And Operational Results for the Second Quarter of 2023. There will be a question-and-answer session at the end of the presentation. Before we begin, it is important to mention that the comments in this call by Ecopetrol's senior management include projections of the Company's future performance. These projections do not constitute any commitment as to future results, nor do they take into account risks or uncertainties that could materialize. As a result, Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call. The call will be led by Mr. Ricardo Roa, CEO of Ecopetrol; Diana Escobar, Vice President of Sustainability Development, Yeimy Baez, Vice President of Low-emission Solutions, Alberto Consuegra, COO, and Jaime Caballero, CFO. Thank you for your attention. Mr. Roa, you may begin your conference.

Good morning, everyone, and welcome to the Ecopetrol Group's second quarter 2023 conference call to present our operational and financial results. We appreciate your participation. First, I would like to highlight the dedication of our entire team, which has allowed us to achieve outstanding operating results in such a challenging market environment. Second quarter production averaged 728,000 barrels of oil equivalent per day, with a yearly increase of 23,000 barrels versus the second quarter of 2022 and the highest quarterly figure in the last three years. This dynamism is a result of the strongest execution of our operation and increased production from strategic fields, including Cano Sur and Rubiales in Colombia and Permian in the United States. These fields have played a crucial role in supporting our growth, allowing us to meet our production targets for the year to date. In the second quarter of this year, we recorded revenues of COP34.3 trillion, EBITDA of COP14.6 trillion, and net income of COP4.1 trillion. These figures are consistent with the 2023 financial plan. These results are supported by: Firstly, an enhanced operating performance through records in production, pumping lots in zones of our transportation system, refining throughputs, and clean fuel pollution loads in our refineries. Secondly, the exceptional results in Permian, Recetor, ISA, and Ecopetrol trade in Asia, along with a positive impact of the exchange rate from sales and an efficient commercial strategy. During the second quarter, we reached the following significant strategic milestones. In May, we completed negotiations on the collective bargaining agreement for the next four years. The negotiation took place within a constructive and respectful trial with union organizations, finalizing with an agreement that will concurrently benefit our workers, the company, and the country. In June, Cartagena was notified of the international arbitral tribunal decision regarding the claim filed on the January procurement and construction contract for the expansion and modernization of the refinery. The arbitration process was initiated through a request filed by Reficar in March 2016 and correlating a contract breach with the decision notified is subject to corrections, provisions, and clarifications of the records of the parties. This same amount was ranked at the top spot of the corporate reputation in Colombia for the 2023 timeframe. The business monitor of corporate reputation recognized Permian and Ecopetrol as the best company for attracting talent in the country. In the first half of 2023, we have added more than COP23.6 trillion in contributions to national development through royalties and dividends. On the other hand, the account receivable from the fuel price stabilization fund had the lowest average since January 2022. Finally, I would like to highlight that cumulative CapEx execution to the second quarter reached at least COP12.3 trillion, the highest in seven years, demonstrating our commitment to innovation and growth. Please continue to the next slide. During the first half of the year, we faced a highly uncertain macroeconomic situation. The combination of high-interest rates and banking instability in the United States, together with lockdowns in the Chinese economy, has impacted the prices of crude oil and refined products, introducing volatility to the market. Despite these challenges, we have excelled because of our company's operational resilience and adaptability. We have found opportunities within the current situation as our operating expenses could have been focused on remediate goods and utilizing strategies to seek out great opportunities similar to those we offer. We have been able to explore opportunities with our ongoing strategy in versatile markets and destinations, emphasizing the strategic position of our trading subsidiary in Singapore, Ecopetrol Trading Asia, which has sold over 85 million barrels of crude oil in the Asian market. During this quarter, crude oil sales to Asia continued to represent 54% of our results. Ecopetrol Trading Asia also successfully transacted carbon-neutral crude cargoes in line with the company's TESG agenda. Its EBITDA for the second quarter of 2023 reached $62.5 million, an increase of 42% over the previous quarter. Additionally, the CO2 output from the Carbon Trading desk has allowed us to commercialize 10 million barrels of accumulated carbon offset crude oil as of last July. Also, the commercialization of asphalt with recycled plastic with an export level of 350 tons and the distribution of five projects in Colombia has boosted the energy transition and circular economy in the region. All of the commercial performance has allowed us to trend in the differential of the crude oil basket, ensuring our competitive positioning in the market. The capital group continues with its all-inclusive strategy of efficiencies and competitiveness, enabling us to uphold the company's solid operational performance despite inflationary and market challenges. We're confident in our team's ability to meet the challenges and remain committed to sustainable growth and success in this dynamic business climate. I now give the floor to Diana Escobar, Vice President of Sustainable Development, who will update you on our progress regarding the company's total impact.

