EC Oil and Gas · Colombia · Integrated energy · State-linked · Thesis updated July 17, 2026

Better wells, bigger tax cloud

Ecopetrol still earns most of its money from oil and gas, especially exploration, production, transport, and refining.
Operations look better than the stock’s mood: 2025 reserve replacement reached 121%, the best level in four years.
Gas is the main growth bet, with Sirius, Orca, Lorito, and Copoazú-1 adding depth to the project list.
The biggest overhang is DIAN’s retroactive COP 9.4-9.6 trillion tax claim, now on a court path that may last 3-6 years.
ISA gives the group steadier power transmission and toll road cash flow, but Brazil regulation already cut into its results.
The Brava Energia tender offer could add Brazil reserves and output if Ecopetrol closes up to 51%.

01 Running thesis

Good execution, hard questions

The bull case starts with operations. Ecopetrol kept production high, replaced 121% of reserves in 2025, and moved several fields forward. Lorito and Orca were declared commercially viable. Copoazú-1 confirmed new Caribbean offshore gas accumulations separate from Sirius.

The growth plan is not only in Colombia. Ecopetrol is keeping its Permian joint venture in the United States, using partners like Oxy, Parex, and Gran Tierra, and trying to buy up to 51% of Brava Energia in Brazil. If that tender offer closes, it should add reserves and help group production.

The bear case is serious. DIAN, Colombia’s tax authority, is seeking COP 9.4-9.6 trillion for 2022-2024 fuel import VAT, penalties, and interest. Ecopetrol says the risk of losing is very low, and DIAN has discarded an embargo, but the court phase may take 3-6 years.

Finn’s overall view is middle of the road. Ecopetrol is performing well, but the stock still has to carry oil price swings, political and tax risk, blockades, weather risk, and a valuation that is not clearly cheap enough to ignore those problems.

May 2026▲Q1 2026 added two growth vectors: Copoazú-1 confirmed new offshore gas accumulations separate from Sirius, and Ecopetrol kept moving toward a controlling Brava Energia stake.

Apr 2026→The 2025 Form 20-F confirmed the four main revenue sources and the four reportable segments. The business mix stayed intact.

Mar 2026▲Ecopetrol reported 121% reserve replacement, its best level in four years, and moved Lorito and Orca forward. The DIAN case shifted to a 3-6 year court path, reducing near-term liquidity fear but keeping the overhang.

Nov 2025→Management said it had no interest in selling the Permian assets, while still reviewing the joint venture structure. The Statkraft solar portfolio closed, adding to smaller transition options.

Aug 2025▲Production reached 751,000 barrels of oil equivalent per day for the semester, the highest level in a decade. Lorito was declared commercially viable with about 250 million barrels of recoverable resources.

May 2025▼The COP 9.4 trillion DIAN claim raised the risk profile. Ecopetrol also flagged partner uncertainty in South Caribbean offshore blocks and kept $500 million of CapEx flexibility.

Apr 2025→The 2024 Form 20-F did not change the main thesis. It did remind investors that reserve estimates can move with regulation and market assumptions.

Mar 2025→The Oxy Midland Permian agreement was extended to June 2026, supporting U.S. production. New export and stamp taxes in Colombia added an estimated $50 million monthly headwind.

02 Business model

Barrels, pipes, refineries, wires

Ecopetrol is an integrated energy company. It finds and produces crude oil and natural gas, moves hydrocarbons through pipelines, turns crude into fuels and petrochemicals, and owns ISA, which runs power transmission and toll road concessions in Latin America.

The 2025 Form 20-F says the group has four main revenue sources: sales of crude oil and natural gas, hydrocarbon transport services, sales of refined products and biofuels, and energy transmission plus toll road concessions. That matters because oil still drives the cycle, while ISA helps smooth the ride.

The model works when Ecopetrol keeps fields producing, replaces reserves, runs refineries well, and earns regulated or contracted fees from transport and transmission assets. It breaks when Brent falls, local taxes rise, courts freeze cash, pipelines are blocked, or weather cuts production and demand patterns.

03 Product portfolio

What Ecopetrol sells

Cash cow

Crude oil

Crude oil is the core profit engine. It also makes Ecopetrol highly exposed to Brent prices and export taxes.

Growth engine

Natural gas

Gas is the main transition fuel and supply gap answer. Sirius, Orca, Lorito, Copoazú-1, and imported LNG plans are central to this push.

