Filed Pursuant to Rule
424(b)(2)
Registration Statement No. 333-256623
PROSPECTUS
SUPPLEMENT
(To prospectus dated May 28, 2021)
ECOPETROL S.A.
US$1,850,000,000 8.375% Notes due 2036
The
US$1,850,000,000 8.375% notes due 2036 (the “notes”) will constitute our general senior, unsecured and unsubordinated
obligations and will rank pari passu, without any preferences among themselves, with all of our other present and future senior,
unsecured and unsubordinated obligations that constitute our External Indebtedness (as defined in the accompanying prospectus). Although
we are 88.49% owned by the Republic of Colombia, or the “Nation”, the Nation is not liable for our obligations under the notes.
The notes will be issued only in registered form in minimum denominations of US$1,000 and integral multiples of US$1,000 in excess thereof.
The notes will mature on January
19, 2036 and will bear interest at the rate of 8.375% per annum. Interest on the notes will be payable on and of each year, beginning
on July 19, 2024. We may redeem the notes, in whole or in part, at any time or from time to time prior to their maturity, at the redemption
prices set forth in “Description of the Notes—Optional Redemption”. Upon the occurrence of a change of control repurchase
event as set forth in “Description of the Notes—Certain Covenants—Repurchase of Notes upon a Change of Control Repurchase
Event”, we will be required to offer to repurchase the notes from holders at the repurchase price described herein.
We intend to apply to have
the notes approved for listing on the New York Stock Exchange, or the “NYSE”.
Investing in the notes
involves risks. See the “Risk Factors” sections of our Annual Report on Form 20-F for the fiscal year ended December 31,
2022 (our “2022 Annual Report”), filed on March 29, 2023 with the Securities and Exchange Commission (the “SEC”),
and beginning on page S-12 of this prospectus supplement.
| |
Per Note | | |
Total | |
Initial price to the public(1): | |
| 99.441 | % | |
US$ |
1,839,658,500 | |
Underwriting discount: | |
| 0.150 | % | |
US$ |
2,775,000 | |
Proceeds, after underwriting discount, but before expenses, to Ecopetrol: | |
| 99.291 | % | |
US$ |
1,836,883,500 | |
| (1) | Plus accrued interest, if any, from January 19, 2024, if settlement occurs after that date. |
Neither the SEC nor any state
securities commission has approved or disapproved of the notes or determined if this prospectus supplement or the accompanying prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The notes will not be authorized
by the Colombian Superintendency of Finance (Superintendencia Financiera de Colombia or the “SFC” by its acronym in
Spanish) and will not be registered under the Colombian National Registry of Securities and Issuers (Registro Nacional de Valores
y Emisores) or the Colombian Stock Exchange (Bolsa de Valores de Colombia or the “BVC” by its acronym in Spanish),
and, accordingly, the notes will not be offered or sold to persons in Colombia except in circumstances which do not result in a public
offering under Colombian law and in compliance with Part 4 of Decree 2555 of 2010.
The underwriters expect that
the notes will be ready for delivery only in book-entry form through the facilities of The Depository Trust Company for the accounts of
its participants, including Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, société
anonyme, against payment in New York, New York on or about January 19, 2024.
Joint Book-Running Managers
BBVA |
BofA Securities |
Citigroup |
The date of this prospectus supplement is January
9, 2024.
TABLE OF CONTENTS
Prospectus Supplement
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is divided in
two parts. The first is this prospectus supplement, which describes the specific terms of this offering. The second part, the accompanying
prospectus, gives more general information, some of which may not apply to this offering. This prospectus supplement also adds to, updates
and changes information contained in the accompanying prospectus. If the description of the offering varies between this prospectus supplement
and the accompanying prospectus, you should rely on the information in this prospectus supplement. The accompanying prospectus is part
of a shelf registration statement that we filed with the SEC on May 28, 2021. Under the shelf registration process, from time to time,
we may offer and sell debt securities, guaranteed debt securities, ordinary shares or preferred shares, or any combination thereof, in
one or more offerings.
In this prospectus supplement
we use the terms “Ecopetrol,” “Ecopetrol Group,” the “Company,” “we,” “us,”
and “our” and similar words to refer to Ecopetrol S.A., a Colombian mixed economy company, and its consolidated subsidiaries,
unless the context requires otherwise. References to “securities” include any security that we might offer under this prospectus
supplement and the accompanying prospectus. References to “US$”, “$” and “U.S. dollars” are to United
States dollars. References to “COP$” and “pesos” are to Colombian pesos.
We have not authorized anyone
to provide any information or to make any representation other than those contained or incorporated by reference in this prospectus supplement,
the accompanying prospectus or in any free writing prospectus that we have prepared. We take no responsibility for, and can provide no
assurance as to the reliability of, any other information that others may give you. We are not making an offer of these securities in
any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus supplement,
the accompanying prospectus, the documents incorporated by reference herein or in any free writing prospectus is accurate as of any date
other than the respective dates of such documents. Our business, financial condition, results of operations and prospects may have changed
since such dates.
THE NOTES ARE NOT INTENDED
TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR
IN THE EUROPEAN ECONOMIC AREA (“EEA”). FOR THESE PURPOSES, A RETAIL INVESTOR MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A
RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU, AS AMENDED (“MIFID II”); (II) A CUSTOMER WITHIN
THE MEANING OF DIRECTIVE 2002/92/EC, AS AMENDED, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10)
OF ARTICLE 4(1) OF MIFID II; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN DIRECTIVE 2003/71/EC, AS AMENDED. CONSEQUENTLY, NO KEY INFORMATION
DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 (AS AMENDED, THE “EU PRIIPS REGULATION”) FOR OFFERING OR SELLING THE NOTES
OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE NOTES OR OTHERWISE
MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE EU PRIIPS REGULATION.
THE NOTES ARE NOT INTENDED
TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR
IN THE UNITED KINGDOM (THE “UK”). FOR THESE PURPOSES, A RETAIL INVESTOR IN THE UK MEANS A PERSON WHO IS ONE (OR MORE) OF:
(I) A RETAIL CLIENT AS DEFINED IN POINT (8) OF ARTICLE 2 OF REGULATION (EU) NO 2017/565 AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE “EUWA”); (II) A CUSTOMER WITHIN THE MEANING OF THE PROVISIONS OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (THE “FSMA”) AND ANY RULES OR REGULATIONS MADE UNDER THE FSMA TO IMPLEMENT DIRECTIVE (EU) 2016/97,
WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2(1) OF REGULATION (EU) NO 600/2014
AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF THE PROSPECTUS
REGULATION AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE EUWA (“UK PROSPECTUS REGULATION”). CONSEQUENTLY, NO KEY INFORMATION
DOCUMENT REQUIRED BY THE PRIIPS REGULATION AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA (THE “UK PRIIPS REGULATION”)
FOR OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE UK UNITED KINGDOM HAS BEEN PREPARED AND
THEREFORE OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE UK UNITED KINGDOM MAY BE UNLAWFUL
UNDER THE UK PRIIPS REGULATION.
Some of the market and industry
data contained or incorporated by reference in this prospectus supplement are based on independent industry publications or other publicly
available information, while other information is based on internal studies. Although we believe that these independent sources and our
internal data are reliable as of their respective dates, the information contained in them has not been independently verified. As a result,
you should be aware that the market and industry data contained in this prospectus supplement, and beliefs and estimates based on such
data, may not be reliable.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
STATEMENTS
This prospectus supplement,
the accompanying prospectus and the documents incorporated by reference herein and therein contain both historical and forward-looking
statements. All statements that are not based on historical fact are, or may be deemed to be, forward-looking statements. Forward-looking
statements are not guarantees of future performance and reflect our current expectations concerning future results, events, objectives,
plans and goals and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause
our actual results, performance or achievements to differ. These risks, uncertainties and other factors include, among others: changes
in international crude oil and gas prices, our exploration and production activities, including drilling; import and export activities;
our liquidity, cash flow and sources of funding; the results of our electric power transmission and toll roads activities through our
subsidiary, Interconexión Eléctrica S.A. E.S.P. (“ISA”); our projected and targeted capital expenditures and
other cost commitments and revenues; dates by which certain areas will be developed or will come on-stream; future growth and development
of the energy industry and its transition onto lower carbon sources of energy; general economic and business conditions, including volatility
in crude oil and other commodity prices, refining margins and prevailing exchange rates; competition; our ability to obtain financing;
our ability to find, acquire or gain access to additional reserves and our ability to develop existing reserves; uncertainties inherent
in making estimates of our reserves; the modification, adjustment or reduction of tariffs, rates or fees charged by the electricity transmission
businesses in the countries where they operate; significant political, economic and social developments in Colombia and other countries
where we do business; natural disasters, pandemics and other public health events; the ongoing Russian invasion of Ukraine; the Israeli-Palestinian
conflict; other military operations, terrorist acts, wars or embargoes; regulatory developments, including regulations related to climate
change; receipt of government approvals and licenses; technical difficulties; and other factors described in our press releases and filings
with the SEC, including our 2022 Annual Report and in the section entitled “Risk Factors” beginning on page S-12 of this prospectus
supplement. The forward-looking statements included or incorporated by reference in this prospectus supplement and the accompanying prospectus
are qualified in their entirety by this cautionary statement and are made only as of the dates of the respective documents. We do not
have any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances or for any
other reason. Accordingly, undue reliance should not be placed on forward-looking statements.
OTHER INFORMATION
Ecopetrol’s financial
information presented in this prospectus supplement has been prepared in accordance with International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”). Ecopetrol also files financial information with the SFC,
which is prepared in accordance with Colombian IFRS. Ecopetrol’s financial information under Colombian IFRS filed with the SFC is
not directly comparable to its financial information presented under IFRS-IASB in this prospectus supplement or its filings with the SEC.
Summary
This
section summarizes key information contained elsewhere, or incorporated by reference, in this prospectus supplement and
the accompanying prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere,
or incorporated by reference, in this prospectus supplement and the accompanying prospectus. You should carefully review the entire prospectus
supplement, including the risk factors, the financial statements and the notes related thereto, the unaudited pro forma condensed combined
financial statements included herein and the other documents incorporated by reference in this prospectus supplement and the accompanying
prospectus, before making an investment decision. Summaries in this prospectus supplement and the accompanying prospectus of certain documents
that are filed as exhibits to the registration statement of which this prospectus supplement is a part are qualified in their entirety
by reference to such documents.
Overview
We are the largest company in Colombia and one
of the most relevant integrated energy companies in Latin America, with a presence primarily in Colombia and activities in the United
States (U.S. Gulf of Mexico and Permian Basin), Brazil, Mexico, Peru, Chile and Bolivia. In Colombia, we are responsible for more than
60% of the hydrocarbon production, transportation, logistics, and hydrocarbon refining systems, and hold a leading position in the petrochemicals
and gas distribution segment. Through ISA, we have a strong position in the electric power transmission business, toll roads and telecommunications
sectors throughout Latin America. The Nation currently owns 88.49% of our voting capital stock. We are among the world’s largest
public companies, ranking 296 on the Forbes 2022 Global 2000 Ranking, and the largest Colombian company in this ranking.
Our address is Carrera 13 No. 36-24 Bogota, Colombia
and our telephone number is +57 310 315 8600. Our website is www.ecopetrol.com.co. Information included on or accessible through our website
does not constitute a part of this prospectus supplement or the accompanying prospectus.
See the “Our Corporate Strategy” and
“Our Business Overview” sections of our 2022 Annual Report, filed on March 29, 2023 with the SEC, for further information
about us.
Recent Developments
Management
On September 29, 2023, the Board of Directors
of the Company made the following appointments in senior management:
| · | Germán González Reyes as Vice President of Corporate Affairs and General Secretary, effective immediately. He has been
in charge of this vice presidency since July 5, 2023. He is a lawyer with a specialization in Socioeconomics from Universidad Javeriana
and a specialist in International Transportation Law. He has over thirty years of experience in the legal advisory profession and in managerial
and strategic public positions in oil & gas, telecommunications, drinking water, and sanitation companies. He has also served as Deputy
Minister of Communications. From 2017 until assuming this vice presidency, he was Manager of Legal Management in the Legal Vice Presidency
of Ecopetrol. |
| · | Sandra Lucía Rodríguez Rojas as Vice President of Sustainable Development effective from October 20, 2023. She is a
lawyer from Javeriana University, holding a master's degree in environmental policy and management, as well as a master's degree in public
law from Carlos III University of Madrid. She is a professor at the Faculty of Legal Sciences at Javeriana University. With over 20 years
of experience in overseeing human rights projects, social responsibility, and environmental sustainability, in accordance with international
standards, both in the public and private sectors. Since 2018, she has served as the Deputy Ombudswoman for Collective Rights and the
Environment at the Ombudsman's office. |
| · | Luz Elena Díaz García as Corporate Vice President of Compliance, effective from October 16, 2023, who will also serve
as the Compliance Officer of Ecopetrol S.A. She holds a degree in Finance and International Relations from the Externado de Colombia University,
and she is a specialist in Corporate Finance from CESA. With over 15 years of experience in ethical and compliance matters, internal control,
financial assurance, risk management, and due diligence, she has worked as a consultant in various economic sectors, most recently in
the oil and gas, energy, and consumer goods industries. She has led investigations on fraud, corruption, bribery, AML/CFT/Sanctions at
both public and private levels. |
2040 Strategy: “Energy that Transforms”
In 2022, the Ecopetrol Group
began working to re-align its current segments to the business lines defined in the 2040 Strategy and its work in the field of energy
transition. In that regard, for operational purposes, we began to realign our corporate operational divisions from: (i) Exploration and
Production; (ii) Transportation and Logistics; (iii) Refining, Petrochemicals and Biofuels; (iv) Sales and Marketing, and (v) Electric
Power Transmission and Toll Roads Concessions Exploration and Production, to the following: (i) Hydrocarbons, which includes the Exploration
and Production, Transportation and Logistics, Refining and Petrochemicals, (ii) Low Emissions Solutions, which includes exploration, production
and commercialization of gas, biogas, LPG, power, renewables, hydrogen, and Carbon Capture, Utilization and Storage (CCUS), and (iii)
Energy Transmission and Toll Roads, while maintaining Sales and Marketing as a cross-sectional front. During our quarterly reports for
2023, we accompanied financial information under our traditional business lines with financial information adjusted to the new business
lines. For purposes of this prospectus supplement, we continue to present our operational information under our traditional business lines.
We expect to reflect the new business lines at the operational and financial level in the 2024 annual report.
On September 11, 2023, Ecopetrol
announced certain adjustments to its 2040 Strategy initially presented in February 2022. Such adjustments were approved by the Board of
Directors of the Company and pertain to the following aspects of the strategy:
| 1. | The new strategic focus of the Caribbean offshore lever is to maximize gas potential in the Colombian
Caribbean offshore. |
| 2. | Unconventional hydrocarbon exploration activities will not be pursued in Colombia. |
| 3. | The previously defined strategic objective of “energy efficiency” has been replaced by optimization
of the internal consumption of energy to 25 petajoules (PJ) for the period 2018-2030. |
All other elements of the
2040 Strategy which were announced to the market in February 2022 remain unchanged. The long-term strategy reaffirms our commitment to
a just and equitable energy transition, emphasizing portfolio diversification while preserving the integrity and value of our traditional
business. Additionally, our focus remains on strict capital discipline to ensure profitable and sustainable growth in our business lines
and the creation of value for all our stakeholders.