Thank you, Ricardo. Ecopetrol's commitment to the generation of social value was evident during this quarter through advancements in the performance of our social and environmental investment plan, which in 2023 totals COP766 billion, a figure equal to nearly 5% of the comparable investment by the nation's general budget. I would like to underscore the most relevant achievements during this past quarter. We highlight the start of the second phase of the Meta food supply network program in partnership with the Food and Agricultural Organization of the United Nations. Over the next three years, this program should positively impact 3,000 farming families and 32 associations in the region, strengthening production chains under commercial viability. Moreover, a cooperation agreement was defined with the national government and companies in the industry to pave 43 kilometers of the Puerto Gaitan to Rubiales road located in the Department of Meta with an investment of more than COP214 billion. This project will support the agricultural and rural development of the region, enabling over 1 million hectares with agricultural development potential, generating a positive annual impact of over 2.5% on the regional GDP. We also emphasize the successful national summit of Ecopetrol's entrepreneurship social investment program, engaging 1,576 entrepreneurs and micro and small enterprises from 45 municipalities that will benefit this year. In education, our school quality and retention programs have aided 641,000 students, which is 8% of the total enrollment in public educational institutions nationwide. Regarding the expansion of higher education coverage through the Ecopetrol graduate program, this quarter, we awarded 94 new scholarships to students in rural areas, reaching a historical total of 1,761 beneficiaries to date. In healthcare, our mobile unit in Magdalena Medio has assisted more than 6,500 people in seven municipalities in the Mid Magdalena region with access to low-complexity health services, which is equal to 8% of the vulnerable population in this area. Regarding access to utilities, namely gas, water, and power supply, our social gas program certified gas service connections for more than 5,200 new households in the departments of Atlantico, Santander, and Casanare. Concerning water supply, we highlight the provision of COP6.5 billion for the construction of one public drinking water well that benefits more than 13,000 people from ethnic groups as part of our commitment to provide water supply solutions in the department of La Guajira. In access to electricity, we participated in a task force led by the Ministry of Mines and Energy, seeking to define a portfolio of initiatives that could develop into self-sustaining energy communities. Our social investment portfolio has been further strengthened with the allocation to the Ecopetrol Group of 27 new projects valued at COP167 billion through the work for taxes mechanism. Our business group holds the highest participation in this mechanism, representing 37% of the nationwide allocation. Finally, we would like to highlight the social dialogue processes carried out with the communities in our areas of influence. In the quarter, we conducted 13 dialogue processes involving more than 1,000 social actors nationwide, including community action boards, academia, businesses, and local institutions. In addition, we launched the Ethnic Inclusiveness Support Program, called Forming and Diversity, training youth among the ethnic communities in Nariño and Putumayo to strengthen their individual and organizational competencies. In this way, through our business lines, we contribute to generating social value throughout the country, closing gaps, and improving the quality of life for those most affected by social inequality. I will now turn the floor over to Jaime, who will present the key financial results for the second quarter.

