Is Ecopetrol’s $7.2bn plan enough to anchor Colombia’s energy future?

Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC), Colombia’s state-controlled oil and energy giant, has approved an annual investment plan for 2026 that ranges between COP 22 trillion ($5.9 billion) and COP 27 trillion ($7.2 billion). The move comes amid a challenging external environment marked by conservative Brent oil price assumptions and exchange rate volatility, but reflects the company’s commitment to maintaining strong output levels while accelerating its diversification into clean energy, power transmission, and sustainability-linked operations.

The plan, which maintains investment levels near those projected for the end of 2025, prioritizes capital discipline across all of Ecopetrol Group’s business lines. Approximately 70 percent of the investment outlay is earmarked for the hydrocarbons business, including oil and gas production, transportation, and refining. The remaining 30 percent will support the company’s ongoing energy transition efforts, power transmission initiatives, road concessions, and sustainability-linked programs under its SosTECnibility framework. Despite budget pressures, the Ecopetrol Group is targeting an EBITDA margin of 40 percent for 2026, consistent with its performance this year.

Management has based the plan on a Brent crude assumption of US$60 per barrel and an average exchange rate of COP 4,050. Against that backdrop, the Ecopetrol Group is placing greater emphasis on operational efficiency and cost discipline through its COP 5.7 trillion Profitability and Efficiency Program, which is designed to reduce lifting costs, support working capital, and improve the competitiveness of its refined products and transported volumes. Transfers to the Colombian treasury in 2026 are estimated at approximately COP 28 trillion, reinforcing the company’s central role in national fiscal planning.

How is Ecopetrol allocating its COP 27 trillion budget across hydrocarbons, grid, and clean energy?

Of the total proposed capex, about COP 17.2 trillion will be allocated toward sustaining oil and gas production levels, refinery throughput, and transported volumes. For upstream operations, Ecopetrol is targeting average production of between 730,000 and 740,000 barrels of oil equivalent per day. This is expected to be achieved through the drilling of 380 to 430 development wells, with approximately 95 percent located in Colombia and the rest in the United States. Exploratory drilling will also continue in key basins including the Colombian offshore, Meta, and Putumayo regions.

Oil remains the dominant focus, accounting for nearly 89 percent of upstream investments, while natural gas projects will receive COP 1.5 trillion in 2026. Key gas development areas include the Llanos Foothills and the offshore Caribbean, with the goal of contributing around 105,000 to 110,000 barrels of oil equivalent per day in gas production. This rebalancing is designed to offset declines in mature gas fields and support Colombia’s growing domestic demand for cleaner-burning fuels.

The transport division, led by affiliates such as Cenit, Ocensa, ODC, and ODL, is expected to receive about COP 1.5 trillion. Investments will focus on pipeline integrity, system reliability, and throughput optimization. Transported volumes are forecast to range between 1.11 million and 1.12 million barrels per day, mirroring current year trends.

In refining, COP 1.7 trillion will be directed toward boosting capacity, availability, and sustainability across the Barrancabermeja and Cartagena refineries. The investment will also support fuel quality improvements and reduce reliance on product imports. Combined refinery throughput is expected to remain between 410,000 and 420,000 barrels per day, supported by recent maintenance and optimization work.

Power transmission and road investments, led by Interconexión Eléctrica S.A. E.S.P. (ISA), a majority-owned Ecopetrol subsidiary, are expected to receive between COP 6.2 trillion and COP 6.8 trillion in 2026. About 80 percent of this allocation will be directed to electric grid infrastructure across Colombia and Latin America. The transmission segment continues to be one of the Ecopetrol Group’s fastest-growing non-hydrocarbon revenue sources, with operations in Brazil, Peru, Bolivia, and Chile contributing to long-term returns.

The energy transition pillar of the business will see about COP 0.9 trillion invested in non-conventional renewable energy, energy efficiency, and solar development. These efforts are expected to generate approximately 750 megawatts of additional clean energy capacity from projects that are either operational, under construction, or in active development. The group has also allocated COP 1.7 trillion to initiatives tied to climate adaptation, waste reduction, health and safety, and sustainable land use.

What does the Grenergy solar acquisition reveal about Ecopetrol’s self-generation strategy?

In parallel with its capital plan, Ecopetrol disclosed on November 28 that it had concluded negotiations with Spanish energy developer Grenergy Renovables S.A. for the potential acquisition of seven solar project companies located across the Colombian departments of Córdoba, Cesar, Magdalena, and Sucre. Each entity holds the rights, licenses, and infrastructure needed to develop a solar photovoltaic project with an installed capacity of approximately 12.6 megawatts peak, or MWp.

The total generation potential from the proposed acquisition stands at 88.2 MWp, which would be added to Ecopetrol’s growing renewable portfolio upon closing. These projects are subject to final legal and regulatory approvals. Once completed, the deal would represent a major step toward the company’s strategic target of reaching 900 MW of self-generated renewable energy by 2040 under its “Energy that Transforms” framework. The solar acquisition would also reduce Ecopetrol’s dependence on bilateral energy contracts and mitigate its exposure to spot electricity market volatility.