Legal Proceedings and Related Matters –
Reficar
On
March 8, 2016, Refinería de Cartagena, S.A.S. (“Reficar”), a wholly owned
subsidiary of Ecopetrol, filed a Request for Arbitration before the International Chamber of Commerce (the “ICC”),
against Chicago Bridge & Iron Company N.V., CB&I (UK) Limited, and CBI Colombiana S.A. (jointly “CB&I”) concerning
a dispute related to the engineering, procurement and construction contract (“EPC contract”) entered into by and between Reficar
and CB&I for the expansion of the Cartagena refinery in Cartagena, Colombia. Reficar is the claimant in the ICC arbitration and seeks
no less than US$2 billion in damages plus lost profits.
On May 25, 2016, CB&I
filed its Answer to the Request for Arbitration and Counterclaim for approximately US$106 million and COP$324,052 million. On June 27,
2016, Reficar filed its reply to CB&I’s counterclaim denying and disputing CB&I’s claims and relief requested by CB&I.
On April 28, 2017, CB&I submitted its Statement of Counterclaim increasing its claims to approximately US$116 million and COP$387,558
million. On March 16, 2018, CB&I submitted its Exhaustive Statement of Counterclaim further increasing its claims to approximately
US$129 million and COP$432,303 million (including in each case interest), and also filed its Exhaustive Statement of Defense to Reficar’s
claims. On this same date, Reficar filed its Exhaustive Statement of Claim seeking, among others, US$139 million for provisionally paid
invoices under the Memorandum of Agreement (“MOA”) and Project Invoicing Procedure (“PIP”) Agreements and the
EPC Contract.
On June 28, 2019, CB&I
submitted its Reply to the Non-Exhaustive Statement of Defense to Counterclaim increasing its claims to approximately US$137 million and
COP$503,241 million (including in each case interest, respectively). On this same date, Reficar filed its Reply to CB&I’s Non-Exhaustive
Statement of Defense and its Exhaustive Statement of Defense to CB&I’s counterclaim, updating its claim for provisionally paid
invoices under the MOA and PIP Agreements and the EPC Contract to approximately US$137 million.
Between May 17,
2021, and June 16, 2021, the first two blocks of the merits hearing took place. On June 16, 2021, the Tribunal ordered the parties
to submit two post-hearing briefs, the first one on October 15, 2021, and the second one on November 5, 2021. Additionally,
the Tribunal scheduled the hearing for the parties to present their closing arguments on November 18 and 19, 2021.
The post-hearing briefs
were submitted on October 22, 2021, and November 10, 2021, respectively and on November 18, 2021, the parties presented
their closing arguments.
Later, on December 20,
2021, Reficar filed its Statement on Costs, and on February 11, 2022, CB&I filed its Statement on Costs.
On
June 7, 2023, in a unanimous decision against CB&I, the Tribunal awarded Reficar a payment of more than US$1 billion plus accrued
interests from December 31, 2015 and dismissed CB&I’s claims for approximately US$400 million. The decision of the Tribunal
may be subject to corrections and clarifications at the request of the parties. However, no such request has been submitted to
date. CB&I requested the annulment of the arbitral award the day after its issuance.
On September 8, 2023,
the Company learned of McDermott International’s intention to start financial restructuring proceedings for its CB&I subsidiaries
in the United Kingdom and the Netherlands, in the aftermath of the arbitral award issued by the International Arbitration Tribunal of
the International Chamber of Commerce against them and in favor of Reficar. Reficar has set in motion all relevant actions to obtain the
recognition and payment of the arbitral award in the United States, the United Kingdom, and the Netherlands. Simultaneously, it is participating
in McDermott International’s corporate restructuring processes in these countries to defend its interests.
Concurrent Tender Offer
Concurrently with the offering of
the notes hereby, we commenced an offer to purchase for cash (the “Tender Offer”) any and all of the outstanding 4.125% notes
due 2025 (the “Target Notes”), pursuant to the terms of, and subject to the conditions set forth under, an offer to purchase,
dated as of January 9, 2024, and related documents (the “Tender Offer Documents”).
The Tender Offer is conditional,
among others, upon our receiving the financing necessary for the payment of the purchase price offered thereby and accrued interest to
tendering holders, plus fees and expenses and other general conditions set forth in the Tender Offer Documents. We may waive these and
other conditions at our sole discretion. It is expected that funds will be made available to us upon the issuance of the notes offered
hereby.
BBVA
Securities Inc., BofA Securities, Inc. and Citigroup Global Markets Inc. are acting as dealer managers under the Tender Offer. For further
information and copies of the Tender Offer Documents, please contact the information agent Global Bondholder Services Corporation
at 212-430-3774 (collect) or at 855-654-2014 (toll-free).
It is expected that all 4.125% notes
due 2025 not tendered in connection with the Tender Offer will be discharged by us pursuant to the terms of the governing indenture, subject
to the satisfaction of certain requirements thereunder. We expect to use a portion of the funds from the offering of the notes for such
discharge.
THE OFFERING
The following is
a brief summary of certain terms of the notes. For a more complete description of the terms of the notes, including the covenants and
events of default contained in the indenture, see “Description of the Notes” in this prospectus supplement and “Description
of the Debt Securities” in the accompanying prospectus.
Issuer |
Ecopetrol S.A. |
Notes |
US$1,850,000,000 aggregate principal amount of 8.375% notes due January 19, 2036. |
Maturity |
January 19, 2036. |
Interest |
The notes will bear interest from January 19, 2024, the date of original issuance of the notes, at the rate of 8.375% per annum, payable semiannually in arrears on each interest payment date. |
Interest Payment Dates |
January 19 and July 19 of each year, commencing on July 19, 2024 |
Repurchase of Notes upon a Change of Control Repurchase Event |
We are required to make an offer to purchase all or any portion of notes outstanding held by holders upon the occurrence of a Change of Control Repurchase Event (as defined in “Description of the Debt Securities” in the accompanying prospectus) at a purchase price in cash equal to 101% of the principal amount of the notes so purchased, plus accrued and unpaid interest thereon and any Additional Amounts (as defined below) to but excluding the date of such purchase. See “Description of the Notes—Certain Covenants—Repurchase of Notes upon a Change of Control Repurchase Event” and “Risk Factors—Risk factors related to the notes—We may not be able to repurchase the notes upon a change of control repurchase event”. |
Optional Redemption |
At any time prior to October 19, 2035 (three months
prior to the maturity date of the notes, the “Par Call Date”), at our option, we may redeem the notes, in whole or in part,
at any time and from time to time, at a redemption price equal to the greater of (1) (a) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on the Par
Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points,
less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the notes, to be redeemed, plus,
in either case, accrued and unpaid interest on the notes to be redeemed to the redemption date.
On
or after the Par Call Date, we may redeem the notes from time to time, at a redemption price equal to 100% of the principal amount
of the notes being redeemed, plus accrued and unpaid interest thereon to the redemption date. Any notice of optional redemption may be
subject to satisfaction of one or more conditions precedent. See “Description of the Notes—Optional Redemption.”
|
Withholding Tax Redemption |
In the event that, as a result of certain changes in law affecting Colombia or any political subdivision or taxing authority thereof or therein, we become obliged to pay Additional Amounts, the notes will be redeemable, as a whole but not in part, at our option at any time at 100% of their principal amount plus accrued and unpaid interest, if any. See “Description of the Notes—Optional Redemption—Withholding Tax Redemption”. |
Ranking |
The notes will constitute our general senior, unsecured and unsubordinated obligations and will rank pari passu, without any preferences among themselves, with all of our other present and future senior, unsecured and unsubordinated obligations that constitute our External Indebtedness (as defined in “Description of the Debt Securities” in the accompanying prospectus). As of September 30, 2023, we had indebtedness of COP$109,728,676 million, all of which was unsecured debt, which we recognize in our consolidated financial statements at its amortized cost, which corresponds to the present value of cash flows, discounted at the effective interest rate. |
Use of Proceeds |
We expect the net proceeds from the sale of the notes will be approximately US$1,836,883,500 (after giving effect to the underwriters’ discount but before expenses). We intend to use the net proceeds of this offering to purchase the Target Notes tendered pursuant to the Tender Offer (and pay related expenses thereunder), and finance expenditures outside our investment plan. As of the date of this prospectus supplement, there were US $1,200,000,000 of the Target Notes outstanding. |
Further Issues |
We may from time to time, without notice to or the consent of the holders of the notes, create and issue additional debt securities having the same terms (except for the issue date, the public offering price and the first interest payment date) and ranking equally and ratably with the notes offered hereby in all respects, as described under “Description of the Notes—General”. Any additional debt securities having such similar terms, together with the notes offered hereby, will constitute a single series of securities under the indenture. |
Denomination and Form |
We will issue the notes in the form of one or more fully registered global notes registered in the name of a nominee of The Depository Trust Company (“DTC”). Beneficial interests in the notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Clearstream Banking, société anonyme and Euroclear Bank, S.A./ N.V., as operator of the Euroclear System, will hold interests on behalf of their participants through their respective U.S. depositaries, which in turn will hold such interests in accounts as participants of DTC. Except in the limited circumstances described in this prospectus supplement, owners of beneficial interests in the notes will not be entitled to have notes registered in their names, will not receive or be entitled to receive notes in definitive form and will not be considered holders of notes under the indenture. The notes will be issued only in minimum denominations of US$1,000 and integral multiples of US$1,000 in excess thereof. |
Taxation |
For a summary of certain United States federal tax and Colombian tax considerations relating to the purchase, ownership and disposition of the notes, see “Taxation—U.S. Federal Income Tax Considerations” and “Taxation—Certain Colombian Tax Considerations”, respectively. |
Trustee |
The Bank of New York Mellon. |
Listing |
We intend to have the notes approved for listing on the NYSE. |
Governing Law |
New York. |
Risk Factors |
Investing in the notes involves risks. See the “Risk Factors” sections of our 2022 Annual Report and beginning on page S-12 of this prospectus supplement, and other information included or incorporated by reference in this prospectus supplement for a description of certain risks you should consider before investing in the notes. |
SUMMARY SELECTED FINANCIAL AND OPERATING
DATA
The following table sets forth,
for the periods and at the dates indicated, our summary historical financial data, which have been derived from our unaudited interim
condensed consolidated financial statements presented in Colombian pesos as of September 30, 2023 and our audited consolidated financial
statements presented in Colombian pesos as of December 31, 2022. The information included below and elsewhere in this prospectus supplement
is not necessarily indicative of our future performance. The tables set forth below are derived from, and should be read in conjunction
with, our unaudited interim condensed consolidated financial statements as of September 30, 2023 and for the nine-month periods ended
September 30, 2023 and 2022 and the accompanying notes included in the current report on Form 6-K furnished to the SEC on January 9, 2024
and incorporated by reference into this prospectus supplement.
Our consolidated financial
statements for the years ended December 31, 2022, 2021 and 2020 included in the 2022 Annual Report and incorporated by reference in this
prospectus supplement were prepared in accordance with IFRS-IASB.
Our unaudited interim condensed
consolidated financial statements as of September 30, 2023 and for the nine-month periods ended September 30, 2023 and 2022 were prepared
in accordance with IAS 34 – “Interim Financial Reporting” as issued by the IASB.
