The decline was driven by factors such as the fall in the benchmark oil price, limited contributions from new operational efficiencies and average performance in discoveries and extensions.
2024 was a key year for Ecopetrol, but the signs are not encouraging. According to a report by Bancolombia, the company's proven reserves, which represent its capacity to sustain future production, could decrease by 4.6%, a reduction driven by factors such as the fall in the price of benchmark oil, limited contributions from new operational efficiencies and an average performance in discoveries and extensions. Analysts point out that this scenario raises doubts about the company's sustainability in the medium term and its ability to respond to the challenges of the global energy market.
In concrete terms, annual production is expected to reach 255 million barrels of oil equivalent (MBPE), while only 167 MBPE in proven reserves would be added, bringing the life of these to 7.1 years, with a reserve replacement ratio (RRR) of 65%. This means that Ecopetrol would not be able to fully replace what it extracts, a structural problem that could worsen if strong measures are not taken.
The company's president, Ricardo Roa, mentioned that in order to return to the 2022 numbers, two factors must be met: a barrel of crude oil at US$ 100 and an exchange rate of $4,800. “If we had the same conditions as that wonderful year. In 2022, a barrel of crude oil was worth $410,579, today it is worth $327,320, and that difference marks a different number, important in the economic results, with an impact on revenue, EBITDA and profit,” explained Roa.
The impact of oil prices on reserves
The price used to calculate Ecopetrol's reserves has dropped to US$79.1 per barrel from US$82.8 a year earlier. Although the direct impact on reserves would be only 7 MBPE because the price remains above the commercial viability threshold of US$70 per barrel, this reduction reflects a significant vulnerability. The most recent reserves report shows that the company does not have a significant number of fields that are profitable at prices below that threshold, which limits its ability to react to market fluctuations.
Another critical aspect is the limited impact of operational efficiencies on reserve additions. In 2023, this contribution was lower than expected, and the projections for 2024 are not optimistic. The decline in the operating margin in the exploration and production (E&P) segment, which fell by 100 basis points, and the forecast of a consolidated EBITDA margin of 39% in 2025, the lowest figure since 2016, aggravate the situation. This places the contribution from efficiencies at its lowest level in a decade, which directly impacts the company's ability to certify new reserves.
In December 2024, Ecopetrol announced the purchase of a stake in the CPO 09 field, an acquisition that could add 41 million barrels in reserves and improve the reserve replacement ratio to 82%. However, the recognition of these reserves depends on the approval of the National Hydrocarbons Agency (ANH), a process that could postpone their incorporation from year onwards. This adds an element of uncertainty to the overall reserve balance for 2025.
“With this acquisition, we not only strengthen our autonomy in the exploitation of resources, but we also secure the necessary resources to advance the fair and equitable energy transition projects that the country demands,” said Roa.
According to projections, Ecopetrol will close 2024 with proven reserves of 1,796 million barrels of oil equivalent (MBPE), a decrease of 2.4% compared to the previous year. With a reserve replacement rate of 65%, the company faces a scenario in which its ability to guarantee the sustainability of its operation in the long term is in question.
In summary, although improved recovery and some specific discoveries continue to provide results, these are not sufficient to offset the decline in total reserves. With a projected reserve life of 7.1 years, the company faces the challenge of optimizing its processes, diversifying its portfolio and seeking new sources of reserves to ensure its relevance in the competitive global energy market.