Thank you, Diana. Ecopetrol recognizes that generating long-term value in the context of energy transition requires an integrated balance between achieving financial profitability goals and delivering our strategic technology, environmental, social, and governance commitments with our stakeholders. Our performance dashboard shows significant progress in this regard. Technology is the main accelerator of this strategy, generating benefits for close to COP1 trillion in the first half of 2023 through increased revenue generation, cost reduction, avoided costs, and productivity increases. On environmental matters, the Group, aware of the active role it must play in terms of climate change and energy transition, has made progress as follows: Regarding emissions reduction, during the first half of 2023, the Group achieved a cumulative reduction of greenhouse gas emissions of 1.09 million tons of CO2 equivalents in Scopes One and Two, mainly in the upstream and downstream segments, through different enablers such as fugitive emissions, venting, flaring optimization, energy efficiency programs, and the use of renewables. A cumulative reduction goal of 1.40 million tons of CO2 equivalents by 2023, with respect to the 2019 baseline, is projected. For water management, we have achieved an average water withdrawal of 657,000 barrels of water per day for industrial use, well below the withdrawal limit of 724,000 barrels of water per day established for operation. Moreover, 49% reuse of freshwater withdrawal has been achieved, showing an over-compliance of 123% compared to the target set for the first semester of 2023. Also, there has been a 29% reuse of production water affected by pressure injection flow systems, which is compensated by good performance in other two indicators. As part of the ambition to incorporate non-conventional and alternative energy sources for self-consumption and promote cleaner energies, the company plans to incorporate 400 megawatts by 2023. Currently, 208 megawatts are in operation, and another 200 megawatts are under construction to deliver on the set target. Regarding social matters, in addition to the milestones previously mentioned by Diana, the following stand out: 4,298 non-oil jobs generated contribute to diversification of local economies, and 55,659 students benefited through quality and educational coverage projects. In terms of governance, the company maintains solid and transparent corporate governance with a level of independence of 78% of its Board of Directors and 33% female representation. This guides the fulfilling of the company's strategy and is evaluated in indexes such as the Dow Jones Sustainability Index, where Ecopetrol Group aims to maintain or improve the corporate governance rating obtained in 2022. Please move on to the next slide. During the first half of 2023, we achieved outstanding financial indicators amid an environment of lower crude oil and refined product realization prices. Roche recorded its second-best result since 2016 and closed the semester at 14.8% above the target of 10% for the year and higher than the average of around 11% reported by peer companies to date. The impact of higher fiscal contributions and the increase in capital employed was partially offset by higher operating income in the last 12 months. The EBITDA margin was 44.3%, mainly explained by the lower average rent price compared to the first semester of 2022 and the lower cracks of refined products, diesel, gasoline, and jet, which was partially offset by the net effect on revenues and purchases associated with the higher average exchange rate. Likewise, there was an increase in activity costs and operating expenses associated with the increase in activity in terms of production, refinery throughputs, and transported volumes, as well as some inflationary effects. During the semester, Ecopetrol Group recorded a higher EBITDA margin compared to its peer companies, which reported an average margin of around 34%. Regarding EBITDA by business line, a 78% contribution of hydrocarbons stands out, underpinned by the upstream and midstream segments. Transmission and toll roads contributed with 16% of the EBITDA, mainly associated with the results of the energy transmission segment. Finally, low emissions contributed with 6% of the EBITDA, explained by a higher gas contribution. The gross debt to EBITDA indicator remained stable at 1.6 times, below the target of 2.1 times for the year. The debt-equity ratio was 1.1 times, primarily due to higher financing U.S. dollars acquired mainly by Ecopetrol S.A. in the first half of the year. During the first half of 2023, Ecopetrol Group generated an operating cash flow of COP5.2 trillion as a result of the solid operating performance and the positive effect of the average exchange rate, which offset lower organizations prices and the inflationary effect on cost. Operating cash flow accounting for the balance of FEPC, which I'll explain in detail later will be COP18.2 trillion at the end of the semester. Please move on to the next slide. In the first half of the year, Ecopetrol's organic investments amounted to COP12.3 trillion, the highest half-year figure in the last seven years, 41% above what was executed in the first half of 2022, and in line with the target for 2023 of between COP25.3 trillion and COP29.8 trillion. This demonstrates the company's execution capacity in line with the target set out for the four pillars of the 2040 strategy and contributes to our commitment to the economic growth of Colombia and the other countries where we operate. The hydrocarbons business line is a strategic priority for the company and as an enabler of investments in the energy transition, closed the semester with a solid execution for COP8.4 trillion, representing 69% of the group's investments. These investments were represented in growth projects throughout the integrated chain, both in Colombia and the United States. The investments in low emission solutions and TESG closed at COP1.5 trillion, of which approximately COP1.3 trillion were allocated to gas projects focused on assets located in the Piedemonte and other exploratory blocks. In TESG, resources were allocated to decarbonization projects, efficient water management and operations, energy efficiency, fuel quality, and hydrogen. Investments in the transmission and toll roads business line amounted to COP2.4 trillion and corresponded to projects executed by ISA in energy transmission, toll roads, and telecommunications. These investments allowed progress in the construction of the electric circuit and improvements aimed at increasing the reliability of the existing network, as well as in Ruta del Loa, Ruta de la Araucania, and Ruta de los Rios road projects in Chile. Please move on to the next slide. At the end of the first half of 2023, Ecopetrol recorded a consolidated cash position of COP13 trillion, explained first by an operating cash flow generation of COP5.2 trillion, mainly associated with higher sales volumes due to higher production, the solid performance of the midstream and downstream segments, as well as energy projects. This was partially offset by the increase in working capital, mainly due to the accumulation of the FEPC account and the payment of income tax in some subsidiaries. Secondly, the outflow of investment resources for organic activities amounted to COP10.7 trillion, mainly made by Ecopetrol and its subsidiaries, Permian, ISA, and CENIT. And thirdly, the outflow of resources for the payment of dividends for COP2.6 trillion to minority shareholders and subsidiaries. Regarding the management of debt maturities for 2023 at Ecopetrol, we continue to advance in the refinancing strategy with which in June it carried out a partial disbursement of close to COP693 billion from the financing line with Bank Colombia, the prepayment of debt maturing in 2023 for $305 million, the issuing of bonds in the international capital markets for $1.5 billion, and the launching of the repurchase offer for around $822 million plus interest for the prepayment of the remainder of the international bond issued in 2013 executed in August. As a result, the balance on maturities for 2023 at the end of August is close to $198 million, corresponding to principal installments of long-term debt. As for the average cost of debt, between the end of the first half of 2022 and the first half of 2023, the cost increased by 28 basis points and closed at approximately 6.07%, which represents a highly controlled growth despite the generalized context of higher international interest rates. It is also noteworthy that, despite the higher costs, average exchange rate, and indebtedness, the increase in financial expenses between these periods was only 1%, reflecting the company's ability to manage its debt even in a challenging rate environment. The company does not expect a substantial increase in the cost of debt for the remainder of 2023. Regarding the FEPC balance, the account receivable closed at COP30.9 trillion, reflecting an accumulation of COP13 trillion during the semester. Likewise, compensation was made without transfer of resources between the balance receivable from the FEPC account and the dividends in favor of the nation for COP8.4 trillion, leaving an amount of COP13.2 trillion pending for compensation. It is important to mention that, thanks to adjustments in the price of gasoline and the price environment, the monthly accumulation of the FEPC has been decreasing and is expected to be below COP1 trillion per month in the second half of the year. Finally, it is important to reiterate that the financial priorities of the Ecopetrol Group continue to be value generation through the delivery of the investment plan, proactive and competitive debt management, and the distribution of dividends as cash conditions allow. I will now pass the floor to Yeimy Baez, who will give us more details about the Low Emission Solutions business line.

