Alberto Consuegra Granger: Good morning, Daniel. This is Alberto Consuegra. I’d like to give you my greetings. Let’s talk about production. When you look at the last quarter of the last year, we have to take into account that Permian was doing its last drilling and completion of wells campaign. So production increased during the last quarter reaching a 158,000 equivalent barrels per day. What happened during this first quarter? The first thing is that we see the effect of the declination of the basic curve of Permian. This means that production goes down from 100,000 to 840,000 something, which was the average in the first quarter. Then the materialization of risks that have to do, first of all, with we had a campaign of, maintenance in the Cupiagua plant that affected the production of gas.
And I’ll talk about the forward-looking later for the rest of the year. The second thing was the materialization of risks associated to the blockades and problems of third party actions that affected us in 374,000 barrels per day, which affected us in Cano Sur, Rubiales, and Capachos. The third impact has to do with the closing of the — as a product of El Nino phenomenon that changes the production from 757 to what we had in average. What happens with the rest of the year? Everything has to do with managing risks. So one of the things that we were seeing was the possibility of an expansion of El Nino phenomenon to April and May. That is not occurring with the intensity we were expecting. So production is behaving in a better way that allows us to increase the range from 725,000 to 730,000 or 735,000.
The subject of blockages and theft of electrical materials, especially in the heavy oil well areas could also have an incidence in the rest of the year. So this is a subject related to how we approach the territories, how we create relationships with the communities and the authorities in order for us to manage those risks in the better way so we’d be seeing a better perspective of production in that regard. And the third thing is that we’d be able to develop the activities in the time planned. We have to handle the declination of the fields and natural downward slope and make sure that that happens in the right time. For example, in CPO09, right now we have the idea of having an early start between June and September in those facilities, but that depends on the advance of the construction works.
If we don’t do it, that would just mean a lag in production, and we’ll see a positive impact only in the last quarter. So this has to do with the risk management issues. We’re very optimistic. We think that we’re going to be able to have a production above the initial target set, but we have to insist and say that this has to do with the opportune handling of the risks, we see in the operations.
María Catalina Escobar Hoyos: This is María Catalina, Daniel. Thank you for your question. The first thing would be to say that we understand that the court notified the Ministry of Finance on the suspension of the decision. So right now, the effect has been suspended. However, it is important to mention that in Ecopetrol, for some days, while the decision was still in effect and royalties were deductible. We presented our income tax returns according to what was in effect at that time in relation to the impact that we might be seeing in the second quarter of 2024. It’s very difficult to say exactly what the impact will be because that will depend a little bit on how the court modulates its decision or the ruling, the final ruling after they look through the fiscal incident.
However, let me tell you about some perspective scenarios. The first and the best one would be to, keep on as we are with deductible royalties, which would be consequent and online with what we announced at the end of the year or what we announced at the closing of the first quarter of 2024. Let’s say that a moderate scenario that could be, brought about by the court is that that adjustment of the income tax in 2023 would be able to cross it with future years. And that prepayment, let’s say, if that moderation of the crossing, if there’s no impact on the GDP, we might have an infection in our cash flow. That’d be one scenario. And the asset scenario would be one where the court would correct the ruling and say that royalties would not be deducted on 2023.
That would impact us in COP 1.5 trillion, which we would have to adjust as a lower balance in favor or higher tax versus what we reported on the first quarter, that impact not making royalties deductible would be more or less COP 500 million. And when the court comes out with a ruling, we would have to see how much would have been accrued in the second quarter of the year, but the impact would be more or less, around COP 2 million or COP 2.3 million approximately or trillion. I would reiterate that these are just scenarios. It will depend of course on the decision taken by the court. We are respectful of the decision they make, and we will act according to that ruling. Thank you.
DanielGuardiola: Thank you, Maria Catalina and Alberto.
Operator: The next question comes from Ricardo Sandoval of Bancolombia. Mr. Sandoval, you can ask now, please.
Ricardo Sandoval: Good morning, everybody, and thank you for the talk. I have a doubt in relation to your interest related to gas. I’d like to hear Alberto and Ricardo talk about or to tell me if you have studied the assets that kind of has in the production of gas, it represents more or less 20% of the demand of the country. So undoubtedly, the country needs the gas produced by that company, which might have — which might be going through difficult financial situations. I’d like to know about those assets and if you’d be interested in an acquisition process or if you think that it’s probable that that you might improve the production of gas in those fields. What are your thoughts about this?
Ricardo Roa Barragan: Good morning, Ricardo, and thank you for your question. This is Ricardo Roa speaking. In effect, we have known through the communication media the possibility of having come going to a sale of its shares and of its assets in the country. That of course is probably part of the appraisal opportunities that, Ecopetrol does on its portfolio and understanding logically as we’ve announced, certain deficits of gas in the country for the next five years, this asset will be observed in the internal protocol of analysis of those opportunities of investment, within the Ecopetrol Group, not only that but any asset that we might be thinking of incorporating within our purpose of ensuring or guaranteeing to the country the supply of gas in a permanent way.
Those are being evaluated within the procedures that I’ve already mentioned and which are part of the rigor that we appraise. Any decision that could be taken, of course, if, we take a decision, we would be advising the market in a timely manner as to the level of production to reach the levels we had in the fourth quarter of 2023. That’s our big bet in the investment plan we have right now. We are trying to maintain the levels of production we reached in 2023. The path looks bright in the first quarter, 733 million barrels per day. I can’t announce the number of April yet, but I think it’s an even better number, and it shows that we are continuing on the path of, making all of our fields ready and reach the excellent production levels we obtained at the end of last year.
I would now give the floor to Alberto if he wants to go in-depth on the subject of production and gas asset of Canacol. Ricardo, thank you. Well, thank you for your question. I’ll add the following. We are neighbors in many of the different fields or blocks of Canacol in the lower valley of the Helena area. So what we do is make an analogy with what’s happening in our own fields to understand the adjustments we have to do in the development plans of our production fields. For example, the one we announced recently, which is the case, but also to adjust the profiles of what would be the objectives, the exploration objectives or targets in those blocks or fields. We’re continuously looking over and looking at kind of at least have more certainty of what we have to do in our own fields.
Ricardo Sandoval: Thank you very much.
Operator: Now we have Andres Duarte from Corficolombiana. Mr. Duarte, you may ask now.
Andres Duarte: Good morning, and thank you very much. I have three questions. If you could answer them all, well, great. But at least the first, I’d appreciate if you can answer it. In relation to the production of Ecopetrol without America and Permian and without Hocol, in fact. Only four fields, CPO-09, Victor, Caño Sur, and San Francisco, highlighting Caño Sur, which shows increases in production. The other show a reduction all annual and most of them quarterly. I’d like to know if within your expectations, you have the recovery of some of those fields that have had a reduction and what would support that expectation? And the other question is related to gas, specifically with the possibility of importing gas from Venezuela, if that would be feasible and if the restrictions that sometimes exist, sometimes don’t exist would be in place.