| |
BALANCE SHEET | |
| |
As of September 30, | | |
As
of
December 31, | |
| |
2023(1) | | |
2023 | | |
2022 | |
| |
(unaudited) |
|
|
(audited) | |
| |
| (in thousands of
U.S. dollars) | | |
| (in millions of Colombian pesos) | |
Assets | |
| | | |
| | | |
| | |
Current assets | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
| 2,977,666 | | |
| 12,070,744 | | |
| 15,401,058 | |
Trade and other receivables | |
| 9,270,572 | | |
| 37,580,673 | | |
| 39,224,999 | |
Inventories | |
| 2,801,467 | | |
| 11,356,473 | | |
| 11,880,034 | |
Other financial assets | |
| 432,249 | | |
| 1,752,234 | | |
| 1,162,127 | |
Current tax assets | |
| 1,967,293 | | |
| 7,974,934 | | |
| 6,784,392 | |
Other assets | |
| 781,932 | | |
| 3,169,764 | | |
| 2,778,480 | |
Assets held for sale | |
| 7,282 | | |
| 29,519 | | |
| 45,755 | |
Total current assets | |
| 18,238,461 | | |
| 73,934,341 | | |
| 77,276,845 | |
| |
| | | |
| | | |
| | |
Non-current assets | |
| | | |
| | | |
| | |
Trade and other receivables | |
| 7,414,431 | | |
| 30,056,323 | | |
| 32,155,205 | |
Other financial assets | |
| 96,523 | | |
| 391,281 | | |
| 1,563,744 | |
Investment in associates and joint ventures | |
| 2,142,465 | | |
| 8,685,038 | | |
| 9,496,600 | |
Property, plant and equipment | |
| 23,542,919 | | |
| 95,437,342 | | |
| 100,997,498 | |
Natural and environmental resources | |
| 10,850,650 | | |
| 43,985,932 | | |
| 42,323,610 | |
Right-of-use assets | |
| 145,317 | | |
| 589,081 | | |
| 627,813 | |
Intangible assets | |
| 3,838,451 | | |
| 15,560,161 | | |
| 18,146,605 | |
Non-current tax assets | |
| 1,863,110 | | |
| 7,552,601 | | |
| 13,401,050 | |
Goodwill | |
| 1,224,720 | | |
| 4,964,720 | | |
| 5,350,114 | |
Other assets | |
| 399,776 | | |
| 1,620,593 | | |
| 1,453,347 | |
Non-current assets | |
| 51,518,362 | | |
| 208,843,072 | | |
| 225,515,586 | |
Total assets | |
| 69,756,823 | | |
| 282,777,413 | | |
| 302,792,431 | |
| |
BALANCE SHEET | |
| |
As of September 30, | | |
As
of
December 31, | |
| |
2023(1) | | |
2023 | | |
2022 | |
| |
(unaudited) |
|
|
(audited) | |
| |
| (in thousands of
U.S. dollars) | | |
| (in millions of Colombian pesos) | |
Liabilities and Shareholders’ equity | |
| | | |
| | | |
| | |
Current liabilities | |
| | | |
| | | |
| | |
Loans and borrowings | |
| 4,345,717 | | |
| 17,616,493 | | |
| 22,198,583 | |
Trade and other payables | |
| 5,862,892 | | |
| 23,766,756 | | |
| 19,937,704 | |
Provision for employee benefits | |
| 696,338 | | |
| 2,822,786 | | |
| 2,753,697 | |
Tax liabilities | |
| 736,131 | | |
| 2,984,097 | | |
| 7,630,901 | |
Accrued liabilities and provisions | |
| 257,376 | | |
| 1,043,342 | | |
| 1,533,136 | |
Other liabilities | |
| 533,609 | | |
| 2,163,122 | | |
| 2,728,317 | |
Liabilities related to assets held for sale | |
| 0 | | |
| 0 | | |
| 0 | |
Total current liabilities | |
| 12,432,063 | | |
| 50,396,596 | | |
| 56,782,338 | |
| |
| | | |
| | | |
| | |
Non-current liabilities | |
| | | |
| | | |
| | |
Loans and borrowings | |
| 22,722,653 | | |
| 92,112,183 | | |
| 92,936,256 | |
Trade and other payables | |
| 11,606 | | |
| 47,047 | | |
| 57,056 | |
Provision for employee benefits | |
| 2,343,101 | | |
| 9,498,368 | | |
| 10,211,542 | |
Deferred tax liabilities | |
| 3,478,006 | | |
| 14,099,000 | | |
| 15,275,644 | |
Accrued liabilities and provisions | |
| 2,844,942 | | |
| 11,532,712 | | |
| 11,223,358 | |
Other liabilities | |
| 781,218 | | |
| 3,166,872 | | |
| 2,403,148 | |
Total non-current liabilities | |
| 32,181,526 | | |
| 130,456,182 | | |
| 132,107,004 | |
Total liabilities | |
| 44,613,589 | | |
| 180,852,778 | | |
| 188,889,342 | |
Equity | |
| | | |
| | | |
| | |
Subscribed and paid in capital | |
| 6,176,998 | | |
| 25,040,067 | | |
| 25,040,067 | |
Additional paid in capital | |
| 1,630,017 | | |
| 6,607,699 | | |
| 6,607,699 | |
Reserves | |
| 4,421,260 | | |
| 17,922,725 | | |
| 8,898,633 | |
Other comprehensive income | |
| 3,111,423 | | |
| 12,612,959 | | |
| 15,796,719 | |
Retained earnings | |
| 3,464,239 | | |
| 14,043,195 | | |
| 29,811,809 | |
Equity attributable to owners of parent | |
| 18,803,937 | | |
| 76,226,645 | | |
| 86,154,927 | |
Non–controlling interest | |
| 6,339,297 | | |
| 25,697,990 | | |
| 27,748,162 | |
Total equity | |
| 25,143,234 | | |
| 101,924,635 | | |
| 113,903,089 | |
| |
| | | |
| | | |
| | |
Total liabilities and shareholders’ equity | |
| 69,756,823 | | |
| 282,777,413 | | |
| 302,792,431 | |
| (1) | Amounts stated in U.S. dollars have been translated for the convenience of the reader at the rate of COP$4,053.76
to US$1.00, which was the Representative Market Rate as of September 30, 2023, as reported and certified by the SFC. |
| |
INCOME STATEMENT | |
| |
For the nine-month period ended
September 30,
| |
| |
2023(1) | | |
2023 | | |
2022 | |
| |
(unaudited) | |
| |
| (in thousands
of U.S. dollars) | | |
| (in millions of Colombian pesos) | |
Revenue | |
| | |
| | |
| |
Domestic sales | |
| 12,514,610 | | |
| 55,201,320 | | |
| 60,962,385 | |
Foreign sales | |
| 12,058,632 | | |
| 53,190,026 | | |
| 58,936,409 | |
Sales revenue | |
| 24,573,242 | | |
| 108,391,346 | | |
| 119,898,794 | |
Cost of sales | |
| (14,706,847 | ) | |
| (64,871,173 | ) | |
| (65,458,241 | ) |
Gross profit | |
| 9,866,395 | | |
| 43,520,173 | | |
| 54,440,553 | |
Administrative expenses | |
| (761,965 | ) | |
| (3,360,989 | ) | |
| (2,844,627 | ) |
Operations and project expenses | |
| (887,762 | ) | |
| (3,915,872 | ) | |
| (2,833,523 | ) |
Impairment of non-current assets | |
| (2,522 | ) | |
| (11,125 | ) | |
| (5,516 | ) |
Other operating expenses | |
| (20,333 | ) | |
| (89,688 | ) | |
| (302,671 | ) |
Operating income | |
| 8,193,813 | | |
| 36,142,499 | | |
| 48,454,216 | |
Financial results | |
| | | |
| | | |
| | |
Finance income | |
| 404,623 | | |
| 1,784,771 | | |
| 887,398 | |
Finance expenses | |
| (1,761,628 | ) | |
| (7,770,455 | ) | |
| (5,875,877 | ) |
Foreign exchange (loss) gain | |
| 409,471 | | |
| 1,806,158 | | |
| (377,527 | ) |
| |
| (947,534 | ) | |
| (4,179,526 | ) | |
| (5,366,006 | ) |
Share of profits of associates and joint ventures | |
| 137,461 | | |
| 606,332 | | |
| 656,680 | |
Profit before income tax expense | |
| 7,383,740 | | |
| 32,569,305 | | |
| 43,744,890 | |
Income tax expense | |
| (2,601,905 | ) | |
| (11,476,872 | ) | |
| (16,214,065 | ) |
| |
| | | |
| | | |
| | |
Net profit | |
| 4,781,835 | | |
| 21,092,433 | | |
| 27,530,825 | |
Net profit attributable to: | |
| | | |
| | | |
| | |
Owners of parent | |
| 3,998,612 | | |
| 17,637,678 | | |
| 24,770,909 | |
Non–controlling interest | |
| 783,223 | | |
| 3,454,755 | | |
| 2,759,916 | |
Net profit | |
| 4,781,835 | | |
| 21,092,433 | | |
| 27,530,825 | |
| (1) | Amounts stated in U.S. dollars have been translated for the convenience of the reader at the average
exchange rate of COP$4,410.95 to US$1.00, which was the average Representative Market Rate from January 1, 2023 until September 30,
2023, as reported by the SFC. |
The following table presents our operating data for the periods indicated:
| |
OPERATING DATA (unaudited) | |
| |
For the nine-month period
ended September 30, | | |
For the year ended
December 31, | |
| |
2023 | | |
2022 | | |
2022 | | |
2021 | |
Refining | |
| | |
| | |
| | |
| |
Capacity(1) | |
| 464.8 | | |
| 464.8 | | |
| 464.8 | | |
| 404.8 | |
Throughput(1) | |
| 419.3 | | |
| 364.3 | | |
| 360.5 | | |
| 355.9 | |
Capacity utilization rate | |
| 90 | % | |
| 78 | % | |
| 78 | % | |
| 88 | % |
| |
| | | |
| | | |
| | | |
| | |
Proved reserves* | |
| | | |
| | | |
| | | |
| | |
Crude oil(2) | |
| 1,515 | | |
| 1,449 | | |
| 1,515 | | |
| 1,449 | |
Natural gas(3) | |
| 496 | | |
| 553 | | |
| 496 | | |
| 553 | |
Total oil and natural gas proved reserves(4) | |
| 2,011 | | |
| 2,002 | | |
| 2,011 | | |
| 2,002 | |
| |
| | | |
| | | |
| | | |
| | |
Production(5) | |
| | | |
| | | |
| | | |
| | |
Oil | |
| 555.5 | | |
| 537.7 | | |
| 541.8 | | |
| 527.1 | |
Gas | |
| 174.0 | | |
| 168.2 | | |
| 167.7 | | |
| 151.9 | |
Total Production | |
| 729.5 | | |
| 705.9 | | |
| 709.5 | | |
| 679.0 | |
| |
| | | |
| | | |
| | | |
| | |
Employees | |
| 19,389 | | |
| 18,900 | | |
| 18,903 | | |
| 18,378 | |
| |
| | | |
| | | |
| | | |
| | |
Electric Power Transmission and Toll Roads Concessions | |
| | | |
| | | |
| | | |
| | |
Transmission lines (km) | |
| 49,426 | | |
| 48,747 | | |
| 48,766 | | |
| 48,330 | |
| (1) | In thousands of barrels per day (bpd) as of December 31 or September 30, as the case may be. See
“Business Overview—Refining and Petrochemicals—Refining” in the 2021 Annual Report. Includes NGL. |
| (2) | In millions of barrels as of December 31. See “Business Overview—Exploration and Production—Reserves”
in the 2022 Annual Report. |
| (3) | In millions of barrels equivalent as of December 31, result of giga cubic feet (gcf) data divided by a
5.7 factor. See “Business Overview—Exploration and Production—Reserves” in the 2022 Annual Report. |
| (4) | In millions of barrels of oil equivalent (boe) as of December 31. See “Business Overview—Exploration
and Production—Reserves” in the 2022 Annual Report. |
| (5) | All production values are expressed in thousands of barrels of oil equivalent per day. |
* Reserve data
is calculated as of December 31 of the applicable prior year. Reserves information is calculated each year and is net after royalties.
Third parties audit 99% of our total proved reserves.
RISK FACTORS
You should consider
carefully all of the information set forth in this prospectus supplement, in the accompanying prospectus and any documents incorporated
by reference herein and, in particular, the risk factors described below, and in our 2022 Annual Report before deciding to invest in the
notes. The risk factors described below and in our 2022 Annual Report are not the only ones we face. Additional risks and uncertainties
that we are unaware of, or that we currently deem immaterial, may also become important factors that affect us.
Risks Related to Our Business
We have made and may make significant investments in acquisitions
and joint ventures and have made and may make significant divestments, and we may not realize the expected value of any such investments.
We have acquired interests
in several companies in Colombia and abroad, including the acquisition of ISA in August 2021. See sections “Business Overview—Our
Corporate Structure and Related Party and Intercompany Transactions––ISA Acquisition” in our 2022 Annual Report.
Obtaining the expected benefits
of the acquisitions, including ISA’s, or joint venture investments, will depend, in part, on our ability to: (i) obtain the expected
results of operations and financial condition from these acquisitions or joint venture investments, (ii) manage different sets of assets
and operations and integrate distinct corporate cultures or investment goals, (iii) manage our objectives as a corporate group, and (iv)
institute our corporate governance rules as well as other factors beyond our control such as the economic and regulatory environment in
countries in which we have made acquisitions or joint venture investments, as well as all other risks affecting the oil and gas industry
or the industries of the businesses we acquire or invest in. See “Legal Proceedings and Related Matters––Interconexión
Eléctrica S.A.” in our 2021 Annual Report.
In addition, consistent with
SEC guidance on recent acquisitions, our fiscal year ended December 31, 2022 is the first year in which we included ISA in management’s
assessment over internal controls as part of the completion of our annual report on Form 20-F for the fiscal year ended December 31, 2022.
Similarly, in our shale operations
in the U.S., the ability to drill and develop different locations is subject to uncertainties such as natural gas and oil prices, drilling
and production costs, availability of drilling services and equipment, lease acquisitions and expirations, processing capacity constraints,
pipeline transportation bottlenecks, access to and availability of water sourcing and distribution systems, regulatory approvals, among
others. We cannot assure that all the well locations we have identified will ever be drilled or if we will be able to produce natural
gas or oil at the planned levels. As a result, our efforts may not succeed and our failure to successfully obtain the expected results
from our acquisitions or joint venture investments could adversely affect our financial condition and results of operations.
Risks Related to Colombia and the Region’s Political and Regional
Environment
Changes in economic
policies in Colombia, Peru, Brazil and Chile could materially adversely affect our business, financial condition and results of operations.
Our
financial condition and results of operations may be adversely affected by changes in the political climate of Colombia, Peru, Brazil
and Chile to the extent that such changes affect the economic policies, growth, stability, outlook or regulatory environment of these
countries.
With
respect to Colombia, for the year ended December 31, 2022, revenues derived from Colombia represented 81% of our total revenues.
The Colombian Government has historically exercised substantial influence on the local economy, and governmental policies are likely to
continue to have an important effect on companies operating in Colombia and on market conditions. Each of the President of Colombia and
the Colombian Central Bank have considerable power to determine governmental policies and actions relating to the economy and may adopt
policies that may affect us. We cannot predict which policies will be adopted by the Government and whether those policies would have
a negative impact on the Colombian economy or our business and financial performance.
In
December 2023, the Minister of Mines and Energy, Andrés Camacho, announced the progress made by the Colombian Government in relation
to energy and hydrocarbons, as well as the challenges that are yet to be overcome in these sectors. In 2023, the Colombian Government
reactivated contracts for the exploration and production of hydrocarbons and created the “Roadmap for an Equitable Energy Transition,”
after having presented the “Construction of principles, methodology and launch of the Social Dialogue to define the Roadmap for
the Just Energy Transition in Colombia” during the United Nations Conference on Climate Change COP27 in Egypt in November 2022.
This roadmap has been built through technical analysis and together with existing regulations such as Law 2099 of 2021 and CONPES 4075
of 2022. Moreover, the Colombian Government has presented a bill to definitively prohibit fracking in Colombia. At this time, it is unclear
how such policies may affect our business, what form they could take, or whether we would need to adjust our business strategy to any
such policies. Furthermore, although throughout recent history elected governments (and the Colombian Congress as well) have pursued free
market economic policies with almost no economic interventions, we cannot predict which policies, if any, will be adopted by the new Government
and/or congress and whether those policies would have a negative impact on the Colombian economy or our business and financial performance.
On
August 8, 2022, the MHCP submitted a tax reform bill to Congress proposing several changes to the Colombian tax regime. The tax reform
bill was approved by Congress on November 17, 2022 and was sanctioned by President Petro as Law 2277 of 2022 on December 13, 2022. The
tax reform became effective starting January 1, 2023. The tax reform includes, among others: (i) a new permanent equity tax applicable
to Colombian individuals and non-residents, (ii) an increase in the dividend tax rate for local and foreign shareholders, (iii) an increase
in the long-term capital gains tax rate (increasing from 10% to 15%); (iv) the elimination and the limitation of specific tax benefits
and exemptions, such as the rule that exempted the taxing of capital gains from the sale of publicly listed shares (previously applicable
to sale of less than 10% of the total shares in circulation and, as of 2023, the threshold is limited to 3% of the total shares in circulation),
(v) an income tax surcharge for companies engaged in the extraction of crude oil and coal of 0%, 5%, 10% or 15% and based on international
prices, (vi) the introduction of a minimum tax based on effective tax rate determined on accounting profits. Initially, the tax
reform treated royalties paid by oil & gas companies to the Government as non-deductible for income tax purposes. However, the Colombian
Constitutional Court ruled that the limitation rule is unconstitutional, thus, not applicable. In a final effort to mitigate the effect
of this ruling to the public finances, the Government recently requested the Constitutional Court to adjust, modify or defer its decision.
At this point it is uncertain whether the Constitutional Court will alter in any way its ruling. Finally, on March 22, 2023 the Colombian
Government submitted a pension reform bill to Congress for approval. However, at this time it is unclear how such reform could affect
the Colombian economy or our business.
With
respect to Brazil, for the year ended December 31, 2022, revenues derived from our consolidated subsidiaries in this country represented
3% of our total revenues. Brazilian markets have experienced heightened volatility due the uncertainties from ongoing investigations on
money laundering and corruption conducted by the Brazilian Federal Police and the Office of the Brazilian Federal Prosecutor. These investigations
adversely affected the Brazilian economy and political scenario. We have no control over and cannot predict whether the ongoing investigations
or allegations will result in further political and economic instability, or if new allegations against government officials and/or companies
will arise in the future. During the first round of the Brazilian presidential elections held on October 2, 2022, former President Luiz
Inácio Lula da Silva received 48.40% of the votes and Mr. Bolsonaro obtained 43.23% of the votes. A run-off election was held on
October 30, 2022 and Mr. Lula da Silva was elected with 50.90% of the total votes and was sworn into office on January 1, 2023. Changes
in economic or other policies by Mr. Lula da Silva’s administration could negatively affect our industry in general, or our Brazilian
subsidiaries’ results of operations, in particular.
With
respect to Peru, for the year ended December 31, 2022, revenues derived from our consolidated subsidiaries in this country represented
2% of our total revenues. Peru’s most recent general presidential elections took place in April 2021. Following a run-off between
the two top contenders on June 6, 2021, Pedro Castillo was elected as Peru’s president. On
December 7, 2022, Mr. Castillo announced his intention to dissolve the Peruvian Congress and to intervene, among others, the Peruvian
judicial branch and Superior Court. Mr. Castillo’s actions were deemed to constitute an attempted coup, which led to his destitution
and arrest. Mr. Castillo was succeeded by his then vice-president, Dina Boluarte. Following Mr. Castillo’s destitution, a wave of
protests in support of Mr. Castillo erupted across the country, which led President Boluarte to declare a state of emergency across several
regions in Peru on December 12, 2022 and call for congressional approval of a bill to permit early elections in 2024. The bill for early
congressional elections was rejected, and the next elections will be held in April 2026. These events have further increased the environment
of political uncertainty in Peru. We cannot assure that policies against free market and minimal intervention of the government
in the Peruvian economy will not be taken by the current administration. Any changes in the Peruvian economy or the Peruvian government’s
economic policies may have a negative effect on our business, financial condition, and results of operations. Changes in economic or other
policies by the Peruvian government or other political developments in Peru could adversely affect the business, financial condition,
and results of operations of our subsidiaries.