Thanks, Jamie. In the first half of the year, gas LPG production reached 160,000 equivalent oil barrels per day, 22% of the Group's production mix. This business delivered an EBITDA of COP2,142 billion, with an EBITDA margin of 47%. Our continued efforts to decarbonize our operations were bolstered by the implementation of a wide range of initiatives and investment projects in low-emission solutions, aiming to significantly contribute to our strategic objectives. I would like to highlight the reduction of fuel and gas from Pizzorama and other fields by the means of connecting them to the gas market to offer additional volumes of about 1,400 MBTU per day. This initiative allows us to reduce emissions by more than 36,000 tons of CO2 equivalent per year. We also implemented energy efficiency initiatives that led to a reduction of 5 gigawatt hours, 2 megawatts of consumption, equivalent to the electricity consumption of 16,000 households, and another 110 gigabits of thermal energy. Energy management operational control and the use of slurry and bending of gas for self-generation of energy resulted in reduced emissions. We continue to work on sustainable mobility during the second quarter of 2023. First, we started to deliver financial support to natural gas vehicles with the gas truck program, a fund of COP730 billion that includes an endowment from Ecopetrol. Second, our subsidiary renewed its transportation fleet with four new gas-powered trucks in its operations. And finally, we delivered the first hydrogen refueling to a public transportation bus in Bogotá for commissioning tests. With the support of these efforts, it is estimated that all these initiatives in sustainable mobility will achieve a reduction of more than 570 tons of CO2 per year. I'll give some further remarks on our capital efforts to improve the wellbeing of the Colombian people. To date, the program to connect communities to the natural gas network has delivered 4,843 connections, positively impacting families in rural areas of Atlantico and Casanare, which have been the main vehicles to meet the target. We also signed new agreements that will allow us to expand the program coverage to connect another 4,000 families in 2023. In addition, we extended the operation of the micro LNG plant in Buenaventura until November, providing reliability of gas supply to 37,000 families in this area. The company has done a significant amount of work to enrich its renewable energy portfolio. To that end, new technologies have been introduced to our opportunities panel, such as biomass, geothermal, and small-scale hydropower. The operation of Brisas, Castilla, and San Fernando solar farms, as well as the Cantayus Small Hydroelectric Plant, allows us to reduce 5,883 tons of CO2 equivalent and save COP6,950 million in the second quarter of 2023. We're also making progress in the construction of new photovoltaic capacity in Cartagena (23 megawatts), La Cira (56 megawatts), Copey, Ayacucho, and Vasconia solar farms with 15 megawatts and Caucasia with another 7 megawatts, which will contribute to the incorporation of 101 megawatts into our renewable energy metrics by the end of 2022. Finally, last June, we held an energy transition event for three days, where more than 3,000 people, including Ecopetrol employees, international and local leaders, and experts, gathered to share knowledge of the national and global context, industry experience, technological trends, and challenges of the energy transition. We continue to leverage our architecture for business lines, trending in the strategic pillar of cutting-edge knowledge, as part of our 2040 strategy. I'll now pass the floor to Alberto, who will talk about the main operational updates.

