Ecopetrol S.A. (NYSE:EC) Q3 2022 Earnings Call Transcript

So what we’ve said is we’re discussing with our partner with ExxonMobil on how to go back and do some of the commercial agreements that we had with them and then we’ll take this forward. And each company will return to the ownership, the original ownership of the areas in case of Kale and Platero. So that’s where we are. I would say that we will as Ecopetrol remain with the ownership of the acreage. You know long-term we’ll see where that goes. In terms of cost implications we’ve spent money on preparing for the environmental submission, the application of a license. We’ve done social investment in the area and we’ll manage that accordingly. We don’t see any issue with that. So right now, I think in terms of key steps is awaiting for a response from A&H.

And they’re taking it from there and obviously in constant and continuous communication with our partner. The potential of the already signed contracts and both of them have been very vocal in terms of honoring the existing contracts. And I think that’s important. We’ve mentioned that we foresee eventually some ten years of activity going forward in those areas. We’re not only shooting new seismic drilling wells, we had good success as you’ve seen from exploration. But we’re also reinterpreting seismic, which has proven to be quite useful. You know we can do as an example if we do 2,000 square kilometers per year of new seismic surveys and collected. And the recent or the most recent conversations Andrew have been around the possibility of looking at additional exploration potential beyond the contracts that have already been signed.

And that means I mean we’ve been talking to both ministries. We’ve sat down our technical teams with them looking at what that would entice. How would that look in terms of what’s the potential, what are the options? Just sharing data and information and having open conversations around our view, our view of what the subsurface potential could be. In terms of Invercolsa, Nicolas if you can help us with where we are in the process? Go ahead.

Nicolas Ramirez: Yes, Felipe. Andrew thanks for your question. First, in terms of our approach to divestments in general, so on that regard our approach remains unchanged that is basically to constantly review our portfolio Transport distribution and commercialization of natural gas in Colombia, where we hold a 51.8% stake. Our decision to divest our equity remains unchanged as announced earlier this year in May. And in due course, we will take this decision to review with the new government. As you know, this process of divestment of assets that have participation of Colombian’s nation in its equity. It’s ruled by Law 2 to 6 in Colombia, which includes the revision or the stage at which the government needs to provide a green light to proceed. So if and when we obtain this green light, we envision a process that will take around nine months to complete. Thanks again for your question Andrew.