With
respect to Chile, for the year ended December 31, 2022, revenues derived from our consolidated subsidiaries in this country represented
2% of our total revenues. On March 11, 2022, Chile elected a new President, Gabriel Boric, took office. Mr. Boric is part of a coalition
made up of several political parties from the Chilean left wing and we cannot predict what policies will be adopted by Mr. Boric’s
government and whether those policies would have a negative impact on the Chilean economy or our industry sector in Chile or our Chilean
subsidiaries’ business and financial performance.
We
cannot provide any assurances that political or social developments in Colombia, Peru, Brazil, or Chile over which we have no control,
will not have an adverse effect on our respective economic situations and will not adversely affect the business, financial condition
and results of operations of our consolidated subsidiaries and their ability to pay dividends or make other distributions to us. This
could have a material adverse effect on our business, results of operations, and financial condition.
Risk factors related to the notes
The notes are effectively subordinated
to the existing and future liabilities of our subsidiaries.
The notes will constitute
our general senior, unsecured and unsubordinated obligations and will rank pari passu, without any preferences among themselves,
with all of our other present and future senior unsecured and unsubordinated obligations that constitute our External Indebtedness. The
notes are not secured by any of Ecopetrol’s assets. Any future claims of secured lenders with respect to Ecopetrol’s assets
securing their loans will be prior to any claim of the holders of the notes with respect to those assets.
Ecopetrol’s subsidiaries
are separate and distinct legal entities from Ecopetrol. Ecopetrol’s subsidiaries have no obligation to pay any amounts due on the
notes or to provide Ecopetrol with funds to meet its payment obligations on the notes, whether in the form of dividends, distributions,
loans, guarantees or other payments. In addition, any payment of dividends, loans or advances by Ecopetrol’s subsidiaries could
be subject to statutory or contractual restrictions. Payments to Ecopetrol by its subsidiaries will also be contingent upon the subsidiaries’
earnings and business considerations. Ecopetrol’s right to receive any assets of any of its subsidiaries upon their bankruptcy,
liquidation or reorganization, and therefore the right of the holders of the notes to participate in those assets, will be effectively
subordinated to the claims of that subsidiary’s creditors, including trade creditors. In addition, even if Ecopetrol is a creditor
of any of its subsidiaries, its rights as a creditor would be subordinate to any security interest in the assets of its subsidiaries and
any indebtedness of its subsidiaries senior to that held by Ecopetrol. As of September 30, 2023, Ecopetrol S.A. had outstanding indebtedness
of COP$78,262,529 million and subsidiaries of Ecopetrol had additional outstanding indebtedness of COP$31,466,147 million, which we recognize
in our consolidated financial statements at its amortized cost, which corresponds to the present value of cash flows, discounted at the
effective interest rate (using an exchange rate of COP$4,053.76 to US$1.00 as of September 30, 2023). As of September 30, 2023, and after
giving effect to the issuance of the notes, Ecopetrol had outstanding indebtedness of COP$85,761,985 million and subsidiaries of Ecopetrol
had additional outstanding indebtedness of COP$31,466,147 million. None of the Ecopetrol indebtedness is secured, but the subsidiary indebtedness
will rank effectively senior to the notes offered hereby.
The indenture
does not restrict the amount of additional debt that we may incur or limit the granting of liens to secure indebtedness denominated in
Pesos, and does not provide for cross acceleration of the notes to other indebtedness denominated in Pesos or for events of default in
the event of insolvency or liquidation of any of our subsidiaries.
The notes and indenture under
which the notes will be issued do not place any limitation on the amount of unsecured debt that may be incurred by us. Our incurrence
of additional debt may have important consequences for you as a holder of the notes, including making it more difficult for us to satisfy
our obligations with respect to the notes, a loss in the trading value of your notes, if any, and a risk that the credit rating of the
notes is lowered or withdrawn. Furthermore, there are no limits to the liens we may grant to secure indebtedness denominated in Pesos.
Therefore, payments under the notes will be effectively subordinated to any current or future secured Peso-denominated debt. In addition,
the notes only cross accelerate to indebtedness which is not denominated in Pesos and do not contain as events of default the insolvency
or liquidation of any of our subsidiaries. Additionally, involuntary filings against Ecopetrol under the bankruptcy or insolvency laws
of certain jurisdictions, if filed, would not constitute events of default under the indenture governing the notes.
Our credit
ratings may not reflect all risks of your investments in the notes and may adversely affect the rating and price of the notes.
Our credit ratings are an
assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in our credit ratings
will generally affect the market value of the notes. These credit ratings may not reflect the potential impact of risks relating to structure
or marketing of the notes. Agency ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn
at any time by the issuing organization. Each agency’s rating should be evaluated independently of any other agency’s rating.
We may not
be able to repurchase the notes upon a change of control repurchase event.
Upon the occurrence of a change
of control repurchase event as set forth in “Description of the Notes—Certain Covenants—Repurchase of Notes upon a Change
of Control Repurchase Event”, we will be required to offer to repurchase all outstanding notes at 101% of their principal amount
plus accrued and unpaid interest, if any. The source of funds for any such purchase of the notes will be our available cash or cash generated
from our subsidiaries’ operations or other sources, including borrowings, sales of assets or sales of equity. We may not be able
to repurchase the notes upon a change of control repurchase event because we may not have sufficient financial resources to purchase all
of the notes that are tendered upon a change of control repurchase event. Our failure to repurchase the notes upon a change of control
repurchase event would cause a default under the indenture governing the notes. Any of our future debt agreements may contain similar
provisions.
Holders
of the notes are not able to effect service of process on us, our directors or executive officers within the United States, which may
limit your recovery in any foreign judgment you obtain against us.
We are a mixed-economy company
(sociedad de economía mixta) organized under the laws of Colombia. Most of our directors and executive officers reside outside
the United States. All or a substantial portion of our assets and the assets of these persons are located outside the United States. As
a result, it may not be possible for you to effect service of process within the United States upon us or these persons or to enforce
against us or them in U.S. courts judgments obtained in such courts predicated upon the civil liability provisions of the U.S. federal
securities laws. Colombian courts determine whether to enforce a U.S. judgment predicated on the U.S. securities laws through a procedural
system known as “exequatur”. For a description of these limitations, see “Enforcement of Civil Liabilities.”
We may claim
immunity under the Foreign Sovereign Immunities Act with respect to actions brought against us under the U.S. securities laws and your
ability to sue or recover may be limited under U.S. and Colombian law.
We reserve the right to plead
sovereign immunity under the United States Foreign Sovereign Immunities Act of 1976 with respect to actions brought against us under United
States federal securities laws or any state securities laws. Accordingly, you may not be able to obtain a judgment in a U.S. court against
us unless the U.S. court determines that we are not entitled to sovereign immunity with respect to that action. Moreover, you may not
be able to enforce a judgment against us in the United States except under the limited circumstances specified in the Foreign Sovereign
Immunities Act. Under Colombian law, we are subject to sovereign immunity before the Colombian courts regarding some specific assets and
legal proceedings. According to Colombian law these immunities cannot be waived, and you may not be able to enforce a judgment against
us in Colombian courts with respect to those assets.
We are not
required to disclose as much information to investors as a U.S. issuer is required to disclose.
We
are subject to the reporting requirements set by Law 964 of 2005, Decree 2555 of 2010, the SFC and the BVC. While we are also subject
to some reporting requirements under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), the
corporate disclosure requirements that apply to us may not be equivalent to the disclosure requirements that apply to a U.S. issuer and,
as a result, you may receive less information about us than you would receive from a U.S. issuer.
An active
trading market for the notes may not develop and may be sustained and changes in the financial markets or interest rates could adversely
affect the market prices of the notes.
The
notes constitute an issuance of new securities with no established trading market. We intend to apply to have the notes approved
for listing on the NYSE. Additionally, while the underwriters have advised us that they currently intend to make a market in the notes,
they are not obligated to do so and may discontinue market-making activities in their sole discretion at any time without notice. In addition,
their market-making activity will be subject to limits imposed by the U.S. Securities Act of 1933, as amended (the “Securities Act”)
and the Exchange Act. We cannot assure you that any market for the notes will be developed or sustained. If an active market is not developed
or sustained, the market price and liquidity of the notes may be adversely affected. If a market for the notes does not develop, holders
may not be able to resell the notes for an extended period of time, if at all. In addition, the condition of the financial markets and
prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future, which could have an adverse effect on
the market prices of the notes.
We may issue
additional notes that are treated for non-tax purposes as a single series with the notes offered hereby, but they may be treated for U.S.
federal income tax purposes as a separate series from the notes offered hereby.
We may issue additional notes
under the indenture that are treated for non-tax purposes as a single series with the notes offered hereby, but they may be treated for
U.S. federal income tax purposes as a separate series and not part of the same issue as the notes offered hereby. In such case, the additional
notes may be considered to have been issued with “original issue discount” for U.S. federal income tax purposes, which may
affect the market value of the notes offered hereby since such additional notes may not be distinguishable for non-tax purposes from the
notes offered hereby.
Because
the notes are represented by global securities registered in the name of a depositary, you will not be a “holder” under the
indenture and your ability to pledge the notes could be limited.
Because the notes are represented
by global securities registered in the name of a depositary, you will not be a “holder” under the indenture and your ability
to transfer or pledge the notes could be limited. The notes will be represented by one or more global securities registered in the name
of Cede & Co., as nominee for DTC. Except in the limited circumstances described in this prospectus supplement, owners of beneficial
interests in the global securities will not be entitled to receive physical delivery of notes in certificated form and will not be considered
“holders” of the notes under the indenture for any purpose. Instead, owners must rely on the procedures of DTC and its participants
to protect their interests under the indenture and to transfer their interests in the notes. Your ability to pledge your interest in the
notes to persons or entities that do not participate in the DTC system may also be adversely affected by the lack of a certificate.
USE OF PROCEEDS
We
expect the net proceeds from the sale of the notes will be approximately US$1,836,883,500 (after giving effect to the underwriters’
discount but before expenses). We intend to use the net proceeds of this offering to purchase the Target Notes tendered pursuant to the
Tender Offer (and pay related expenses thereunder), and finance expenditures outside our investment plan. As of the date of this prospectus
supplement, there were US$1,200,000,000 of the Target Notes outstanding.
EXCHANGE RATES AND CONTROLS
Exchange Rates
On January 9, 2024, the Representative
Market Rate was COP$3,912.93 per US$1.00. The Federal Reserve Bank of New York does not report a noon-buying rate for Pesos. The SFC calculates
the Representative Market Rate based on the weighted averages of the buy/sell foreign exchange rates quoted daily by foreign exchange
rate market intermediaries including financial institutions for the purchase and sale of U.S. dollars.
The following table sets forth
the high, low, average and period-end exchange rate for Pesos/U.S. dollar Representative Market Rate for each of the last six months.
| | |
Exchange Rates | |
| | |
| High | | |
| Low | | |
| Average | | |
| Period-End | |
July 2023 | | |
| 4,195.93 | | |
| 3,923.49 | | |
| 4,067.63 | | |
| 3,923.49 | |
August 2023 | | |
| 4,144.79 | | |
| 3,898.48 | | |
| 4,066.87 | | |
| 4,085.33 | |
September 2023 | | |
| 4,099.20 | | |
| 3,902.54 | | |
| 4,008.41 | | |
| 4,053.76 | |
October 2023 | | |
| 4,386.66 | | |
| 4,053.76 | | |
| 4,219.16 | | |
| 4,060.83 | |
November 2023 | | |
| 4,117.71 | | |
| 3,957.77 | | |
| 4,040.26 | | |
| 3,980.67 | |
December 2023 | | |
| 4,045.22 | | |
| 3,871.45 | | |
| 3,954.14 | | |
| 3,822.05 | |
January 2024 (through January 9, 2024) | | |
| 3,927.64 | | |
| 3,822.05 | | |
| 3,894.55 | | |
| 3,912.93 | |
Source: SFC.
Exchange Controls
Colombia has not had exchange
controls since 1991. However, pursuant to Colombian foreign exchange regulations certain transactions must be conducted in the foreign
exchange market and, in some cases, subject to registration before the Colombian Central Bank. In addition, the Colombian Government,
as regulator of international investments, or the Colombian Central Bank, as foreign exchange regulator, have, periodically, in certain
circumstances, imposed capital controls, including deposit requirements for borrowers in foreign currency. However, as of the date of
this prospectus supplement, there are no exchange controls and borrowers currently have no deposit requirements in Colombia, but there
can be no assurance that they will not exist in the future.
CAPITALIZATION
The
following table sets forth our cash and cash equivalents and our capitalization: (i) on an actual basis based on our unaudited interim
condensed consolidated financial statements as of September 30, 2023, prepared in accordance with IFRS-IASB; and (ii) on an
adjusted basis to give effect to the completion of the offering and application of the proceeds, as described under “Use of Proceeds”,
of approximately US$1,836,883,500 (after giving effect to the underwriting discount but before expenses).