Thank you, Yeimy. Progress in the 2023 exploratory campaign reached 40% by the end of this semester. We completed the drilling of 10 exploratory wells, seven of which have hydrocarbon potential and are located in the Llanos Orientales, having gas condensate potential in the Piedemonte Foothills, and one with natural gas potential in Northern Colombia in Cordoba. For this quarter, I would like to highlight the announcement we made about the success of the Tinamu-1 exploratory well operated by Ecopetrol, located in Castilla la Nueva in the Department of Meta, confirming the presence of 15 degrees API heavy crude oil. Extensive testing is planned to begin in the third quarter of 2023. We made important progress in the assessment of onshore discoveries in Northern Colombia. The early production connection of the Coralino-1 discoveries to existing infrastructure is underway. Extensive testing is expected to begin by the end of 2023 for potential commerciality in 2024. With regards to the Flamencos discovery located in the Mid Magdalena Valley, Flamencos is now commercially viable, and the production license is expected to be awarded during the second half of 2023 to proceed with the extension of commerciality for Flamencos 2,1,3 wells. Finally, extensive tests are being carried out in the Upper Magdalena Valley on the El Nino-1 wells and in CPO9 on the Col-1 and Lorito wells. Progress in offshore exploration activity in Colombia includes assessing the results of the Gorgon-2 appraisal well and the drilling of the Glaucus-1 well in the same area, which is expected to reach total depth in the second half of this year. Additionally, we continued with pre-drilling activities of the Orca Norte-1 well as part of the appraisal process of the Orca discovery, and with the planning of the appraisal campaign of the Uchuva discovery to start in 2024. As part of the ongoing consultation with government agencies, mediation agreements were signed with the National Hydrocarbon Agency concerning controversies regarding exploration and production agreements for the Magdalena areas. Let's go to the next slide, please. During the second quarter of this year, we achieved production of 728,000 barrels of oil equivalent per day, up 3.3% versus the same quarter of 2022, driven by solid performance in Rubiales and positive results of the drilling campaigns at Cano Sur and Permian. These results were obtained despite the negative production impacts of around 6,400 barrels of oil equivalent per day during the second quarter of the year due to social unrest issues, including pipeline closures, as well as load restrictions and the temporary shutdown of the gas plant due to attacks on the Cano Limon Covenas pipeline. We continue to make progress in decarbonizing our upstream segments. During the first half of the year, we highlighted the development of projects that will eliminate emissions at the production facilities in line with our commitment to reduce methane emissions by 2045. During this period, the upstream segment succeeded in reducing 141,000 tons of CO2 equivalent emissions, which is above expectations for the semester. Let's go to the next slide, please. After three years of operations in the Permian, the joint venture between Ecopetrol and Oxy reached record production at the end of May of 100,000 barrels of oil equivalent per day before royalties, with approximately 62,000 barrels of oil equivalent per day corresponding to Ecopetrol's participation. In addition to the production in the Midland Basin, we highlighted the start of production in the Delaware area, after drilling and completing the first 19 wells. During the second quarter of 2023, we drilled 22 new wells, totaling now 279 wells and reaching a net production for Ecopetrol before royalties of 58,700 barrels of oil equivalent per day. By the end of the year, more than 110 wells are expected to be drilled, and production should reach an annual average daily production in the range of 62,000 to 64,000 barrels of oil equivalent per day before royalties for Ecopetrol. On the TESG front, Permian assets maintain low carbon intensity based on zero routing flaring. Methane monitoring continues at production facilities, along with other practices such as tankless storage facilities to reduce emissions at the source. Please continue to the next slide. For the Midstream segment, transported volumes increased year-on-year by nearly 20,000 barrels per day, primarily as a result of higher crude oil production in the Llanos region, greater availability of both refineries as well as operational optimizations in the refined product transport systems. So far this year, 10 reversal cycles have been carried out in the Centenario pipeline, ensuring the evacuation of production from the Cano Limon field. Likewise, an alternative route was implemented to evacuate condensed crude from Gibraltar and unloaded operations at a heavy crude diluent. The bottlenecking production of approximately 30 million cubic feet of gas in the Gibraltar field. During the second quarter, Senate continued to perform a cabotage operation from the Buenaventura Maritime terminal to the Tumaco terminal, supplying part of the demand for products in this region of the country affected by restrictions on the Pan American Highway. In line with our TESG strategy, after three years of work led by Ocensa in partnership with Oleoducto de los Llanos Orientales, ODL, Oleoducto Bicentenario Colombia, OBC, and other regional entities, we highlighted the completion of the Vida Manglar project, which restored and rehabilitated 39.2 hectares of mangrove in the Cispata Bay in Cordova, contributing to the natural regeneration of the area. Finally, the Ministry of Mines and Energy, through the issuance of Resolution 279 of 2023, temporarily suspended the updating of crude oil transport tariffs that take place in July of each year. Therefore, the current tariffs will remain in force until the tariffs for the following period are set in accordance with the terms established by the regulator. Let's continue with the next slide, please. In the Downstream segment, the Cartagena refinery achieved a record quarterly throughput of 209,000 barrels per day, thanks to the continuous operation of the Cartagena crude oil plant interconnection project, as well as the high operational availability of the plants. During the quarter, we reached an integrated throughput of 427,800 barrels per day, a 17% increase versus the same period in 2022. In line with our commitment to contribute to the improvement of air quality in Colombia and deliver cleaner fuels, we highlight the record production of diesel, gasoline, and jet fuel for local supply in compliance with resolution 40103 that establishes the fuel content limits for Colombia. In Q2 2023, we reached an integrated refining gross margin of $14.4 per barrel as a result of higher refinery throughput, with plant availability levels surpassing 96%. Compared to Q1 2023, margins were mainly affected by a contraction in global demand, reflected in lower diesel and jet fuel prices and higher crude oil prices. By the end of the year, margins are expected to remain at the double-digit level. In addition, scheduled maintenance will be carried out at both refineries during the second half of the year, ensuring the reliability and integrity of our operations. During the quarter, we made progress in achieving various milestones, of which I would like to emphasize the maturation of the project to produce sustainable aviation fuels and renewable diesel in the Barrancabermeja refinery, contributing to the decarbonization of the aviation sector. The start-up of the electrolyzer project in Esenttia aims to generate hydrogen from water using solar panels as an energy source to partially cover the operation's self-consumption. The execution of the 5G technology in Barrancabermeja refinery aims to implement industrial technology solutions in the operation, which will enable efficiencies in maintenance and operation processes. We continue to advance on the zero-fuel oil path, initiating production of AC-30 quality asphalt from the Barrancabermeja refinery, opening new market opportunities. Let's move on to the next slide, please. During the first half of the year, efficiencies of COP1.6 trillion were achieved, of which COP1.1 trillion contributed to mitigate the inflationary effects that continue to impact costs and expenses. On this front, I would like to highlight the multiple initiatives that have allowed us to optimize dilution and evacuation costs of heavy and extra-heavy crude oil. The implementation of production strategies has contributed to reducing lifting costs, as well as energy efficiency strategies, with the use of technology solutions and self-generation. Lifting costs as of June 2023 amounted to $9.41 per barrel, a year-on-year increase of $0.13 per barrel, mainly attributed to inflationary effects on energy targets, well services, and chemical treatment, whose impact was mitigated due to achieved efficiencies of $0.24 per barrel. Refining cash costs decreased by 14% compared to the first half of 2022, explained by increased throughput and exchange rate variances, offsetting higher costs from greater operating activity and inflationary effects. The cost per barrel transported as of June 2023 was $2.76 per barrel, which remains stable versus the same period of 2022, primarily due to the aggregate effect of higher operating costs, a greater average exchange rate evaluation against the U.S. dollar, and additional volume transported. The total unit cost as of June 2023 reached $45.6 per barrel, a 14.7% decline compared to the same period of the previous year, mainly resulting from the effect of a higher exchange rate and an increasing traded volume. It should be noted that there was a COP700 per dollar year-on-year increase in the average exchange rate in this period, impacting approximately COP340 billion in operating costs and expenses. I now give the floor back to our CEO, Ricardo Roa.

Thanks, Alberto. The Transmission & Toll Road business line generated positive operating and financial results in the first half of the year. These results were primarily sustained by the energy business in Brazil and Colombia and toll roads in Chile, contributing to 10% of the group’s revenues, 16% of EBITDA, and 8% of net income for the first half of the year. The milestones for the quarter include the allocation of two logs awarded in energy transmission by the Brazilian National Electric Agency, as well as six extensions in Brazil and one connection in Colombia. The startup of the UPME 07, 2017 Sabanalarga-Bolivar project, and the inception of the SmartValves operation in the Santa Marta substation support reliability and connection of renewable energies. This project will represent additional revenues of $10 million. ISA continues advising in the construction of 34 energy transmission projects, which represent the addition of 4,825 kilometers of transmission lines to the network and will generate revenues of approximately $260 million when they enter into operation. Finally, progress continues in the execution of additional works Ruta de los Rios and Ruta de la Araucania concessions, which will generate new revenues and extend the terms of these concessions. I would like to highlight that in this first half of 2023, Ecopetrol demonstrated exceptional resilience and solid operational capabilities within a challenging landscape. This was achieved through hard work, dedication, as well as years of support and commitment from every member of our organization. Due to the devotion of our team worldwide and productivity to recognize strategic opportunities, we continue to ensure sustainable growth with historical execution of the investment plan. In Colombia, from the production fields to the offshore stations in the Caribbean, and globally from Chile through our Transmission & Toll Roads business line to our trading company in Singapore. We will continue to focus on delivering operational excellence, innovation, and commitment to the energy transition. With great enthusiasm, we invite you to celebrate with us on September 15th, the 15th anniversary of our listing on the New York Stock Exchange. We will hold an event to share our achievements, financial results, and prospects, as well as the path to our 2040 strategy. Finally, I wish to extend my gratitude to all our employees and investor partners for their continued support, and to all of you who participated in this conference call today. Thank you for your time. I now open the floor for questions.