Steady

Refined fuels

Gasoline, diesel, jet fuel, LPG, and other products come mainly from Barrancabermeja and Cartagena. Regulated fuel pricing in Colombia can move reported revenue and cash timing.

Cash cow

Hydrocarbon transport

Pipelines and logistics move crude and products for Ecopetrol and third parties. This segment earns fees, but it is exposed to attacks, blockades, and volume changes.

Steady

Power transmission and toll roads

ISA gives Ecopetrol regulated infrastructure cash flow across Latin America. It helps diversify the group, but regulation in Brazil can still hit EBITDA.

Option

Renewables and low-carbon fuels

Solar projects from Statkraft, the JK1 and JK2 wind projects with 259 MW of planned capacity, and sustainable aviation fuels are smaller today. They give Ecopetrol options if the energy mix shifts faster.

04 Business segments

Oil still pays most bills

Exploration and Production51%modest

Transport and Logistics24%flat

Refining and Petrochemicals6%flat

Energy Transmission and Toll Roads Concessions19%modest

The mix uses 2025 EBITDA contribution from Ecopetrol’s 2025 results release. Exploration and Production led the group, while ISA made the company less dependent on oil but did not remove oil price risk.

05 Risk factors

What could go wrong

DIAN tax case

High impact · Medium odds

DIAN is seeking COP 9.4-9.6 trillion for 2022-2024 fuel import VAT, penalties, and interest. Ecopetrol says the risk of loss is very low, and the administrative phase is complete. The court phase may take 3-6 years, so the overhang can last even without a cash hit soon.

We watchAny court ruling, settlement talk, provision change, or cash restriction tied to the DIAN claim.

Oil price drop

High impact · Medium odds

Ecopetrol’s highest-profit segment is still exploration and production. Lower Brent prices can cut revenue, EBITDA, and cash available for dividends and investment. Management has already discussed CapEx flexibility to protect production when prices weaken.

We watchBrent price trends, Ecopetrol EBITDA breakeven comments, and any cut to the annual investment plan.

Colombia policy and fuel rules

High impact · Medium odds

New export and stamp taxes can raise costs. A DIAN ruling also imposed a 19% VAT view on fuel imports, which is tied to the larger tax dispute. Regulated fuel prices can change reported sales, receivables, and working capital.

We watchChanges to export taxes, stamp taxes, fuel price rules, VAT rulings, and FEPC receivable balances.

Blockades and infrastructure attacks

Medium impact · High odds

Ecopetrol depends on fields, roads, power, ports, and pipelines staying open. Blockades or attacks can cut production and lift logistics costs. These events can also delay projects in remote or sensitive areas.

We watchReported production outages, pipeline incidents, field blockades, and rising freight or logistics costs.

ISA regulation shock

Medium impact · Medium odds

ISA makes Ecopetrol more stable, but it is not risk-free. In 2025, Brazil’s RBSE regulatory adjustment reduced ISA EBITDA by about COP 0.6 trillion. More tariff or concession changes could weaken the diversification benefit.

We watchBrazil transmission tariff decisions, RBSE updates, and ISA segment EBITDA versus guidance.

Gas project delays

Medium impact · Medium odds

The long-term growth story leans on Sirius, Orca, Copoazú-1, LNG import projects, and other gas supply plans. Offshore projects need permits, civil works, partners, contracts, and large capital budgets. A delay would make Colombia’s gas shortfall harder to solve and push cash flow further out.

We watchCopoazú-1 test results, Orca development approvals, Sirius civil works, LNG import milestones, and partner changes.

06 Quick answers

In one breath

What does Ecopetrol do?

Ecopetrol produces oil and gas, transports hydrocarbons, refines crude into fuels, and owns ISA, a power transmission and toll road business. Most profit still comes from hydrocarbons.

Why is the DIAN tax claim important?

The claim is large, at COP 9.4-9.6 trillion, and covers fuel import VAT for 2022-2024. Ecopetrol says it has a very low risk of losing, but the court process may last 3-6 years.

Is Ecopetrol becoming a clean energy company?

Not yet. Renewables, wind, solar, LNG, and sustainable fuels are growing options, but oil, gas, pipelines, and refineries still drive the company.

What are the next catalysts for EC stock?

Watch the Brava Energia tender offer, Copoazú-1 testing, Orca development approvals, Sirius project progress, and any DIAN court updates. Oil prices will also keep moving sentiment.