. . World news – CA – Ecopetrol S. . a. Announces an agreement between its subsidiaries Cenit, Bicentenario and Frontera

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BOGOTÁ, Colombia, November. 17, 2020 / PRNewswire / – Ecopetrol S.. a. (BVC: ECOPETROL; NYSE: EC) discloses according to this press release issued by its subsidiaries Cenit Transporte y Logística de Hidrocarburos S. a. s. And the Oleoducto Bicentenario de Colombia S.. . a. s. , Announcing that they have reached an agreement with Frontera Energy to file a joint petition for a binding settlement, which, upon completion and approval by the competent Colombian court, will resolve all pending disputes between them relating to the Bicentenario pipeline and Caño Limón – Covinas pipeline..

This arrangement is conditional on certain regulatory approvals, including approval of the settlement arrangement as conciliation under Colombian law, which requires the opinion of the Office of the Prosecutor (Procuraduría General de la Nación) and the approval of the Administrative Court of Cundinamarca.

CENIT and BICENTENARIO announce an agreement with Frontera to settle pending transportation disputes in Colombia

Cenit Transporte y Logística de Hidrocarburos S. a. s. (« CENIT ») and the Oleoducto Bicentenario de Colombia S.. . a. s. (« Bicentenario ») announced today that it has reached an agreement with Frontera Energy Corporation (« Frontera ») in order to file a joint petition for a binding settlement, which, upon completion and approval by the competent Colombian court, will resolve all pending disputes between them related to the line Bicentenario (« BIC Pipeline ») and Caño Limón – Coveñas Pipeline (« CLC Pipeline »), and will terminate all pending arbitration proceedings related to these disputes.. All Frontera affiliates participating in these actions are also parties to the agreement, and references to Frontera include such subsidiaries. All monies appearing in this press release are in US dollars, unless otherwise noted.

The two parties consider this transaction to eliminate any uncertainty related to the potential outcome of disputes, thus protecting the interests of all parties and the interests of stakeholders.. . The settlement will also create new business opportunities for the parties involved.

The settlement arrangement includes a complete and final release upon closing of all current and future amounts claimed by all parties in relation to the terminated transport contracts for both the CLC pipeline and the BIC pipeline, as well as in relation to contracts for the use of additional facilities.

The transaction does not include any cash payments between the parties, except for Frontera’s release of its interests in a (restricted cash) trust fund of about $ 28 million that was created as collateral for one of the claims.. Frontera will move to CENIT its 43rd. 03% interest in Bicentenario, i.e. related outstanding Bicentenario dividends, and the Bicentenario pipeline will be delivered to BIC, which also allows Bicentenario to offset a portion of its joint debt against certain outstanding accounts payable in favor of Frontera. Frontera claims include recovering the letters of credit that Bicentenario withdrew in 2018 and all other claims confirmed by Frontera against Bicentenario..

Frontera will also enter into new transport contracts with CENIT and its subsidiaries Bicentenario and Oleoducto de los Llanos Orientales S.. a. (« ODL »).

ODL’s new carriage contract provides for shipment or payment of commitment of approximately 10,000 barrels / day for a period of 3. 8 years for a current fee of $ 4. 0 / barrel.

The new transportation contracts with CENIT and Bicentenario for the use of the CLC pipeline and the BIC pipeline (and some related facilities) will take effect within six months from the close of the deal. A new shipment or payment commitment is expected to be around 3,900 b / d, based on the current oil price, for a five-year adjustable period, at the current tariff of $ 11.. . 5 / barrel. Frontera will not have to make payments for oil that would have to be shipped via alternative pipelines. These contracts will allow CENIT and Bicentenario to obtain payment of certain amounts included in the settlement, during the term of the contracts..

This arrangement is conditional on certain regulatory approvals, including approval of the settlement arrangement as conciliation under Colombian law, which requires the opinion of the Office of the Prosecutor (Procuraduría General de la Nación) and the approval of the Administrative Court of Cundinamarca, which is an appellate court also tasked with reviewing some of the arrangements To which state-owned companies are a party. The settlement documents state that if no such approvals are obtained by June 30, 2021 or any later date as agreed, then either party will have the right to terminate the settlement arrangement, and that the legal rights of the parties regarding the disputes are invalid.. There can be no guarantee that the required approvals will be received in a timely manner or at all.

Cenit is an Ecopetrol Group company dedicated to hydrocarbon transportation and logistics activities, leading the midway segment of the Colombian oil chain. It is the second largest company in the country by assets and among the top 10 companies in terms of operating revenues and profits in the country. It has nearly 9,000 kilometers of oil and multi-purpose pipelines that transport the majority of Colombia’s crude and refined products. It has three ports, 51 terminals, and seven loading and unloading berths. In turn, the companies of Oleoducto Central S.. A -Ocensa-, Oleoducto de Colombia S.. a. -ODC-, Oleoducto de los llanos Orientales S.. . A -ODL- and Oleoducto Bicentenario de Colombia S.. . a. s. All subsidiaries of Cenit.

Ecopetrol is Colombia’s largest company. It is a comprehensive oil chain company, one of the 40 largest oil companies in the world, and one of the four largest in Latin America . In addition to Colombia, which produces more than 60% of domestic production, it has exploration and production activities in Brazil, Peru and the United States (Gulf of Mexico).. Ecopetrol has the largest refinery in Colombia, most of the country’s oil network and pipelines and is significantly increasing its involvement in the biofuel sector..

This press release includes data on business prospects, estimates of operational and financial results and data on Ecopetrol’s growth prospects.. All are projections, and thus are based solely on the expectations of their manager about the future of the company and their continued access to capital to finance the company’s business plan. . The future perception of these estimates depends on market behavior, regulations, competition and performance conditions of the Colombian economy and industry, among other factors; As such, it is subject to change without notice.

For more information, please contact:
Media Relations (Colombia)
Jorge Mauricio Telez

Phone: 4329-234 571

Fax: 4480-234-571

Email: mauricio. tellez @ ecopetrol. Com. Share

Paula Aguilar Santos
Head of Corporate Communications

Cenit – Transporte y Logística de Hidrocarburos
Paula. aguilar @ cenit-transporte. Com

Tel: 57 (1) 319-8800 – Ext: 18725
http: // www. cenit-transporte. Com

Colombia

World News – CA – Ecopetrol S.. a. Announces an agreement between its subsidiaries Cenit, Bicentenario and Frontera
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Ecopetrol SA announces About an agreement among subsidiaries Cenit, Bicentenario and Frontera
Frontera announces agreement to resolve pending transport disputes in Colombia

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