Our first question comes from Andres Cardona from TD Bank. Mr. Cardona, you may proceed with your question.

Good morning. Thank you for this opportunity. I have two questions. The first one is with respect to the EBITDA margin in the downstream segment. I understand there is an impairment because of the sales and the reduced margins of petrochemicals. But I would like to understand if there are nonrecurring events, perhaps losses from revaluation of inventories that would explain this impairment of the segment. My second question is if you have estimated the present value of the indemnity for the Reficar project, and could you give us the perspective of the company regarding the possibility of recovering these resources? It has been published in the media, and also by the Minister of Mines, is there any possibility of waiting for new auctions for oil fields in Colombia? Thank you.

Andres, good morning. Thank you for your question. With respect to the first one, about the effect on the EBITDA in the downstream segment and inventories, I would say that this year, we had an inventory effect; an accumulation in the first month of the year with a drop in the next. Overall, the impact on inventories amounted to $5 million. Talking about the refineries, the inventory effect we’ve had cumulatively in the first half of the year has been positive. In the case of Barranca, we had an accumulation of volumetric inventory because of a drop in demand. But in general, both Cartagena and Barranca have had positive inventories. In the whole Downstream segment, to give you an idea, the cumulative inventory between Cartagena and Barranca was $27 million positive, and the EBITDA was $1,020 million, so the inventory effect this semester reflects about 2% of EBITDA. We haven't had any adjustments or one-time adjustments; you may complement this.

Thank you. Yes. Regarding the downstream, I don't have much to add to what Diana said. We don't have any exceptional material issues in the second quarter. What you have seen in terms of margin is just a reflection of the changing environmental conditions, but still, the downstream margins remain very appealing and competitive. I would say that, in respect to your question about Reficar, following recent favorable rulings for the refinery dispute with CBI, this gives rise to potential expectations of recovery in the future. The steps to follow are first that the ruling is made firm. This is something we'll be expecting by the end of the year. Once we have firm ruling, we'll be able to formalize several procedures for the recovery of those funds with the counterparty. To the extent that the strategy for recovery and dialogue with the counterparty sheds light on the matters of this recovery, we will adjust the financial statements to reflect that expectation in an educated manner. That's all I can say now.

Regarding the living situation from the Ministry of Mines and Energy, is there a possibility for new routes for awarding areas for exploration and search for gas and oil? Is this still a public policy of the government or will it depend on the Ministry of Mines and Energy and whoever is the head of the ministry? Also, the analysis and exercises regarding the macroeconomic implications and the participation of the Ministry of Finance and Public Credit.

What we have been doing rigorously is participating in technical groups with representatives of these entities to demonstrate our contracts that are enforced to undertake the search. We have been making some announcements that are small but important.

Thank you for your answers. Catherina does some work.

Good morning. I have two questions. The first one is related to your opinion regarding the mentions of the President of Colombia about Ecopetrol.

You can go ahead and ask.

Thank you. Well, good morning to you all. I have two questions. The first one is related to the announcement made by the President of Colombia regarding the strategy and the role of Ecopetrol in developing unconventional projects. He mentioned it, and I would like to understand if Ecopetrol will absorb projects that had been abandoned by other companies due to community challenges. What is the plan for the role that the government has mentioned for Ecopetrol's involvement in these projects? My second question pertains to a recently unveiled document that outlines the roadmap for energy transition, indicating the possibility that we might need to import gas. Considering the current reserves differ from those presented in the 2020 plan, I would like to know your opinion on those figures and how they align with Ecopetrol's expectations. Have there been any changes in expectations related to those plans?

Thank you, Catherine, and welcome to this conference. In the context of the possibility of Ecopetrol becoming an important factor in developing power generation from unconventional sources of non-renewable energy, we cannot ignore the great potential in this region's energy with solar radiation. These potentialities are determined and they also constitute one of the plans of our corporate role in the 2020-2040 roadmap. Based on these energy resources, it is possible to think about energy developments in the transition, such as green hydrogen and methanol. We foresee investments and potential for development in this roadmap. We cannot ignore these opportunities, and they will be part of our access to economic decisions at Ecopetrol, which is called capital discipline. Each of these opportunities will be developed as they are defined and thoroughly studied, as part of our premises and principles laid out in this discipline.

Thank you, Mr. President, and thank you, Catherine, for your question. The Ministry of Mines and Energy recently published a draft of the roadmap for energy transition, which includes a thorough diagnosis based on government observations since 2022 and part of 2023, along with dialogues conducted throughout Colombian territory. The diagnosis highlights several points where we are fully aligned with the government's vision and Ecopetrol's corporate role in three key areas: the relevance of renewable and conventional energy sources for the country; the importance of natural gas in its fundamental role in the energy transition; and the need for a gradual transition process. With respect to gas, I'll go back to something we mentioned in a previous call about simplifying our three types of resources: reserves with high probabilities of development and production, contingent resources with more uncertainty, and prospective resources with even greater uncertainty. When assessing the scenarios mentioned in your question, it is evident that, considering reserves alone, they are insufficient to meet all the medium-and-long-term gas demand. This aligns with our figures, reflected in the conclusions of the roadmap and Ecopetrol's strategic plan. It's essential to develop the discoveries we've announced recently in the offshore basin to access the contingent and prospective resources. The roadmap indicates that to reverse this situation, we must continue investing in gas offshore.

