuel prices has actually been increasing gradually in the past months, right? So it would be great to hear how discussions with the government have been going on this front. and your thoughts on fuel prices ahead. How much gap you still see to international prices and how much and on what timing this gap could eventually be adjusted.

Those are my questions. Thank you. I will take both questions.

First of all, in relation with the CAPEX, As you have observed, the cap is being well executed. We are fully in line with the expectations so far. And to that extent, we hope to finish the year within the ranges that we have mentioned to the market before, which is a rate that is in the order of $5.8 to $6.5 billion. And the distribution or allocation of that capex, as I mentioned before, is in line with the 2040 strategy, which is an important focus in the hydrocarbon business of about 70%, transmission and roads 20%, low emissions the rest. So we are not expecting surprises. And it shows the commitment of the company to its growth strategy. And with respect to the second question that has to do with Fepec, if i understood correctly about prices the government has opted for a commitment of making an adjustment on the fuel prices of domestic fuel prices and it has been executing it consistently in a committed manner And thanks to that, you have been able to see the change in the trend of accumulation of pet peck. We, as the government has announced, we hope those internal price adjustments will continue. And this is not only for the end of the year, but also for 2024. The goal of the national government is to have domestic prices aligned with international prices by the end of 2024. That is a plan that has been announced and the route that we are using as a planning premise.

Thank you. The next question is from the chat, from Goldman Sachs.

They ask about the accounts payable of FPEC. Resolution 1612 refers only to the balance of FPEC for the second quarter of 2022, and what is the expectation of the company to receive the remaining balance of FPEC?

Hi, Joel. Thank you for your question.

With respect to FEPEC, as you saw in the financial disclosures, the balance of FEPEC as of this semester was 31 million pesos. In the second quarter, there was an offset in corresponding to last year. And what we see from now on is that those compensations will continue to be quarterly. at least that's what we have seen so far the idea is to have conversations so that the balances will not accumulate above 12 months but at the same time that the conversations will not be premature so i have to have a margin for maneuvering and also for the government to see how the prices evolve as well as the adjustment We think that is a viable mechanism. The fiscal framework in the medium term is giving us visibility on how the government is considering to offset balances from now on. We have a public document that shows what is the balance that the government expects for the end of the year, and also how it plans to offset that next year, and that's the premise of the planning. So, if you look at it from a historical perspective, the level of uncertainty with respect to the recognition of effect account and the evolution of the balance, has decreased dramatically this year, and we see a path so that by the end of next year, the disbalance in the FedEx account should be minimal. That's what we are seeing, and I hope that has answered your question. The next question is also from the chat, from Latin Finance. He said, Ecopetrol announced yesterday that it has redeemed $822,000 in bonds. How did the company finance the redemption of those bonds, and what other finance plans does Ecopetrol have for the rest of the year? and then thank you for your question and the operation that we announced yesterday it's an appendix of the operation that we carried out a month ago associated to the bond that was issued. The idea was to issue that bond, which was $1.5 billion, in order to refine the existing debt. So the resources used for this redemption were partially what we collected a month ago with the $1.5 billion. So the situation, as I said in my presentation, It leaves us with the challenge of refinancing for the year. So all of the short-term deadlines or expiration have already been resolved. We refinance them in medium and long term, some to five years, others to 10, and others to seven years. So that gives us a debt profile that makes us feel more comfortable. and gives us more financial flexibility from now on. So the focus then for the rest of the year is transit to next year. We will have a couple maturities next year, about $1.5 billion. We will be monitoring market conditions so as to understand if it makes sense to activate some of the refinancing. That's one of the themes. And also the ordinary course of the business always considers operations to maintain or working capital. That's what we are anticipating. Thank you. Thank you for your answer. The next question comes from the chat. asks, what is the self-sufficiency strategy for gasoline, diesel, and natural gas according to the demand behavior in Colombia?

Alvaro, morning.

Thank you for your question. I will answer. Walter Anoa from the Refining and Industry Processes Vice Presidency. I would say that it should be mentioned that ecopetrol has an extremely relevant role for the supply of clean fuels to the country. It is worth mentioning that in diesel the country is self-sufficient and we even have balances that are exported from the Cartagena refinery and we have international quality. In jet fuel, we are also self-sufficient and have balances for export. And this is done from Cartagena Refinery. And we're talking about a normal operation with all our plants in operation. Sometimes, periodically, we have shutdowns in our assets and production units, and the production can go down. But at large, we have surplus in diesel and jet. When talking about gasoline, it should be mentioned, and remember that by 2013, the demand was 60 or 65,000 barrels per day, and it was supplied with national production. However, since 2014, we have seen a sustained growth of demand for gasoline in the country, and reaching values of 140,000 or 150,000 barrels per day, so gasoline demand has doubled volumetrically in the past 10 years, although in Eco Patrol they have been increasing our production The Cartagena refinery started operations in 2016 or 17, increasing the production of fuels, including gasoline. Our current production is between 80 000 and 90 000 barrels per day from both refiners so for these demand levels to supply the market we do need imports of gasoline of about 60 000 barrels per day which are also managed by a cop patrol to ensure meeting the market demand And to the extent that the demand is maintained at this level, our production will be sustained about 90,000 barrels per day. So we will have to meet that demand through imports. We have relevant projects in both refineries, Barrancabermeja and Cartagena, in order to ensure that we will continue improving the quality of that gasoline. lowering the sulfur levels. We want to get to be less of 10 parts per million and also to improve the octane. And this is being executed from now to 2030 to meet the domestic regulations that is already issued and effective as to the enhancement of fuel quality. In general, in 2023, we have had a reduction in the level of imports of both diesel and gasoline. And I would like to mention that last year in September, we started the expansion of the Cartagena Refinery. And we were able to add 6,000 barrels of additional gasoline production, reducing the import levels. And to the extent that the demand is maintained at these levels of 140 or 150,000 barrels per day, the imports of gasoline will continue to be necessary to meet the demand in the country. As part of our strategy in 2040, we are not foreseeing so far increases in the refining capacity in Colombia.

Thank you.

Well, we have finished our time, Mr. President. You can convey your final message now. Well, thank you to all the participants, executives, and directors of Ecopetrol, the team. I would like to reiterate our willingness to continue with our roadmap and our investment portfolio. for the medium and long-term strategy. Have a very good day. Thank you. This is the end of our results conference for the second quarter of 2023. Thank you for your participation. You can disconnect now.