This
table should be read in conjunction with our unaudited interim condensed consolidated financial statements prepared in accordance
with IFRS-IASB, as included in the current report on Form 6-K furnished to the SEC on January 9, 2024 and incorporated by reference
into this prospectus supplement.
| |
As of September 30, 2023 | |
| |
Actual, unaudited | | |
As Adjusted | |
| |
(in thousands of
U.S. dollars)* | | |
(in millions of
Colombian pesos) | | |
(in thousands of
U.S. dollars)* | | |
(in millions of
Colombian pesos) | |
Cash and cash equivalents | |
| 2,977,666 | | |
| 12,070,744 | | |
| 2,977,666 | | |
| 12,070,744 | |
Short-term liabilities – financial obligations | |
| | | |
| | | |
| | | |
| | |
Ecopetrol Bonds – USD Denominated (1) | |
| 832,922 | | |
| 3,376,464 | | |
| 832,922 | | |
| 3,376,464 | |
Ecopetrol Bonds – COP Denominated (2) | |
| 32,812 | | |
| 133,011 | | |
| 32,812 | | |
| 133,011 | |
Ocensa Bonds – USD Denominated (3) | |
| 16,000 | | |
| 64,860 | | |
| 16,000 | | |
| 64,860 | |
ISA Bonds – COP Denominated (4) | |
| 160,036 | | |
| 648,748 | | |
| 160,036 | | |
| 648,748 | |
ISA Bonds – USD Denominated (4) | |
| 573,812 | | |
| 2,326,095 | | |
| 573,812 | | |
| 2,326,095 | |
Ecopetrol Commercial Loans – USD Denominated (5) | |
| 995,175 | | |
| 4,034,200 | | |
| 995,175 | | |
| 4,034,200 | |
Ecopetrol Syndicated Loans – COP Denominated (6) | |
| 33,243 | | |
| 134,760 | | |
| 33,243 | | |
| 134,760 | |
Invercolsa Commercial Loans and other – COP Denominated | |
| 70,401 | | |
| 285,389 | | |
| 70,401 | | |
| 285,389 | |
Ecopetrol Capital AG Commercial Loans and others – USD Denominated | |
| 7,036 | | |
| 28,523 | | |
| 7,036 | | |
| 28,523 | |
ISA Commercial Loans – COP Denominated (4) | |
| 35,228 | | |
| 142,807 | | |
| 35,228 | | |
| 142,807 | |
ISA Commercial Loans – USD Denominated (4) | |
| 277,208 | | |
| 1,123,735 | | |
| 277,208 | | |
| 1,123,735 | |
Bicentenario Syndicated Loan - COP Denominated (7) | |
| 53,032 | | |
| 214,977 | | |
| 53,032 | | |
| 214,977 | |
Loan for Partial Pre-payment of Acquisition Loan – USD Denominated (8) | |
| 1,012,142 | | |
| 4,102,981 | | |
| 1,012,142 | | |
| 4,102,981 | |
Leases – COP Denominated | |
| 47,819 | | |
| 193,845 | | |
| 47,819 | | |
| 193,845 | |
Leases – USD Denominated | |
| 22,468 | | |
| 91,078 | | |
| 22,468 | | |
| 91,078 | |
Commercial loans from related parties - USD Denominated (9) | |
| 176,384 | | |
| 715,020 | | |
| 176,384 | | |
| 715,020 | |
Total short term liabilities – financial obligations | |
| 4,345,718 | | |
| 17,616,493 | | |
| 4,345,718 | | |
| 17,616,493 | |
Long-term liabilities – financial obligations | |
| | | |
| | | |
| | | |
| | |
Ecopetrol Bonds – USD Denominated (1) | |
| 12,376,352 | | |
| 50,170,760 | | |
| 11,176,352 | | |
| 45,306,249 | |
Ecopetrol Bonds – COP Denominated (2) | |
| 189,965 | | |
| 770,074 | | |
| 189,965 | | |
| 770,074 | |
Ocensa Bonds – USD Denominated (3) | |
| 384,433 | | |
| 1,558,400 | | |
| 384,433 | | |
| 1,558,400 | |
ISA Bonds – COP Denominated (4) | |
| 809,633 | | |
| 3,282,056 | | |
| 809,633 | | |
| 3,282,056 | |
ISA Bonds – USD Denominated (4) | |
| 4,895,614 | | |
| 19,845,644 | | |
| 4,895,614 | | |
| 19,845,644 | |
Notes offered hereby (11) | |
| -- | | |
| -- | | |
| 1,850,000 | | |
| 7,499,456 | |
ISA Commercial Loans – USD Denominated (4) | |
| 554,107 | | |
| 2,246,216 | | |
| 554,107 | | |
| 2,246,216 | |
ISA Commercial Loans – COP Denominated (4) | |
| 426,006 | | |
| 1,726,928 | | |
| 426,006 | | |
| 1,726,928 | |
Invercolsa Commercial Loans and others– COP Denominated | |
| 26,806 | | |
| 108,665 | | |
| 26,806 | | |
| 108,665 | |
Ecopetrol Commercial Loans – USD Denominated (5) | |
| 2,658,434 | | |
| 10,776,655 | | |
| 2,658,434 | | |
| 10,776,655 | |
Ecopetrol Syndicated Loans – COP Denominated (6) | |
| 188,389 | | |
| 763,682 | | |
| 188,389 | | |
| 763,682 | |
Leases – COP Denominated | |
| 175,472 | | |
| 711,320 | | |
| 175,472 | | |
| 711,320 | |
Leases – USD Denominated | |
| 37,443 | | |
| 151,783 | | |
| 37,443 | | |
| 151,783 | |
Total long-term liabilities – financial obligations | |
| 22,722,654 | | |
| 92,112,183 | | |
| 23,372,654 | | |
| 94,747,128 | |
Equity | |
| 25,143,234 | | |
| 101,924,635 | | |
| 25,143,234 | | |
| 101,924,635 | |
Total capitalization (10) | |
| 52,211,604 | | |
| 211,653,311 | | |
| 52,861,606 | | |
| 214,288,256 | |
*Amounts stated in U.S. dollars have been translated
for the convenience of the reader at the rate of COP$4053.76 to US$1.00, which is the Representative Market Rate at September 30, 2023,
as reported and certified by the SFC.
| (1) | Corresponds to the 4.125% notes due 2025; the 5.375% notes due 2026; the 8.625% notes due 2029; the 6.875% notes due 2030; the 4.625%
notes due 2031; the 8.875% notes due 2033, the 7.375% notes due 2043; the 5.875% notes due 2045, and the 5.875% notes due 2051. |
| (2) | Corresponds to local bonds issued in 2010 and 2013. |
| (3) | Corresponds to the 4.000% notes due 2027 issued by Oleoducto Central S.A. issued under Rule 144A and Regulation S under the Securities
Act. |
| (4) | Corresponds to multiple notes and commercial loans entered into by ISA and some of its subsidiaries denominated in domestic and foreign
currency. |
| (5) | Includes (i) US Exim Direct Loan Agreement; (ii) Commercial Facility Agreement with four international banks and an Export Credit
Agency; (iii) SACE Facility Agreement with three international banks; (iv) EKN Facility Agreement with one international bank; (v) US
Exim Guaranteed Facility with one international bank; and (vi) Credit Agreement entered into with The Bank of Nova Scotia and Sumitomo
Mitsui Banking Corporation; among others. |
| (6) | Corresponds mainly to the execution of a commercial loan agreement in pesos between Bancolombia S.A. and Ecopetrol SA. with IBR 6M
rate +4.9% and maturity June 2028. |
| (7) | Corresponds to the loan Oleoducto Bicentenario de Colombia S.A.S entered into with a syndicate of local banks in July 2012 due in
July 2024. |
| (8) | Corresponds to an outstanding principal of US$1,200 million for the loan entered into with a syndicate of international banks in August
2022, which was disbursed in September 2022 and the proceeds which were applied to partially pre-pay the Acquisition Loan. |
| (9) | Deposits held by Equion Energía Limited in Ecopetrol Capital AG. |
| (10) | Includes total current loans and borrowings plus total non-current loans and borrowings and equity. |
| (11) | The Company intends to use the proceeds from the notes offered hereby to (1) pay the consideration payable to purchase the 4.125%
notes due 2025 tendered and accepted for purchase in the Tender Offer (up to the U.S.$1,200 million aggregate principal amount outstanding)
and (2) redeem, repurchase or satisfy and discharge the 4.125% notes due 2025 not purchased in the Tender Offer (including paying any
accrued interest) in accordance with the Indenture. |
Other
than as noted in note 33 to our unaudited interim condensed consolidated
financial statements incorporated by reference from our current report on Form 6-K furnished to the SEC on January 9, 2024 and
as discussed therein, since September 30, 2023, there has not been any
other material change to our total capitalization except for the notes offered hereby which are expected to be issued on January 19, 2024,
and the application of the use of proceeds therefrom.
DESCRIPTION OF THE NOTES
The following description
of the terms of the notes supplements and modifies the description of the general terms and provisions of debt securities and the indenture
set forth in the accompanying prospectus, which you should read in conjunction with this prospectus supplement. In addition, we urge you
to read the indenture relating to the notes because they will define your rights as holders of the notes. If the description of the terms
of the notes in this prospectus supplement differs in any way from that in the accompanying prospectus, you should rely on the information
contained in this prospectus supplement. You may obtain copies of the indenture upon written request to the trustee or with the SEC at
the addresses set forth under “Where You Can Find More Information.”
The Indenture
The notes are to be issued
under an indenture, dated as of July 23, 2009 (the “base indenture”), as amended by Amendment No. 1 to the Indenture,
dated as of June 26, 2015, between Ecopetrol, as issuer, and The Bank of New York Mellon, as trustee, registrar, paying agent and
transfer agent (as amended, the “indenture”). The base indenture provides that, without the consent of Holders of securities,
Ecopetrol may enter into one or more amendments to the base indenture for the purpose of adding, changing, or eliminating any of the provisions
of the base indenture in respect of one or more series of the securities, provided that any such addition, change or elimination (i) shall
neither (A) apply to any security of any series created prior to the execution of such amendment to the indenture and entitled to
the benefit of such provision nor (B) modify the rights of the holder of any such security with respect to such provision or (ii) shall
become more effective only when there is no such security outstanding. Pursuant to the terms of the base indenture, Ecopetrol is amending
certain provisions of the base indenture and related definitions, with such amendments applying only to securities that are part of a
series created on or after the date of this amendment to the base indenture.
The following summary of certain
provisions of the indenture and the notes does not purport to be complete and is subject to, and qualified in its entirety by, reference
to the provisions of the indenture, including the definitions of certain terms contained in the indenture. The terms of the notes include
those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”). The notes are subject to all such terms, and holders of notes are referred to the indenture and the Trust Indenture
Act for a statement thereof. Capitalized terms not defined in this section of the prospectus supplement have meanings as set forth in
the indenture.
General
The indenture does not limit
the aggregate principal amount of senior debt securities which may be issued under the indenture and provides that Ecopetrol may issue
senior debt securities from time to time in one or more series. The senior debt notes which Ecopetrol may issue under the indenture are
collectively referred to in this prospectus supplement as the “senior notes”.
The 8.375% notes due 2036,
which are referred to in this prospectus supplement as the “notes”, will constitute a single series of senior notes under
the indenture. The notes will be unsecured senior obligations of Ecopetrol. Ecopetrol may “reopen” the notes and issue additional
notes of the same series.
The
notes will bear interest at the rate per annum shown above from the date of original issuance or from the most recent date to which interest
has been paid or duly provided for, payable semiannually on January 19 and July 19 of each year, each of which is referred to in this
prospectus supplement as an “interest payment date”, commencing on July 19, 2024 to the persons in whose names the
notes are registered at the close of business on the fifteenth calendar day preceding the interest payment date. Interest payable at maturity
will be payable to the person to whom principal will be payable on that date. Interest on the notes will be calculated on the basis of
a 360-day year of twelve 30-day months. The maturity date of the notes is January 19, 2036. If any interest payment date or maturity date
would be otherwise a day that is not a business day, the related payment of principal and interest will be made on the next succeeding
business day as if it were made on the date the payment was due, and no interest will accrue on the amounts so payable for the period
from and after the interest payment date or the maturity date, as the case may be, to the next succeeding business day. A “business
day” means a day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or
obligated by law, regulation or executive order to close. The notes will not be subject to any sinking fund.
In the case of amounts not
paid by Ecopetrol under the notes, interest will continue to accrue on such amounts, to the extent permitted by applicable law, at a default
rate equal to 1.0% in excess of the interest rate on the notes, from and including the date when such amounts were due and owing and through
and including the date of payment of such amounts by Ecopetrol.
General Covenants
The indenture does not contain
any provision that would limit the ability of Ecopetrol and its subsidiaries to incur indebtedness or to substantially reduce or eliminate
Ecopetrol’s assets or that would afford the holders of the notes protection in the event of a decline in Ecopetrol’s credit
quality or a takeover, recapitalization or highly leveraged or similar transaction involving Ecopetrol. In addition, subject to the limitations
set forth under “Description of the Debt Securities—Merger and Consolidation” in the accompanying prospectus, Ecopetrol
may, in the future, enter into certain transactions, including the sale of all or substantially all of its assets or the merger or consolidation
of Ecopetrol, that would increase the amount of Ecopetrol’s indebtedness or substantially reduce or eliminate Ecopetrol’s
assets, which may have an adverse effect on Ecopetrol’s ability to service its indebtedness, including the notes.
Additional Amounts
In the event that, as a result
of certain changes in law affecting Colombian withholding taxes, Ecopetrol becomes obliged to pay Additional Amounts (as defined below),
the notes will be redeemable, as a whole but not in part, at Ecopetrol’s option at any time at 100% of their principal amount plus
accrued and unpaid interest, if any. See “Description of the Debt Securities—Withholding Tax Redemption” in the accompanying
prospectus.
Change of Control
We are required to make an
offer to purchase all or any portion of notes outstanding held by holders upon the occurrence of a Change of Control Repurchase Event
(as defined in the accompanying prospectus) at a purchase price in cash equal to 101% of the principal amount of the notes so purchased,
plus accrued and unpaid interest thereon and any Additional Amounts to, but excluding, the date of such purchase.
Book-Entry Issuance
Each book-entry note will
be represented by one or more global notes in fully registered form, registered in the name of The Depository Trust Company, which is
referred to in this prospectus supplement as “DTC” or the “depositary”, or its nominee. Beneficial interests in
the global notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants.
See “Description of the Debt Securities— Form, Denomination and Registration” in the accompanying prospectus.
Book-entry notes may be transferred
or exchanged only through the depositary. See “Description of the Debt Securities—Form, Denomination and Registration”.
Registration of transfer or exchange of certificated notes will be made at the office or agency maintained by Ecopetrol for this purpose
in the Borough of Manhattan, The City of New York, currently the office of the trustee at 240 Greenwich Street, Floor 7 East, New York,
New York 10007.
Neither Ecopetrol nor the
trustee will charge a service charge for any registration of transfer or exchange of notes, but Ecopetrol may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange (other than exchanges
pursuant to the indenture not involving any transfer).
Government Responsibility
Despite the Republic of Colombia’s
ownership interest in Ecopetrol, the Nation is not and will not be responsible for Ecopetrol’s obligations under the senior debt
securities, including the notes, or the indenture.
Payments
Ecopetrol will make payments
of principal, and premium, if any, and interest on book-entry notes through the trustee to the depositary. See “Description of the
Debt Securities—Form, Denomination and Registration” in the accompanying prospectus. In the case of certificated notes (which
will only be issued in the circumstances described below under “Description of the Debt Securities—Form, Denomination and
Registration” in the accompanying prospectus), Ecopetrol will pay the principal and premium, if any, due on the maturity date in
immediately available funds upon presentation and surrender by the holder of the notes at the office or agency maintained by Ecopetrol
for this purpose in the Borough of Manhattan, The City of New York, currently the office of the trustee at 240 Greenwich Street, Floor
7 East, New York, New York 10007. Ecopetrol will pay interest due on the maturity date of a certificated note to the person to whom payment
of the principal and premium, if any, will be made. Ecopetrol will pay interest due on a certificated note on any interest payment date
other than the maturity date by check mailed to the address of the holder entitled to the payment as the address shall appear in the note
register of Ecopetrol. Notwithstanding the foregoing, a holder of US$10.0 million or more in aggregate principal amount of certificated
notes will be entitled to receive interest payments, if any, on any interest payment date other than the maturity date by wire transfer
of immediately available funds if appropriate wire transfer instructions have been received in writing by the trustee not less than 15
calendar days prior to the interest payment date. Any wire transfer instructions received by the trustee will remain in effect until revoked
by the holder. Any interest not punctually paid or duly provided for on a certificated note on any interest payment date other than the
maturity date will cease to be payable to the holder of any note as of the close of business on the related record date and may either
be paid (1) to the person in whose name the certificated note is registered at the close of business on a special record date for
the payment of the defaulted interest that is fixed by Ecopetrol, written notice of which will be given to the holders of the notes not
less than 30 calendar days prior to the special record date, or (2) at any time in any other lawful manner.
Form, Denomination and
Registration
See “Description of
the Debt Securities—Form, Denomination and Registration” in the accompanying prospectus.
Information Relating to
the Depositary. The following is based on information furnished by the depositary:
The depositary will act as
the depositary for the notes. The notes will be issued as fully registered senior notes registered in the name of Cede & Co.,
which is the depositary’s partnership nominee. Fully registered global notes will be issued for the notes, in the aggregate principal
amount of the issue, and will be deposited with the depositary. For further information on the depositary, see “Description of the
Debt Securities—Information Relating to the Depositary” in the accompanying prospectus.
Certain Covenants
The indenture provides that
the covenants set forth below are applicable to Ecopetrol.
