Ecopetrol S.A. (EC), Colombia's state-controlled oil company, announced Friday that its board has approved an investment range of COP 22 trillion to COP 27 trillion (roughly $5.9 billion to $7.2 billion) for 2026. That's basically holding steady with where 2025 spending is expected to land, reflecting what the company describes as disciplined capital allocation across its business lines.

Following the Money

Here's where things get interesting. Of that total investment envelope, about COP 17.2 trillion—approximately 70% of the budget—will go toward keeping the oil flowing. The goal is to produce between 730,000 and 740,000 barrels of oil equivalent per day, which is no small feat in a mature production environment.

Ecopetrol also plans to maintain average refinery throughput of 410,000 to 420,000 barrels per day and transport between 1.11 million and 1.12 million barrels daily through its pipeline network.

The remaining COP 7.1 trillion—about 30% of the budget—will fund energy transition initiatives, power transmission projects, roads, and various corporate programs. It's worth noting that these projections assume Brent crude at $60 per barrel and an exchange rate around COP 4,050 per dollar, which are pretty conservative assumptions in today's market.

The Efficiency Play

Cost control is clearly front and center here. Ecopetrol is targeting an EBITDA margin of roughly 40%, consistent with 2025 performance, while projecting transfers to the Colombian government of about COP 28 trillion.

The company's Profitability and Efficiency Program is expected to deliver approximately COP 5.7 trillion in improvements across EBITDA, capital investments, and working capital management. The program should help keep refining, transportation, and lifting costs below $12 per barrel—a critical benchmark for staying competitive.

Production Strategy

Breaking down the exploration and production segment, Ecopetrol has allocated COP 14 trillion, with 89% earmarked for crude oil and 11% for natural gas. The company plans to leverage recovery technologies to hit that 730,000 to 740,000 barrel-per-day production target organically, with crude production in Colombia expected to rise enough to offset declining natural gas output.

The drilling program calls for 380 to 430 development wells (95% in Colombia, 5% in the United States) and eight to ten exploratory wells in Colombia. Meanwhile, refining operations will get about COP 1.7 trillion in investments—roughly 7% of the total budget—supporting that 410,000 to 420,000 barrel-per-day throughput target.

Recent Performance

Earlier this month, Ecopetrol reported third-quarter revenue of $7.46 billion, beating analyst estimates of $7.35 billion, with net income coming in at $700 million. The company's shares were trading down 0.66% at $9.80 on Friday.