INTEGRATED SUSTAINABLE 1 REPORTMANAGEMENT Ecopetrol S.A
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INTEGRATED SUSTAINABLE 1 REPORTMANAGEMENT Ecopetrol S.A. Secretary General Corporate Responsibility Management Editing Ariel Suárez Gómez Claudia Santos González Sandra León Martínez GRI - Ecopetrol Point of Contact Ariel Suárez Gómez [email protected] Design and Layout GOOD;) Comunicación para el desarrollo sostenible www.isgood.com.co Photography Ecopetrol photo bank Bogotá, March 2020 Ecopetrol S.A. GRI 102-3 Carrera 13 # 36 - 24 Telephone: +571 2344000 Bogota, Colombia www.ecopetrol.com.co Your feedback is of great importance for us, so we invite you to channel your feedback on information published here via email corporate [email protected], and to use our social networks. ECOPETROL S.A @ecopetroloficial @ECOPETROL_SA INTEGRATED SUSTAINABLE REPORTMANAGEMENT ABOUT THIS REPORT • ECOPETROL S.A. TABLE OF CONTENTS 4 Message from the Chairma of the Board of Directors of S.A. 06 Ecopetrol in figures 2019 10 Significant Events 2019 12 Awards, accolades and certifications 14 About this Report 17 Message to our stakeholders 21 01 ABOUT ECOPETROL 26 Who we are 27 Business strategy 30 Higher Purpose 34 Corporate responsibility 35 Governance 50 Annual Corporate Governance Report 82 02 VALUE CHAIN 128 Exploration 129 Production 137 Transport 145 Refining and Petrochemicals 150 Sales and Marketing 155 Occupational Health, Industrial and Process Safety 167 Procurement 184 Innovation, Technology and Digital Transformation 191 ECONOMIC 03 DIMENSION 200 Behavior of the national economy 202 Contribution of Ecopetrol to the national GDP 203 Tax matters 204 5 Tax risks 215 Shareholder Engagement 216 Business Group Special Report 217 SOCIAL 04 DIMENSION 218 Work practices 219 Society and Community 250 Human Rights 279 ENVIRONMENTAL 05 DIMENSION 310 Strategic environmental guidelines 311 Comprehensive water management 317 Precautionary por Climate Action 331 Energy 355 Biodiversity 362 Circular economy 377 Environmental investments 386 Environmental Compliance 389 06 GRI STANDARDS CONTENT INDEX 396 CERTIFICATIONS 416 GC Advanced CoP Report – Global Compact 417 BSD Verification Report 418 07 ANNEXES 420 Business Group Special Report 421 Individual Financial statements 454 Consolidated Financial statements 573 ABOUT THIS REPORT • ECOPETROL S.A. MESSAGE FROM THE CHAIRMAN 6 OF THE BOARD OF DIRECTORS OF ECOPETROL S.A. The Board of Directors of Ecopetrol S.A. Together with Ecopetrol’s management, wishes to share with you our pride and we have defined priority issues in the satisfaction regarding our Company’s strategy to 2030, which are aimed at results and performance during 2019. In a maintaining operational excellence and complex global scenario, marked by lower profitability, as well as identifying the growth, geopolitical and social tensions, as actions necessary to address scenarios of well as greater pressures from our citizenry, greater volatility and dynamism, protecting we achieved noteworthy financial and the conditions necessary to achieve of the operational results. We surpassed most Company’s technological, economic, social of the targets outlined in the 2019-2021 and environmental objectives. As a Board business plan, while managing to consolidate directive, we are conscious that technology external alliances and businesses abroad that is a growth axis in all potential scenarios position the Group internationally and that wherein Ecopetrol participates. will prove decisive towards the fulfillment of our medium-term strategic objectives. We value the exceptional human talent that Ecopetrol is proud to retain, who makes the In 2019, Ecopetrol undertook a series strategy viable, which in turn is reflected in of key activities in energy transition, the fulfillment of corporate objectives, as well decarbonization, emissions reduction, as in the operational and financial results renewable energy, socio-environmental obtained in 2019, consolidating an efficient investment and diversity and inclusion, and safe operation. consistent with the corporate purpose of wagering on ambitious challenges aligned As strategic advisor to the Ecopetrol Group, with the 2030 Agenda for Sustainable we will continue on the path of growth and Development. Likewise, we highlight resilience, through a vision that integrates Ecopetrol’s achievements in contributing experience and innovation, empowering towards improving the country’s air Ecopetrol as a platform for the development quality, and our endorsement of energy and growth of our country. self-generation through the first solar megapark inaugurated in 2019 in the department of Meta. We committed to reducing 20% of our CO2 emissions to 2030, which is aligned with country goals. This is consistent with effort by all countries, governments and companies to mitigate the effects of climate change, as foreseen in the Paris Agreement. The Group’s companies Luis Guillermo Echeverri understand that energy transition is the CHAIRMAN response to climate change. ECOPETROL S.A. BOARD OF DIRECTORS 7 Standing from left to right: Sitting from