Payment
of Principal and Interest. Ecopetrol will duly and punctually pay the principal of and any premium and interest and other
amounts (including any Additional Amounts in the event withholding and other taxes are imposed in Colombia) on the notes in accordance
with the notes and the indenture.
Maintenance
of Corporate Existence. Ecopetrol will maintain its corporate existence and take all reasonable actions to maintain all
rights, privileges and the like necessary or desirable in the normal conduct of business, activities or operations, unless the Board of
Directors determines (based on appropriate shareholder authorization, if necessary) that preserving Ecopetrol’s corporate existence
is no longer desirable in the conduct of Ecopetrol’s business and is not disadvantageous in any material respect to holders.
Ranking.
Ecopetrol will ensure that the notes will at all times constitute its general senior, unsecured and unsubordinated obligations and will
rank pari passu, without any preferences among themselves, with all of its other present and future unsecured and unsubordinated
obligations of Ecopetrol that constitute External Indebtedness (other than obligations preferred by statute or by operation of law).
Statement
by Officers as to Default and Notices of Events of Default. Within 10 days (or promptly with respect to certain events
of default relating to Ecopetrol’s insolvency and in any event no later than 10 days) after Ecopetrol becomes aware or should reasonably
become aware of the occurrence of any default or event of default under the indenture or the notes, it will notify the trustee in writing
of the occurrence of such default or event of default.
Provision
of Financial Statements and Reports. In the event that Ecopetrol files any financial statements or reports with the SEC
or publishes or otherwise makes such statements or reports publicly available in Colombia, the United States or elsewhere, Ecopetrol will
furnish a copy of the statements or reports to the trustee within 15 days of the date of filing or the date the information is published
or otherwise made publicly available.
Ecopetrol will provide, together
with each of the financial statements delivered as described in the preceding paragraph, an officer’s certificate stating (i) that
a review of Ecopetrol’s activities has been made during the period covered by such financial statements with a view to determining
whether Ecopetrol has kept, observed, performed and fulfilled its covenants and agreements under the indenture; and (ii) that no
event of default, or event which with the giving of notice or passage of time or both would become an event of default, has occurred during
that period or, if one or more have actually occurred, specifying all those events and what actions have been taken and will be taken
with respect to that event of default or other event.
Delivery of these reports,
information and documents to the trustee is for informational purposes only and the trustee’s receipt of any of those will not constitute
constructive notice of any information contained therein or determinable from information contained therein, including Ecopetrol’s
compliance with any of its covenants under the indenture (as to which the trustee is entitled to rely exclusively on officer’s certificates).
Money
for Securities Payments to Be Held in Trust. If Ecopetrol will at any time act as its own paying agent with respect
to the notes, it will, on or before each due date of the principal of, any premium or interest on or Additional Amounts with respect to
the notes, segregate and hold in trust for the benefit of the persons entitled thereto a sum in the currency or currencies, currency unit
or units or composite currency or currencies in which the notes are payable (except as otherwise specified pursuant to Section 301
of the indenture for the notes) sufficient to pay the principal or any premium, interest or Additional Amounts so becoming due until such
sums shall be paid to such persons or otherwise disposed of as herein provided, and shall promptly notify the trustee of its action or
failure so to act.
Whenever Ecopetrol will have
one or more paying agents for any notes, it will, on or prior to each due date of the principal of, any premium or interest on or any
Additional Amounts with respect to any notes, deposit with any paying agent a sum (in the currency or currencies, currency unit or units
or composite currency or currencies described in the preceding paragraph) sufficient to pay the principal or any premium, interest or
Additional Amounts so becoming due, such sum to be held in trust for the benefit of the persons entitled thereto, and (unless such paying
agent is the trustee) Ecopetrol will promptly notify the trustee of its action or failure so to act.
Ecopetrol will cause each
paying agent for any notes (other than the trustee) to execute and deliver to the trustee an instrument in which such paying agent shall
agree with the trustee, subject to the provisions of Section 1003 of the indenture, that such paying agent shall:
(1) hold all sums held
by it for the payment of the principal of, any premium or interest on or any Additional Amounts with respect to notes in trust for the
benefit of the persons entitled thereto until such sums will be paid to such persons or otherwise disposed of as provided in or pursuant
to the indenture, and Ecopetrol will have no proprietary or other interest whatsoever in such amounts; and so long as the trustee or such
paying agent holds the funds so deposited and such funds are available to holders of the notes entitled thereto in accordance with the
terms of the notes and the indenture and holders of the notes are not prevented from claiming such funds in accordance with the terms
of the notes and the indenture, Ecopetrol will not be considered to have defaulted in its obligation to make payment of such amounts on
the date on which such amounts become due and payable;
(2) give the trustee
notice of any default by Ecopetrol (or any other obligor upon the notes) in the making of any payment of principal, any premium or interest
on or any Additional Amounts with respect to the notes; and
(3) at any time during
the continuance of any such default, upon the written request of the trustee, forthwith pay to the trustee all sums so held in trust by
such paying agent.
Ecopetrol may at any time,
for the purpose of obtaining the satisfaction and discharge of the indenture or for any other purpose, pay, or by company order direct
any paying agent to pay, to the trustee all sums held in trust by Ecopetrol or such paying agent, such sums to be held by the trustee
upon the same terms as those upon which such sums were held by Ecopetrol or such paying agent; and, upon such payment by any paying agent
to the trustee, such paying agent will be released from all further liability with respect to such sums.
Except as otherwise provided
in the notes or in the indenture, any money deposited with the trustee or any paying agent, or then held by Ecopetrol, in trust for the
payment of the principal of, any premium or interest on or any Additional Amounts with respect to any note and remaining unclaimed for
two years after such principal or any such premium or interest or any such Additional Amounts will have become due and payable shall be
paid to Ecopetrol on company request, or (if then held by Ecopetrol) will be discharged from such trust; and the holder of such note shall
thereafter, as an unsecured general creditor, look only to Ecopetrol for payment thereof, and all liability of the trustee or such paying
agent with respect to such trust money, and all liability of Ecopetrol as trustee thereof, will thereupon cease; provided, however, that
the trustee or such paying agent, before being required to make any such repayment, may at the expense of Ecopetrol cause to be published
once, in an authorized newspaper in each place of payment for such series or to be mailed to holders of registered notes of such series,
or both, notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the
date of such publication or mailing nor will it be later than two years after such principal and any premium or interest or Additional
Amounts will have become due and payable, any unclaimed balance of such money then remaining will be repaid to Ecopetrol.
Waiver
of Certain Covenants. Ecopetrol may omit in any particular instance to comply with any term, provision or condition set
forth in Section 1002 of the indenture, inclusive with respect to the notes if before the time for such compliance the holders of
at least a majority in principal amount of the outstanding notes, by act of such holders, either will waive such compliance in such instance
or generally will have waived compliance with such term, provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of Ecopetrol
and the duties of the trustee in respect of any such term, provision or condition will remain in full force and effect.
Limitation
on Liens. Ecopetrol will not, and will not permit any Material Subsidiary to, directly or indirectly, create, incur or
assume any Lien, except for Permitted Liens, to secure the payment of Indebtedness of Ecopetrol or any Material Subsidiary, unless effective
provision is made whereby the notes (together with, if Ecopetrol shall so determine, any other Indebtedness ranking equally with the notes,
whether then existing or thereafter created) are secured equally and ratably with (or prior to) such Indebtedness (but only for so long
as such Indebtedness is so secured).
The foregoing limitation on
Liens shall not apply to the creation, incurrence or assumption of the following Liens (“Permitted Liens”):
1. Liens arising by operation
of law, such as merchants’, maritime or other similar Liens arising in the ordinary course of business or Liens in respect of taxes,
assessments or other governmental charges that are not yet delinquent or that are being contested in good faith by appropriate proceedings;
2. Liens arising in the ordinary
course of business in connection with Indebtedness maturing not more than one year after the date on which that Indebtedness was originally
incurred and which is related to the financing of export, import or other trade transactions;
3. Liens resulting from the
deposit of funds or evidence of Indebtedness in trust for the purpose of discharging or defeasing Indebtedness of Ecopetrol or any Material
Subsidiary;
4. Liens on any property or
assets existing at the time of acquisition thereof by Ecopetrol or any Material Subsidiary, including Liens on assets or property of a
Person existing at the time such Person is merged into, consolidated with or acquired by Ecopetrol or any Material Subsidiary or becomes
a Material Subsidiary; provided that any such Lien is not incurred in contemplation of such merger, consolidation or acquisition (unless
such Lien was created to secure or provide for the payment of any part of the purchase price of such property or assets) and does not
secure any property of Ecopetrol or any Material Subsidiary other than the property and assets subject to such Lien prior to such merger,
consolidation or acquisition;
5. Liens existing as of the
date of original issuance of the notes;
6. Liens securing Indebtedness
(including in the form of Capitalized Lease Obligations and purchase money Indebtedness) incurred for the purpose of financing the cost
(including without limitation the cost of design, development, site acquisition, construction, integration, manufacture or acquisition)
of real or personal property (tangible or intangible) which is incurred contemporaneously therewith or within 180 days thereafter; provided
(i) such Liens secure Indebtedness in an amount not in excess of the cost of such property (plus an amount equal to the reasonable
fees and expenses incurred in connection with the incurrence of such Indebtedness) and (ii) such Liens do not extend to any property
of Ecopetrol or any Material Subsidiary other than the property for which such Indebtedness was incurred;
7. Liens to secure the performance
of statutory and common law obligations, bids, trade contracts, judgments, surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business;
8. Liens arising out of judgments
or awards against Ecopetrol or a Material Subsidiary which have not resulted in an Event of Default;
9. Liens to secure the notes;
10. (i) Liens granted in
favor of Ecopetrol and/or any Wholly Owned Subsidiary to secure Indebtedness owing to Ecopetrol or such Wholly Owned Subsidiary, and (ii) Liens
granted by a Material Subsidiary in favor of another Material Subsidiary to secure Indebtedness owing to such other Material Subsidiary;
11. Legal or equitable encumbrances
deemed to exist by reason of the inclusion of customary negative pledge provisions in any financing document of Ecopetrol or any Subsidiary;
12. Liens securing Internal
Indebtedness;
13. Any Lien in respect of Indebtedness
representing the extension, refinancing, renewal or replacement (or successive extensions, refinancings, renewals or replacements) of
Indebtedness secured by Liens referred to in clauses (2), (3), (4), (5), (6), (7), (8), (9), (10) and (11) above and (17) below;
provided that the principal of the Indebtedness secured thereby does not exceed the principal of the Indebtedness secured thereby immediately
prior to such extension, renewal or replacement, plus any accrued and unpaid interest or capitalized interest payable thereon, reasonable
fees and expenses incurred in connection therewith, and the amount of any prepayment premium necessary to accomplish any refinancing;
and provided, further, that such extension, renewal or replacement shall be limited to all or a part of the property (or interest therein)
subject to the Lien so extended, renewed or replaced (plus improvements and construction on such property);
14. Pledges and deposits made
in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws
or regulations;
15. Easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary
conduct of business of Ecopetrol or any of its Subsidiaries;
16. Liens arising out of governmental
concessions or licenses held by Ecopetrol or any of its Subsidiaries;
17. Liens over construction
or development project assets (including shares or other equity interests of any Person formed to own, construct, or develop such assets)
so long as recourse is limited to recoveries (including any revenues) in respect of such construction or development of project assets;
18. Liens or deposits required
by any contract or statute or other regulatory requirements in order to permit Ecopetrol or any Subsidiary of Ecopetrol to perform any
contract or subcontract made by it with or at the request of a governmental entity or any department, agency or instrumentality thereof,
or to secure return of partial progress, advance or any other payments to Ecopetrol or any Subsidiary by a governmental entity or any
department, agency, or instrumentality thereof pursuant to the provisions of any contract or statute; and
19. Liens in respect of Indebtedness
the principal amount of which in the aggregate, together with all other Liens not otherwise qualifying as Permitted Liens pursuant to
another part of this definition of Permitted Liens, does not exceed 15% of Ecopetrol’s Consolidated Total Assets. For purposes of
this covenant, the value of any Lien securing Indebtedness will be computed on the basis of the lesser of (i) the outstanding principal
amount of such secured Indebtedness and (ii) the higher of (x) the book value or (y) the Fair Market Value of the property
securing such Indebtedness.
Repurchase
of Notes upon a Change of Control Repurchase Event. Ecopetrol must commence, within 30 days of the occurrence of a Change
of Control Repurchase Event, and consummate an offer to purchase (“Offer to Purchase”) all notes then outstanding, at a purchase
price equal to 101% of the principal amount of the notes on the date of repurchase, plus accrued interest (if any) to the date of purchase.
Ecopetrol is not required to make an Offer to Purchase following a Change of Control Repurchase Event if a third party makes an Offer
to Purchase that would be in compliance with the provisions described in this covenant if it were made by Ecopetrol and such third party
purchases (for the consideration referred to in the immediately preceding sentence) the notes validly tendered and not withdrawn. Prior
to the mailing of the notice to holders commencing such Offer to Purchase, but in any event within 30 days following any Change of Control
Repurchase Event, Ecopetrol covenants to (i) repay in full all indebtedness of Ecopetrol that would prohibit the repurchase of the
notes pursuant to such Offer to Purchase or (ii) obtain any requisite consents under instruments governing any such indebtedness
of Ecopetrol to permit the repurchase of the notes. Ecopetrol shall first comply with the covenant in the preceding sentence before it
repurchases notes upon a Change of Control Repurchase Event pursuant to this covenant.
We will comply, to the extent
applicable, with the requirements of Rule 14e-1 of the Exchange Act and other applicable securities laws or regulations in connection
with making an offer to purchase notes upon the occurrence of a Change of Control Repurchase Event. To the extent that the provisions
of any applicable securities laws or regulations conflict with provisions of this covenant, we will comply with the applicable securities
laws and regulations and will not be deemed to have breached our obligations under this covenant by virtue of our compliance with such
securities laws or regulations.
There can be no assurance
that Ecopetrol will have sufficient funds available at the time of any Change of Control Repurchase Event to make the repurchases of notes
required by the foregoing covenant (as well as by any covenant contained in other securities of Ecopetrol which might be outstanding at
the time).
Additional
Amounts. Pursuant to the indenture, all payments to be made in respect of the notes are to be made free and clear of, and
without deduction or withholding for or on account of, any taxes imposed or levied by or on behalf of Colombia or any political subdivision
or authority of or in such jurisdiction having the power to tax (“Taxes”, and such jurisdictions, “Taxing Jurisdiction”),
except to the extent such Taxes are imposed by applicable law. In the event that any Taxes are required by applicable law to be deducted
or withheld from any payment required to be made in respect of the notes or otherwise under the indenture, then the amount of such payment
shall be increased by an amount as may be necessary such that such payment is made, after withholding or deduction for or on account of
such Taxes, in an amount equal to the amount that would have been received by the applicable recipient(s) in respect of such payment
had no such Taxes (including any Taxes payable in respect of such Additional Amounts) been required to be so deducted or withheld (any
such amounts, “Additional Amounts”).
Furthermore, the amount of
any Taxes required to be withheld or deducted from any payment made in respect of the notes or otherwise under the indenture shall be
withheld or deducted from such payment (as increased by any Additional Amounts) and paid to the Taxing Jurisdiction imposing such Taxes
in accordance with applicable law.