The solar assets are expected to support the company’s operational energy needs, especially at refining and upstream sites, and will contribute directly to reducing its carbon footprint. This transaction follows the commissioning of the La Iguana Solar Farm earlier this year, which added 26 MW of solar capacity dedicated to powering the Barrancabermeja refinery. By the end of the third quarter of 2025, the Ecopetrol Group had already brought 234 MW of renewable energy online, a 77 percent increase compared to the previous year.

How does Ecopetrol’s Q3 performance reinforce its investment posture for 2026?

Ecopetrol’s third-quarter 2025 results confirmed the company’s ability to sustain profitability while investing in long-term energy infrastructure. Revenue for the quarter reached COP 29.8 trillion, with EBITDA of COP 12.3 trillion and a net income of COP 2.6 trillion. For the nine-month period, Ecopetrol recorded COP 90.9 trillion in total revenue, EBITDA of COP 36.7 trillion, and a net profit of COP 7.5 trillion, translating to an EBITDA margin of 40.4 percent.

Production in Q3 stood at 751,000 barrels of oil equivalent per day, with significant contributions from Colombian fields such as Caño Sur and the CPO-09 block, as well as the Permian basin in the United States. Transported volumes were robust at 1.118 million barrels per day, aided by infrastructure maximization and system reversals. Refining throughput averaged 429,000 barrels per day, reflecting stable operations following major maintenance in Barrancabermeja.

The company also advanced its Caribbean gas strategy, securing environmental approvals from the National Environmental Licensing Authority (ANLA) to retrofit the Coveñas Marine Terminal with a Floating Storage and Regasification Unit. This infrastructure is expected to position Coveñas as a strategic liquefied natural gas import hub, supporting supply-demand balance and enhancing Colombia’s gas security.

Ecopetrol’s trading operations continued to perform well, with a maintained differential of –3.9 USD per barrel, reflecting effective commercial positioning and disciplined hedging.

What are investors and analysts watching as Ecopetrol enters 2026?

Institutional investors and analysts are closely watching how Ecopetrol balances its capital intensity with market volatility heading into 2026. While the COP 27 trillion investment ceiling signals continued confidence in the company’s core operations and energy diversification, the Brent benchmark assumption of US$60 per barrel introduces downside risk. That said, Ecopetrol’s track record of margin preservation and capex execution remains a key institutional strength.

Analysts expect more clarity in early 2026 regarding the timeline and value of the Grenergy transaction, as well as updates on the commissioning of new solar assets. Further milestones may include the start of gas flows from recently sanctioned projects in the Caribbean, capacity expansions in ISA’s Latin American grid operations, and potential strategic divestments or portfolio rotation as part of the group’s cash optimization strategy.

Sentiment remains cautiously positive, with Ecopetrol delivering on its sustainability disclosures, infrastructure resilience, and financial reporting transparency. In 2025, it became the first Colombian company to voluntarily publish a Financial Sustainability Report aligned with International Sustainability Standards Board references. Internally, it also scored a 68 on the Great Place to Work Workplace Environment Index, up from 60 in 2024, highlighting improvements in employee engagement and organizational culture.

With a robust investment pipeline, fiscal discipline, and expanding clean energy platform, Ecopetrol appears well-positioned to manage the dual imperatives of profitability and transformation in Colombia’s evolving energy landscape.

What are the key takeaways from Ecopetrol’s 2026 investment roadmap and solar expansion?

• Ecopetrol S.A. has approved a 2026 investment plan ranging between COP 22 trillion and COP 27 trillion, maintaining capital discipline while aiming to sustain production and expand clean energy initiatives.

• Roughly 70 percent of the budget, around COP 17.2 trillion, is allocated to hydrocarbons, including oil and gas production, refining, and transportation across Colombia and the United States.

• Ecopetrol expects to drill between 380 and 430 development wells in 2026, targeting production levels of 730,000–740,000 barrels of oil equivalent per day.

• Natural gas investments totaling COP 1.5 trillion will focus on the Llanos Foothills and Caribbean offshore projects, supporting cleaner domestic energy supply.

• Transport and refining segments are set to receive a combined COP 3.2 trillion, targeting throughput reliability, infrastructure resilience, and lower fuel import dependency.

• Subsidiary Interconexión Eléctrica S.A. E.S.P. (ISA) will invest between COP 6.2 trillion and COP 6.8 trillion, mostly in electric transmission across Latin America.

• About COP 0.9 trillion is earmarked for energy transition efforts, including renewable energy projects expected to contribute 750 MW in new capacity.

• Ecopetrol has agreed to acquire up to 88.2 MWp of solar capacity from Grenergy Renovables S.A., reinforcing its target of 900 MW of self-generated clean power by 2040.

• Third-quarter 2025 results show COP 29.8 trillion in revenue and a 41 percent EBITDA margin, with nine-month earnings at COP 90.9 trillion in revenue and COP 7.5 trillion in net income.

• Ecopetrol maintains a conservative Brent price assumption of US$60 per barrel for 2026, aiming to uphold an EBITDA margin of 40 percent and transfer COP 28 trillion to the Colombian government.