Thank you.

The next question comes from Daniel Guardiola from BTG. The floor is yours.

Thank you. Good morning, Ricardo. May I have a couple of questions? The first is about the production of unconventional oil. Considering that type of reservoir has yielded good results for Ecopetrol, can you share the expectations for production for the closeout year and what CapEx you plan to allocate for the next two years? Also, do you see a risk of interference from the Colombian government to change this development already planned for production essentially in the Permian Basin? My second question pertains to ISA. Recently, there was a shareholder assembly where some modifications to the Board of Directors were made. I would like to know if you are considering any changes in the management of ISA.

Daniel, good morning. This is Alberto Consuegra. Regarding unconventional production, I can say that Permian continues to be a very profitable asset where we have all our focus and expectations. Production for the first half of the year has been very good, and the perspective for the rest of the year is between 62,000 and 65,000 barrels of oil equivalent. The good news is that we continue with significant activity, and we hope to end up with 110 drilled wells. We already have established wealth in Delaware and additional activity in Delaware besides Midland. The capital investment for this year is about COP1.2 trillion, with a similar investment planned for next year. Permian is a source of significant focus for us, and as we have stated, it's a highly profitable asset with EBITDA margins exceeding 70%. Regarding your second question on potential interference from the Colombian government on businesses within Ecopetrol's portfolio, I've just returned from Permian, where I attended the Board of Directors meeting. The feedback from our partners on the business's profitability is robust. Decisions will always be made in line with legal and contractual obligations established in that partnership.

Thank you. The next question is from Andrés Duarte from Corficolombiana. Mr. Duarte?

Okay. I have two questions. The first concerns gas offshore and the roadmap that has been discussed. In the last conference call, I understood that what you were registering as offshore gas was viable at the current domestic and import prices. I would like to know what is still lacking for you to build the necessary infrastructure to bring it and register those reserves. What is the delay at this time for those additional configurations? My second question is to ask, if you could provide an update on the goals and objectives related to self-supplying electricity and hydrogen, or 'dirty' hydrogen for green hydrogen in the industrial processes that you have. As far as I understand, your objective regarding self-supply is to replace current usage, and it seems from what the President indicated that you would like to extend those lines further, beyond just self-sufficiency.

Thank you for your question. This is Yeimy Baez. First, regarding offshore gas, the potential we have in the Caribbean offshore is significant. As mentioned, we've found that the gas can be competitive at domestic market prices. The combination of these factors enables all projects related to this basin regarding gas to be well-ranked for capital allocation. To move these three opportunities toward contingent or discovered reserves, we need to carry out the necessary evaluation work through drilling wells and building facilities. As previously communicated, we have planned the drilling of seven offshore wells in the 2023-2025 timeframe. Currently, we are completing one of the two wells planned for 2023. Completion is expected in a few weeks, with the second well set to drill before year-end. Infrastructure and evaluation work are crucial, and when we finalize these aspects, we will be able to convert these volumes into reserves. Environmental licensing and consultations with communities are also key components, and we commit to doing this properly and methodically. We're on track to convert these volumes to reserves between 2025 and 2027, aiming for early-stage development by the end of the decade. Regarding renewables, I will briefly touch on our goals. In 2022, we closed the year with 208 megawatts of installed renewable energy capacity, primarily solar (99%) and 1% in small hydropower. Our next goal is to reach 400 megawatts by year-end 2023. By 2025, our target is to have around 900 megawatts operational by 2026. We're continuously managing the portfolio, including 101 megawatts currently being built. We're also collaborating on projects to add 99 megawatts in Rubiales, 25 megawatts from biomass at Villanueva, and several projects from small hydraulic plants. It seems we are on the right path to achieving that 400-megawatt target. In the medium term, as we explore hydrogen's potential for Ecopetrol and the country, it's clear that renewable and conventional energy will play a critical role. Therefore, the 900 megawatts are just the starting point. Projects in hydrogen that the refiners will implement will require around 250 megawatts of capacity. For the hydrogen business line, it's estimated that between 3 to 5 gigawatts will be necessary by 2030 and above 9 gigawatts or 10 gigawatts by 2040. As visible, there is significant scope and requirements for these developments at Ecopetrol.

We have set up self-generating projects of renewable sources that will complement our portfolio for self-generation in the hydrocarbon business upstream, midstream, or downstream. Our main objective in the medium term is, of course, to continuously evaluate profitability and competitiveness of these opportunities. The President mentioned that this is outlined in the roadmap for capital discipline. We are focused on building the required facilities for these projects, with thorough testing of different business cases set up to show that they are highly profitable.

The next question is from Bruno Montanari from Morgan Stanley.

Good afternoon. Good morning. Thanks for taking my questions. I have two queries here. Can you discuss trends in oil production for the second half of the year? Maybe address where you see upside risks and downside risks and what the main challenges are in finishing the year according to your most recent guidance? The second question is also interesting. Can you provide clarity on the level of returns you currently see on hydrogen operations or expected returns? How do they compare with the returns achievable in the hydrocarbon business? Thank you very much.