Notwithstanding the preceding
sentences, no such Additional Amounts will be payable in respect of:
(i). any
Tax assessed or imposed by any Taxing Jurisdiction to the extent that such Tax would not have been assessed or imposed but for the applicable
recipient or beneficial owner of such payment having a present or former connection with the Taxing Jurisdiction (including, without limitation,
such holder being or having been a citizen or resident thereof or having been engaged in a trade or business or present therein or having,
or having had, a permanent establishment therein), other than solely by reason of the applicable recipient’s participation in the
transactions effected by the indenture and the receipt of payments thereunder (including under the notes);
(ii). any
estate, inheritance, gift, personal property, sales, use, excise, transfer or other similar Tax imposed with respect to such payment;
(iii). any
such Taxes that would not have been imposed but for the failure of the applicable recipient or beneficial owner of such payment to comply
with any certification, identification, information, documentation or other reporting requirement to the extent (a) such compliance
is required by applicable law or an applicable treaty as a precondition to exemption from, or reduction in the rate of deduction or withholding
of, such Taxes and (b) at least 30 days before the first payment date with respect to which the obligor with respect to a payment
shall apply this clause (iii), such obligor shall have notified such recipient in writing that such recipient will be required to comply
with such requirement;
(iv). any
Tax imposed as a result of any note being presented for payment (where presentation is required) more than 15 days after the relevant
payment is first made available for payment to the applicable recipient (except to the extent that such recipient would have been entitled
to Additional Amounts had the note been presented during such 15-day period);
(v). any
Tax payable other than by withholding or deduction from payments of principal or of interest on the note;
(vi). any
Tax imposed on or in respect of a payment to or on behalf of a holder or beneficial owner who would have been able to avoid such Tax in
a commercially reasonable manner by presenting the relevant note to any other paying agent;
(vii). any
Tax imposed on or in respect of any note pursuant to sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”), any successor law or regulation implementing or complying with, or introduced in order to conform to, such sections
or any intergovernmental agreement or any agreement entered into pursuant to section 1471(b)(1) of the Code; or
(viii). any
combination of the circumstances described in clauses (i) through (vii);
nor will any Additional Amounts
be paid with respect to any payment to a recipient who is a fiduciary, partnership, limited liability company or any Person other than
the sole beneficial owner of such payment to the extent that a beneficiary or settlor with respect to such fiduciary or a member of such
partnership, limited liability company or a beneficial owner would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been in the place of such recipient.
Ecopetrol shall provide the
trustee upon its request with documentation reasonably satisfactory to it evidencing the payment of Taxes in respect of which Ecopetrol
has paid any Additional Amounts. Copies of such documentation will be made available to the applicable recipients upon written request
therefor to the trustee.
The obligation to pay Additional
Amounts will survive the repayment of the notes and the sale or transfer of the notes (or beneficial interests therein) by any investor.
In addition, Ecopetrol shall
pay any and all other Taxes (“Other Taxes”) imposed by the relevant taxing authority imposing such Other Taxes in accordance
with applicable law, excluding any such Other Taxes imposed by any jurisdiction outside of Colombia. As used herein, Other Taxes shall
mean any and all stamp, documentary or similar taxes, or any other excise or similar levies that arise on account of any payment to be
made under any note or from the execution, delivery, registration, recording or enforcement of the notes and the indenture (other than
any Taxes paid in accordance with the first paragraph of “—Additional Amounts”).
Optional Redemption
We will not be permitted to
redeem the notes before their stated maturity, except as set forth below. The notes will not be entitled to the benefit of any sinking
fund – meaning that we will not deposit money on a regular basis into any separate account to repay your notes. In addition, except
as set forth above under “—Repurchase of Notes upon a Change of Control Repurchase Event”, you will not be entitled
to require us to repurchase your notes from you before the stated maturity.
Optional Redemption
Prior to October 19, 2035
(three months prior to the maturity date of the notes, the “Par Call Date”), at our option, we may redeem the notes, in whole
or in part, at any time and from time to time, at a redemption price (expressed as a percentage of principal amount and rounded to three
decimal places) equal to the greater of:
|
(1) |
(a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, less (b) interest accrued to the date of redemption, and |
|
(2) |
100% of the principal amount of the notes to be redeemed, |
plus, in either case, accrued and unpaid
interest thereon to the redemption date.
On or after the Par Call Date,
we may redeem, at our option, the notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of
the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to the redemption date.
“Treasury Rate”
means, with respect to any redemption date, the yield determined by us in accordance with the following two paragraphs.
The Treasury Rate shall be
determined by us after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the
Board of Governors (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal
Reserve System), on the third business day preceding the redemption date based upon the yield or yields for the most recent day that appear
after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated
as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption
“U.S. government securities–Treasury constant maturities–Nominal” (or any successor caption or heading). In determining
the Treasury Rate, we shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the
period from the redemption date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant
maturity on H.15 exactly equal to the Remaining Life, the two yields – one yield corresponding to the Treasury constant maturity
on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining
Life – and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and
rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer
than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this
paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant
number of months or years, as applicable, of such Treasury constant maturity from the redemption date.
If on the third business day
preceding the redemption date H. 15 or any successor designation or publication is no longer published, we shall calculate the Treasury
Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second
business day preceding such redemption date of the United States Treasury security maturing on, or with a maturity that is closest to,
the Par Call Date. If there is no United States Treasury security maturing on the Par Call Date but there are two or more United States
Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date
and one with a maturity date following the Par Call Date, we shall select the United States Treasury security with a maturity date preceding
such Par Call Date. If there are two or more United States Treasury securities maturing on the Par Call Date or two or more United States
Treasury securities meeting the criteria of the preceding sentence, we shall select from among these two or more United States Treasury
securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices for such
United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of
this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average of
the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury
security, and rounded to three decimal places.
Our actions and determinations
in determining the redemption price shall be conclusive and binding for all purposes, absent manifest error.
Notice of any redemption will
be mailed or electronically delivered (or otherwise transmitted in accordance with the depositary’s procedures) at least 10 days
but not more than 60 days before the redemption date to each holder of the notes to be redeemed.
Notice of any optional redemption
may be, at Ecopetrol’s discretion, subject to one or more conditions precedent, including, but not limited to, the completion of
an equity offering or other corporate or financing transactions. In addition, if such optional redemption is subject to satisfaction of
one or more conditions precedent, such notice shall describe each such condition, and if applicable, shall state that, in Ecopetrol’s
discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such optional redemption
may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption
date, or by the redemption date as so delayed.
In the case of a partial redemption,
selection of the notes for redemption will be made pro rata, by lot or by such other method as the Trustee in its sole discretion deems
appropriate and fair. No notes of a principal amount of $1,000 or less will be redeemed in part. If the notes are to be redeemed in part
only, the notice of redemption that relates to the notes will state the portion of the principal amount of such notes to be redeemed.
A new note in a principal amount equal to the unredeemed portion of the notes will be issued in the name of the holder of such note upon
surrender for cancellation of the original note. For so long as the notes are held by DTC (or another depositary), the redemption of the
notes shall be done in accordance with the policies and procedures of the depositary.
Unless we default in payment
of the redemption price, on and after the redemption date interest will cease to accrue on the notes or portions thereof called for redemption.
Withholding Tax Redemption
The notes may be redeemed
at Ecopetrol’s election, in whole but not in part on any date, by the giving of notice as provided herein under “—Notices”,
at a price equal to 100% of the outstanding principal amount thereof, together with any Additional Amounts and accrued and unpaid interest
to the redemption date, if, as a result of any change in, or amendment to, laws or treaties (or any regulation or rulings promulgated
thereunder) of Colombia or any political subdivision or taxing authority thereof or therein or any change in the official application,
administration or interpretation of such laws, treaties, regulations or rulings in such jurisdictions, Ecopetrol is or will become obligated
to pay any Additional Amounts on the notes, if such change or amendment is announced and becomes effective on or after the issuance of
the notes and such obligation cannot be avoided by taking commercially reasonable measures available to Ecopetrol; provided, however,
that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which Ecopetrol would be obligated
to pay such Additional Amounts.
Notice of any redemption will
be mailed at least 10 days but not more than 60 days before the redemption date to each holder of the notes to be redeemed. Prior to the
giving of notice of redemption of such notes pursuant to the indenture, Ecopetrol will deliver to the trustee an officer’s certificate
and a written opinion of recognized Colombian counsel independent of Ecopetrol and its Affiliates to the effect that all governmental
approvals necessary for it to effect such redemption have been or at the time of redemption will be obtained and in full force and effect,
and that Ecopetrol has or will become obligated to pay such Additional Amounts as a result of such change, amendment, application, administration
or interpretation. On the redemption date, interest will cease to accrue on the notes that have been redeemed.
Open Market Purchases
Ecopetrol or any of its Subsidiaries
may at any time purchase any note in the open market or otherwise at any price.
Merger and Consolidation
Ecopetrol may not consolidate
with or merge into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets and the properties
and assets of its Subsidiaries (taken as a whole) as an entirety to, any entity or entities (including limited liability companies) unless
(1) the successor entity or entities, each of which shall be organized under the laws of Colombia or of the United States or a State
thereof, shall assume by supplemental indenture all the obligations of Ecopetrol under the notes and the indenture (including the obligation
to pay the Additional Amounts) and such successor entity or entities delivers certain certificates, opinions of counsel and other documents
to the trustee, (2) if the other entity is organized under the laws of a country other than the United States, a state thereof or
Colombia, Ecopetrol indemnifies holders against any tax, assessment or governmental charge or other cost resulting from the transaction,
(3) prior to and immediately after giving effect to the transaction or series of transactions, no default or event of default shall
have occurred and be continuing, (4) Ecopetrol delivers certain certificates, opinions of its counsel and other documents to the
trustee and (5) if, as a result of such transaction, properties or assets of Ecopetrol would become subject to an encumbrance which
would not be permitted by the terms of the notes, Ecopetrol or the successor entity or entities shall take such steps as are necessary
to secure such notes equally and ratably with all indebtedness secured thereunder. Thereafter, all such obligations of Ecopetrol shall
terminate. Notwithstanding the foregoing, nothing herein shall prohibit Ecopetrol from selling, assigning, transferring, leasing, conveying
or otherwise disposing of any of Ecopetrol’s Subsidiaries at the date of the indenture or any interest therein or any assets thereof.
Events of Default
The term “event of default”
means any one of the following events with respect to the notes:
1. default
in the payment of any interest on any note, or any Additional Amounts payable with respect thereto, when the interest becomes or the Additional
Amounts become due and payable, and continuance of the default for a period of 30 days;
2. default
in the payment of the principal of or any premium on any note, or any Additional Amounts payable with respect thereto, when the principal
or premium becomes or the Additional Amounts become due and payable at their maturity, upon redemption or otherwise, and continuance of
the default for a period of 7 days;
3. default
in the performance, or breach, of any covenant or warranty of Ecopetrol in the indenture (other than a covenant or warranty a default
in whose performance or breach is elsewhere in Section 501 of the indenture specifically dealt with or which has expressly been included
in the indenture solely for the benefit of a series of Securities other than that series) or the notes and continuance of the default
or breach for a period of 60 days (inclusive of any cure period contained in any such covenant or other term for compliance thereunder)
after there has been given, by registered or certified mail, to Ecopetrol by the trustee or to Ecopetrol and the trustee by the holders
of at least 25% in principal amount of the outstanding senior debt securities of the respective series, a written notice specifying the
default or breach and requiring it to be remedied and stating that the notice is a “Notice of Default” under the indenture;
4. any
event of default as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured
or evidenced, any External Indebtedness of Ecopetrol, other than the notes, or any Material Subsidiary of Ecopetrol, whether the External
Indebtedness now exists or shall hereafter be created, shall occur and shall result in such External Indebtedness in aggregate principal
amount (or, if applicable, with an issue price and accreted original issue discount) in excess of US$100.0 million (or its equivalent
in another currency) becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;
5. the
entry by a court having competent jurisdiction of one or more final and non- appealable judgments or final decrees against Ecopetrol or
a Material Subsidiary involving in the aggregate a liability (not paid or fully covered by insurance) of 1% of Consolidated Net Tangible
Assets (or its equivalent in another currency) or more, and all such judgments or decrees have not been vacated, discharged or stayed
within 180 days after the date set for payment;
6. Ecopetrol
admits that it is generally unable to pay its debts as they become due or passes a resolution to dissolve;
7. the
entry by a court having competent jurisdiction of:
(a) a
decree or order for relief in respect of Ecopetrol in an involuntary proceeding under Bankruptcy Law, which decree or order shall remain
unstayed and in effect for a period of 180 consecutive days;
(b) a
decree or order in an involuntary proceeding under Bankruptcy Law adjudging Ecopetrol to be insolvent, or approving a petition seeking
a similar relief under Bankruptcy Law in respect of Ecopetrol, which decree or order shall remain unstayed and in effect for a period
of 180 consecutive days; or
(c) a
final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of Ecopetrol
or of any substantial part of the property of Ecopetrol or ordering the winding up or liquidation of the affairs of Ecopetrol; and
8. the
commencement by Ecopetrol of a voluntary proceeding under any applicable bankruptcy, insolvency or other similar law or of a voluntary
proceeding seeking to be adjudicated insolvent or the consent by Ecopetrol to the entry of a decree or order for relief in an involuntary
proceeding under any applicable bankruptcy, insolvency or other similar law or to the commencement of any insolvency proceedings against
it, or the filing by Ecopetrol of a petition or answer or consent seeking relief under any applicable bankruptcy, insolvency or other
similar law, or the consent by Ecopetrol to the filing of the petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or similar official of Ecopetrol or any substantial part of the property of Ecopetrol or the making by Ecopetrol
of an assignment for the benefit of creditors, or the taking of corporate action by Ecopetrol in furtherance of any such action.
If an event of default with
respect to the notes at the time outstanding (other than an event of default specified in clause (7) or (8) above) occurs and
is continuing, then the trustee or the holders of not less than 25% in principal amount of the outstanding notes may declare the principal
of the notes, to be due and payable immediately, by a notice in writing to Ecopetrol (and to the trustee if given by the holders), and
upon any declaration the principal shall become immediately due and payable. If an event of default specified in clause (7) or (8) above
occurs, all unpaid principal of and accrued interest on the notes shall become and be immediately due and payable without any declaration
or other act on the part of the trustee or any holder of any note.
At any time after a declaration
of acceleration or automatic acceleration with respect to the notes has been made and before a judgment or decree for payment of the money
due has been obtained by the trustee, the holders of not less than a majority in principal amount of the outstanding notes, by written
notice to Ecopetrol and the trustee, may rescind and annul the declaration and its consequences if:
1. Ecopetrol
has paid or deposited with the trustee a sum of money sufficient to pay (i) all overdue installments of interest on the notes and
any Additional Amounts payable with respect thereto, and (ii) all fees and expenses incurred by the trustee in accordance with the
indenture in connection with the Event of Default that gave rise to the acceleration by the Holders and the principal of and any premium
on the notes which have become due otherwise than by the declaration of acceleration and interest thereon; and
2. all
events of default with respect to the notes, other than the nonpayment of the principal of, any premium and interest on, and any Additional
Amounts with respect to the notes which shall have become due solely by the acceleration, shall have been cured or waived.
No rescission granted shall
affect any subsequent default or Event of Default or impair any right consequent thereon.
Meetings of Noteholders
See “Description of
the Debt Securities—Meeting of Noteholders” in the accompanying prospectus.
Modification and Waiver
See “Description of
the Debt Securities—Modification and Waiver” in the accompanying prospectus.
Listing
Ecopetrol intends to apply
to have the notes approved for listing on the NYSE.
Notices
Except as otherwise expressly
provided in or pursuant to the indenture, where the indenture provides for notice to holders of notes of any event, such notice shall
be sufficiently given to holders of registered notes if in writing and mailed, first-class postage prepaid, to each holder of a registered
note affected by such event, at his address as it appears in the security register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice.