left to right: Juan Emilio Posada Echeverri Luis Santigo Perdomo Maldonado Hernando Ramírez Plazas Orlando Ayala Lozano Germán Quintero Rojas Luis Guillermo Echeverri Vélez Esteban Piedrahíta Uribe Carlos Gustavo Cano Sanz Sergio Restrepo Isaza 8 STEERING COMMITTEE Felipe Bayón Mónica Jiménez González President Secretary General and Assistant to the President Alberto Consuegra Executive Operational Fernán Bejarano Arias Vice President Legal Affairs Vice President Orlando Díaz Alejandro Arango López Transformación Vice President of Human Talent Vice President Jürgen Loeber Jaime Caballero Vice President of Corporate Vice Projects and Drilling President of Finance Andrés Mantilla Zárate Tomás Hernández Director Center of Innovation Vice President of Refining and Technology and Industrial Processes Anibal Fernández de Soto Jorge Osorio Franco Vice President of Sustainable Vice President of and Environmental Development Development and Production 9 María Juliana Albán Pedro Manrique Corporate Vice President Vice President of Sales of Compliance and Marketing Rubén Darío Moreno Héctor Manosalva Vice President of (President CENIT) Transport and Logistics Ricardo Coral Carlos Santos Vice President Vice President of South Regional Procurement and Services Rafael Espinoza Rozo Juan Manuel Rojas Vice President Corporate Vice President of Central Regional Strategy and New Business Jose Darío Parra (e) Ernesto Gutiérrez Vice President Digital Vice President Orinoquía Regional Jorge Calvache María Consuelo Barrera (e) Vice President of Exploration Vice President of Assets with Partners ABOUT THIS REPORT • ECOPETROL S.A. GRI 102-7 ECOPETROL IN FIGURES 2019 10 FINANCIAL GE operating revenue GE operating income GE EBITDA Ecopetrol S.A. net income (Trillions of pesos) (Trillions of pesos) (Trillions of pesos) (Trillions of pesos) 2016 47.73 2016 8.25 2016 18.01 2016 1.56 2017 55.21 2017 15.50 2017 23.07 2017 6.62 2018 67.82 2018 21.71 2018 30.80 2018 11.56 2019 70.84 2019 20.42 2019 31.11 2019 13.25 ECOPETROL GROUP ECOPETROL S.A. ECOPETROL GROUP (GE) (GE) RESERVES (According to SEC definitions) EXPORTS (According to SEC definitions) GE Organic Investments Volume Value Proven oil and gas reserves (Billions of dollars) (Kboed) (Trillions of pesos) (Kbpe) 2016 2.5 2016 464 2016 5,964 2016 1,598 2017 2.2 2017 425 2017 7,427 2017 1,659 2018 2.9 2018 407 2018 9,354 2018 1,727 2019 3.5 2019 425 2019 9,017 2019 1,893 ECOPETROL S.A. SALES OF ECOPETROL GASOLINE AND DIESEL GROUP TRANSPORT EXPLORATION Gasoline Diesel Exploration Wells Transported volumes (Bpd) (Bpd) (Number of wells) (Kbpcd) 2016 90,624 2016 94,547 2016 7 2016 1,130 2017 92,574 2017 97,846 2017 20 2017 1,091 2018 91,873 2018 99,768 2018 17 2018 1,109 2019 95,458 2019 102,011 2019 20 2019 1,153 11 PRODUCTION REFINING GE crude and gas Ecopetrol S.A. total crude Throughput of refineries* Gross refining margin** (Kboed) (Kbpd) (Kbpcd) (USD per barrel) 2016 718 2016 552 2016 330.4 2016 14.0 2017 715 2017 545 2017 345.5 2017 13.5 2018 720 2018 549 2018 372.9 2018 11.8 2019 725 2019 548 2019 373.7 2019 10.6 * Barrancabermeja and Cartagena refineries ** Barrancabermeja refinery HIRING OF GOODS ENVIRONMENTAL SOCIAL AND SERVICES INVESTMENT INVESTMENT ECOPETROL Hiring Environmental investment* Social investment (Trillions of COL) (Millions of COL) (Millions of COL) 2016 10.4 2016 327,459 2016 14,855 2017 9.5 2017 470,548 2017 18,502 2018 10.4 2018 678,949 2018 45,088 2019 13.4 2019 841,852 2019 229,684 * Includes compulsory investments and voluntary strategic environmental management for $15,778 million. ABBREVIATIONS AND TERMINOLOGY GE Ecopetrol Group Mboe Millions of barrels of oil equivalent Bpd Barrels per day pesos or COL Colombian pesos Kbpcd Thousands of barrels calendar day One billion pesos One billion pesos ($1,000,000,000) Kbpd Thousands of barrels of oil a day One trillion pesos One thousand billion pesos ($1,000,000,000,000) Kboed Thousands of barrels of oil equivalent day 12 SIGNIFICANT EVENTS 2019 01 03 We provided the country with cleaner The Castilla Solar Park in Meta began fuels, accomplishing a significant leap operations, becoming the first mega- in terms of fuel quality. Diesel went park for energy self-generation in the from a weighted average of 25 to 10 parts country, which will prevent the emission of over 154 thousand tons of CO into per million of sulfur (ppm) and gasoline 2 from 150 to below 100 parts per million the atmosphere, a figure equivalent to of sulfur. With regard to transport in the planting of 1.200.000 trees. The Bogotá, according to the findings of the opening of this park, in alliance with the study carried out by the Universidad de Corporación Asociados Estaciones de los Andes issued on December 13, 2019, Servicio de Colombia (AES Colombia), a Transmilenio users are breathing better trade group of affiliated service stations, air, with a reduction inside buses of close demonstrated Ecopetrol’s commitment to to 50% in the particulate exposure of diversifying the nation’s energy matrix. passengers, known as PM2.5, due to the renewal of the fleet and the provision of better fuels.