Bruno, good morning. Thank you for your first question. I will answer regarding production. My name is Alberto Consuegra, and I would like to share that we maintain our production forecast in the range that we have been providing you. By the end of the year, it will be between 720,000 and 725,000 barrels, hopefully leaning towards the upper range. In the first half, we have materially faced obstacles related to the environment. This trend could continue in the second half, but we will have scheduled maintenance in some of the production fields. This will not significantly impact our planning, but it is something to keep in mind. The third quarter looks promising with respect to production. However, there are factors that may not help us, such as planned maintenance and continuing environmental challenges. Thank you. Regarding potential opportunities in the hydrogen portfolio, we are focusing on those that enable us to have a more sophisticated link in the supply chain and that have synergies with our hydrocarbon business. This means we can achieve profitability rates that could exceed the double-digit mark. The most evident example is the two projects underway at the Cartagena Refinery. In these projects, we build facilities to produce green hydrogen derived from non-conventional renewable sources, primarily aimed at producing clean fuel such as diesel and gasoline without sulfur, but also producing more sophisticated products like green methanol. Colombia heavily imports methanol, which is used in industrial processes, and replacing it with a local, less carbon-intensive product is a significant opportunity. When we combine all these elements into the business case, we see viable operations with competitive returns. The medium-and long-term challenges for Ecopetrol, as well as for all companies venturing into the realms of green and blue hydrogen worldwide, hinge on ensuring attractive profitability rates for such projects.

To offer a group perspective, what Jaime said is clear—we are pursuing competitive returns with a focus on capital discipline. We recognize that 70% of capital allocation is still predominantly directed towards hydrocarbon businesses, while 20% is aimed at transmission and roads, leaving only 10% for low emissions and renewables. In the short and medium term, gas will predominate in our low-emissions focus. As the hydrocarbon sector involves volatility during varying price cycles, we aim for sustainable returns over time. We’re optimistic that low-emission businesses can become competitive regarding returns and offer less volatility if the market and regulatory conditions allow.

Hi, thank you for taking my question. My first question historically, the company has been a solid dividend player. However, in 2023, with lower brand environment, higher CapEx, and increased income taxes from the country, we see a drop in capital allocation flexibility for the company. It would be beneficial to hear your views on capital allocation ahead – do you see payments being closer to the bottom or upper range of the 5% to 6% policy? Perhaps you could share your expectations for this year, looking ahead to the need for actions in the strategic plan and fuel pricing environment. My second question is regarding the discussions in the past months about possibly altering fuel prices calculation. Fuel prices have gradually increased over the past months. I’m curious to hear how discussions with the government have progressed on this front and your thoughts on future fuel pricing adjustments. How much of a gap do you still see relative to international prices, and on what timeline do you expect this gap to be adjusted?

I will take both questions. First of all, regarding CapEx, as you've noted, it's being executed well, and we are fully aligned to our expectations thus far. We hope to finish the year within the ranges mentioned previously, which is in the order of COP5.8 trillion to COP6.5 trillion. The allocation of that CapEx aligns with our 2040 strategy, with a 70% focus on hydrocarbon businesses, 20% on transmission, and 10% for low emissions. We do not expect surprises and this underlines the company's commitment to its growth. In response to your second question regarding the Fuel Price Stabilization Account (FEPC), the government has committed to adjusting domestic fuel prices consistently, and that commitment has led to noticeable improvements in the trends regarding the accumulation of FEPC itself. We hope these internal price adjustments will persist throughout the end of this year and into 2024 as part of the government's goal to align domestic prices with international prices by the end of 2024.

Thank you for your question. Regarding OPEC, the like has seen in the financial statements, the balance of OPEC as of this semester was COP31 million. In the second quarter, there was sufficient relevant data for last year, and we expect compensation will continue to be core at least based on our observations so far. The goal is to engage in discussions to avoid the balances accumulating beyond 12 months but also position the conversation correctly to give adequate maneuver space and for the government to understand the price evolution along with the adjustments. We believe this is a viable strategy to manage the fiscal framework. Public documents are available that detail the balance the government expects by year’s end and our plan to offset it next year. With that focus, we anticipate a significant reduction in the OPEC account by the end of next year.

Regarding our bond redemption, we financed the $832 million redemption through a portion of the $1.5 billion bond we issued thus far. This redemption is part of the refinancing effort we outlined to improve our balance maturity structure, enabling a smoother cash flow profile moving forward. We have already successfully managed the short-term refinancing issue through our previous capital market operations. As we look toward the remainder of the year, we are monitoring market conditions to determine if refinancing opportunities are sensible given the operational context.

Thank you for your question. There is a significant role for Ecopetrol in the supply of clean fuels to the country. Ecopetrol has historically ensured self-sufficiency in diesel and even has gasoline exports from the Cartagena Refinery. While there are instances of refinery shutdowns impacting our production levels, we typically maintain diesel and jet fuel supplies with sufficient export volumes. In contrast, gasoline demand in Colombia has doubled from 60,000 barrels per day in 2013 to 140,000 barrels or more today, requiring imports to fill the gap. Projects at the Cartagena Refinery aim to enable reductions in sulfur levels and improvements in gasoline octane through internal capacity expansions set to 2030 to meet regulatory requirements. In 2023, we have reduced import levels while actively pursuing expansion projects. As domestic demand remains high, additional gasoline imports are needed, particularly with demand projections holding steady. Thank you to all the participants, executives, and directors of Ecopetrol's team. I want to reiterate our commitment to the roadmap and investment portfolio for our medium and long-term strategy. Have a very good day. Thank you.

This is the end of our results conference for the second quarter of 2023. Thank you for your participation. You can disconnect now.