In any case where notice to
holders of registered notes is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any
particular holder of a registered note shall affect the sufficiency of such notice with respect to other holders of registered notes.
Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. In the case
by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the trustee shall constitute a sufficient notification for every purpose
under the indenture.
Where the indenture provides
for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the
event, and such waiver shall be the equivalent of such notice. Waivers of notice by holders of notes shall be filed with the trustee,
but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
The trustee may rely upon
and comply with instructions or directions sent via unsecured facsimile or email transmission and the trustee shall not be liable for
any loss, liability or expense of any kind incurred by Ecopetrol or the holders due to the trustee’s reliance upon and compliance
with instructions or directions given by unsecured facsimile or email transmission, provided, however, that such losses have not arisen
from the gross negligence or willful misconduct of the trustee, it being understood that the failure of the trustee to verify or confirm
that the person providing the instructions or directions, is in fact, an authorized person does not constitute gross negligence or willful
misconduct.
Unclaimed Amounts
Any money deposited with the
trustee or paying agent or held by Ecopetrol, in trust, for the payment of principal, premium, interest or any Additional Amounts, that
remains unclaimed for two years after such amount becomes due and payable shall be paid to Ecopetrol on its request or, if held by Ecopetrol,
shall be discharged from such trust. The holder of the notes will look only to Ecopetrol for payment thereof, unless an abandoned property
law designates another person, and all liability of the trustee, paying agent or of Ecopetrol, as trustee, shall thereupon cease.
Certain Definitions
See “Description of
the Debt Securities—Certain Definitions” in the accompanying prospectus.
Discharge, Defeasance and
Covenant Defeasance
See “Description of
the Debt Securities—Discharge, Defeasance and Covenant Defeasance” in the accompanying prospectus.
Currency Indemnity
Any amount received or recovered
by a holder of a note on or under the notes or the indenture (whether as a result of, or of the enforcement of, a judgment or order of
a court of any jurisdiction, in the winding-up or dissolution of us or otherwise) in a currency other than U.S. Dollars shall constitute
a discharge of Ecopetrol’s obligation only to the extent of the U.S. Dollar amount which such holder is able to purchase with the
amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that
purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the U.S. Dollar
amount expressed to be due to such holder of a note, Ecopetrol will indemnify such holder against any loss sustained by it as a result;
if that U.S. Dollar amount so purchased exceeds the U.S. Dollar amount expressed to be due to the holder of such note, such holder agrees
to remit such excess to Ecopetrol. Notwithstanding the foregoing, any payment required to be made by us under this indemnity will remain
subject to the final judgment, order or decree entered by the applicable court of jurisdiction with respect thereto.
For the purposes of the preceding
paragraph, it will be sufficient for the holder of a note to certify in a manner reasonably satisfactory to Ecopetrol (indicating the
sources of information used) that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount so received
in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on
the first date on which it would have been practicable, which date and the reason for such impracticability shall be included in the certification
by the holder of such note). These indemnities will constitute a separate and independent obligation from the other obligations under
the indenture and the notes, will give rise to a separate and independent cause of action, will apply irrespective of any indulgence granted
by any holder of a note and will continue in full force and effect despite any other judgment or order, for a liquidated amount in respect
of any sum due under any note.
Waiver of Immunity
Ecopetrol shall irrevocably
waive, to the fullest extent permitted by applicable law, any immunity (including sovereign immunity) from suit, action, proceeding or
jurisdiction to which it might otherwise be entitled in any such suit, action or proceeding in any U.S. federal or New York State court
in the Borough of Manhattan, The City of New York, or in any competent court in Colombia; except as provided under (i) Articles 192,
193 and 195 of Law 1437 of 2011 (Código de Procedimiento Administrativo y de lo Contencioso Administrativo) as amended by
Article 87 of Law 2080 of 2021; and (ii) Articles 593, 594 and 595 et al of Law 1564 of 2012 (Código General del Proceso),
pursuant to which the revenues, assets and property of Ecopetrol located in Colombia are not subject to execution, set-off or attachment;
provided, however, that under the laws of Colombia, any suit, action, proceeding or jurisdiction for the collection of amounts ordered
by or arising from collectable documents will be subject to the rules set forth under Articles 298 and 299 of Law 1437 of 2011 (Código
de Procedimiento Administrativo y de lo Contencioso Administrativo) as amended by Articles 80, 81 and 87 of Law 2080 of 2021. Under
the laws of Colombia, the regulations that govern statutes of limitations and other time limits for any suit, action, proceeding or jurisdiction
may not be waived by Ecopetrol. In addition, to the extent that Ecopetrol or any of its revenues, assets or properties will be entitled,
in any jurisdiction, to any immunity from setoff, banker’s lien, attachment or any similar right or remedy, and to the extent that
there will be attributed, in any jurisdiction, such an immunity, Ecopetrol irrevocably agrees not to claim and irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction with respect to any claim, suit, action, proceeding, right or
remedy arising out of or in connection with the indenture and the notes. Ecopetrol reserves the right to plead sovereign immunity under
the United States Foreign Sovereign Immunities Act of 1976, as amended, with respect to any action brought against it under the United
States federal securities laws or any state securities laws.
Governing Law
The indenture and the notes
will be governed by, and construed in accordance with, the laws of the State of New York except that the laws of Colombia will govern
all matters relating to authorization and execution of the indenture and the notes.
Submission to Jurisdiction;
Agent for Service of Process
Under the indenture, Ecopetrol
has consented and agreed to submit, to the fullest extent permitted by applicable law, to the jurisdiction of any federal or state court
in the City of New York, Borough of Manhattan for purposes of all legal actions or proceedings instituted in connection with the notes
or the indenture. Ecopetrol has appointed Corporation Service Company (CSC), 19 West 44th Street, Suite 200, New York, New York 10036
as its authorized agent upon which service of process may be served in any such action relating to the notes or the indenture.
Regarding the Trustee
The trustee is permitted to
engage in other transactions with Ecopetrol and its subsidiaries from time to time, provided that if the trustee acquires any conflicting
interest it must eliminate the conflict upon the occurrence of an event of default, or else resign.
Ecopetrol may at any time
remove the trustee at its office or agency in the City of New York designated for the foregoing purposes and may from time to time rescind
such designations.
No Personal Liability of
Shareholders, Officers, Directors, or Employees
The indenture provides that
no recourse for the payment of the principal of, premium, if any, or interest on the notes or for any claim based thereon or otherwise
in respect thereof, and no recourse under or upon any obligation, covenant or agreement of Ecopetrol in such indenture, or in the notes
or because of the creation of any indebtedness represented thereby, shall be had against any shareholder, officer, director, employee
or controlling person of Ecopetrol or of any successor thereof.
TAXATION
U.S. Federal Income Tax Considerations
The following discussion is
a summary of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of the notes. Except
where otherwise noted, this discussion applies only to U.S. Holders (as defined below) of notes that purchase the notes at the initial
issue price indicated on the cover of this prospectus supplement and that hold the notes as “capital assets” (generally, property
held for investment). This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative
history, existing final, temporary and proposed U.S. Treasury regulations, administrative pronouncements by the U.S. Internal Revenue
Service (the “IRS”) and judicial decisions, all as of the date hereof and all of which are subject to change (possibly on
a retroactive basis) and to different interpretations.
This discussion does not purport
to address all U.S. federal income tax consequences that may be relevant to a particular holder and holders are urged to consult their
own tax advisors regarding their specific tax situations. The discussion does not address the tax consequences that may be relevant to
holders subject to special tax rules, including, for example:
| · | tax-exempt organizations; |
| · | dealers in securities or currencies; |
| · | traders in securities that elect the mark-to-market method of accounting with respect to their securities
holdings; |
| · | banks or other financial institutions; |
| · | partnerships or other pass-through entities or arrangements for U.S. federal income tax purposes; |
| · | U.S. Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; |
| · | persons subject to special tax accounting rules as a result of any item of gross income with respect to
the notes being taken into account in an “applicable financial statement” (as defined in section 451 of the Code); |
| · | holders that hold the notes as part of a hedge, straddle, conversion or other integrated transaction. |
Further, this discussion does
not address any U.S. federal estate and gift tax consequences, alternative minimum tax consequences, Medicare tax on net investment income
consequences or any state, local and non-U.S. tax consequences of the acquisition, ownership and disposition of the notes.
As used herein, the term “U.S.
Holder” means a beneficial owner of the notes that is, for U.S. federal income tax purposes:
| · | an individual who is a citizen or resident of the United States; |
| · | a corporation (or any other entity taxable as a corporation for U.S. federal income tax purposes), created
or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
| · | an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
| · | a trust if (i) a court within the United States is able to exercise primary supervision over its
administration and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust
has an election in effect under current U.S. Treasury regulations to be treated as a U.S. person. |
If a partnership (or any other
entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds the notes, the tax treatment of the partnership
and a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Such partner
or partnership should consult its own tax advisor as to the consequences to it of acquisition, ownership and disposition of the notes.
Characterization of the Notes
In certain circumstances,
we may be obligated to pay amounts in excess of stated interest or principal on the notes. Our obligation to pay such excess amounts may
cause the IRS to take the position that the notes are “contingent payment debt instruments” for U.S. federal income tax purposes.
If the IRS is successful in such an assertion, the timing and amount of income included and the character of gain recognized with respect
to the notes would likely be different from the consequences discussed herein. Notwithstanding this possibility, we do not believe that
the notes are contingent payment debt instruments, and, consequently, we do not intend to treat the notes as contingent payment debt instruments.
Such determination by us is binding on all holders unless a holder discloses its differing position in a statement attached to its timely
filed U.S. federal income tax return for the taxable year during which a note was acquired. The remainder of this discussion assumes that
the notes will not be treated as contingent payment debt instruments for U.S. federal income tax purposes.
U.S. Holders
Stated Interest
Payments of stated interest
to a U.S. Holder on a note, including any amount withheld in respect of any taxes and any Additional Amounts, will be includible in such
U.S. Holder’s gross income as ordinary interest income at the time such payments are received or accrued in accordance with such
U.S. Holder’s regular method of tax accounting for U.S. federal income tax purposes. In addition, interest on the notes will be
treated as foreign source income for U.S. federal income tax purposes and generally will constitute “passive category” income
for most U.S. Holders. Subject to generally applicable restrictions and conditions (including a minimum holding period requirement and
a requirement that the withholding tax constitutes a “covered withholding tax” under recent Treasury regulations), a U.S.
Holder generally will be entitled to a foreign tax credit in respect of any foreign income taxes withheld on interest payments on the
notes. Alternatively, the U.S. Holder may deduct such taxes in computing taxable income for U.S. federal income tax purposes provided
that, if the tax is a “covered withholding tax,” the U.S. Holder does not elect to claim a foreign tax credit for any foreign
income taxes paid or accrued for the relevant taxable year. The rules governing the foreign tax credit are complex and their various requirements,
including that a “covered withholding tax” be imposed on nonresidents in lieu of a generally applicable tax that satisfies
the regulatory definition of an “income tax”, may be difficult to apply. U.S. Holders are urged to consult their tax advisors
regarding the availability of the foreign tax credit under their particular circumstances.
Sale, Exchange or Other Taxable Disposition
Upon the sale, exchange or
other taxable disposition (including a redemption) of a note, a U.S. Holder generally will recognize taxable gain or loss equal to the
difference, if any, between the amount realized on the sale, exchange or other taxable disposition (other than accrued but unpaid stated
interest, which will be taxable as ordinary income to the extent not previously included in gross income) and the U.S. Holder’s
adjusted tax basis in the note. A U.S. Holder’s adjusted tax basis in a note generally will equal the cost of the note to the U.S.
Holder. Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the note has been held
for more than one year at the time of its sale, exchange or other taxable disposition. Certain non-corporate U.S. Holders (including individuals)
may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital
losses is subject to limitations under the Code.
Any gain or loss realized
on the sale, exchange or other taxable disposition of a note generally will be treated as U.S. source gain or loss, as the case may be.
If any gain from the sale, exchange or other taxable disposition of a note is subject to foreign income tax, a U.S. Holder may not be
able to credit such tax against its U.S. federal income tax liability under the U.S. foreign tax credit limitations of the Code and recent
Treasury Regulations (and, even if treated as a creditable tax, such gain generally would be U.S. source income and the use of the credit
may be limited unless the U.S. Holder has other income derived from foreign sources). Alternatively, the U.S. Holder may deduct such taxes
in computing taxable income for U.S. federal income tax purposes provided that the U.S. Holder does not elect to claim a foreign tax credit
for any foreign income taxes paid or accrued for the relevant taxable year.
U.S. Backup Withholding and Information Reporting
Backup withholding and information
reporting requirements generally apply to payments of principal of, and interest on, a note and to proceeds of the sale or redemption
of a note, to U.S. Holders. Information reporting generally will apply to payments of principal of, and interest on, notes (including
Additional Amounts), and to proceeds from the sale or redemption of notes within the United States, or by a U.S. payor or U.S. middleman,
to a U.S. Holder (other than an exempt recipient). Backup withholding will be required on payments made within the United States, or by
a U.S. payor or U.S. middleman, on a note to a U.S. Holder, other than an exempt recipient, if the U.S. Holder fails to furnish its correct
taxpayer identification number or otherwise fails to comply with, or establish an exemption from, the backup withholding requirements.
Backup withholding is not
an additional tax. A holder of notes generally will be entitled to credit any amounts withheld under the backup withholding rules against
its U.S. federal income tax liability or to obtain a refund of the amounts withheld provided the required information is furnished to
the IRS in a timely manner.
Foreign Financial Asset Reporting
Certain U.S. Holders must
report information relating to an interest in certain foreign financial assets such as the notes, subject to certain exceptions (including
an exception for notes held in accounts maintained by certain financial institutions). U.S. Holders should consult their tax advisors
regarding the effect, if any, of this requirement on their ownership and disposition of the notes.
The above description is not intended to
constitute a complete analysis of all tax consequences relating to the ownership of notes. Prospective purchasers of notes should consult
their own tax advisors concerning the tax consequences in their particular situations.
Certain Colombian Tax Considerations
The following summarizes certain
Colombian tax considerations that may be relevant to you if you invest in the notes. This summary is based on laws, regulations, rulings
and decisions now in effect in Colombia which may change. Although unlikely, changes in regulations or official interpretations could
apply retroactively and could affect the continued validity of this summary.
Under current Colombian law,
interest paid by a Colombian borrower to foreign non-resident lenders is typically deemed Colombian source income, and it is therefore
subject to income tax via withholdings (at 15% or 20%, depending on the term of the credit and absent a tax treaty that provides otherwise).
However, payments of principal and interest on the notes are not subject to Colombian income tax, including income withholdings, provided
that the holder of the notes is not a Colombian resident and is not domiciled in Colombia, considering that the issuance of the notes
qualifies as an external public debt, which based on Section 218 of the Colombian Tax Code, is tax exempted from all taxes in Colombia
(no tax, impost, charges or any levy is triggered on this type of credit). In addition, gains accrued on the sale or other disposition
of the notes will be sourced as non-Colombian income and, as such, will not be subject to Colombian income withholding tax, provided that
the holder of the notes is not a Colombian resident and is not domiciled in Colombia.
So long as the holders of
the notes are not Colombian residents, there are no Colombian transfer, inheritance, gift or succession taxes applicable to the notes.
An
individual (including a holder of notes) will be deemed to be a tax resident in Colombia if he or she meets any of the following criteria:
· If
such person physically stays in Colombia for more than 183 calendar days within any given 365 consecutive day term.
· If
such person has been in service with the Colombian State or Government in a foreign state in which that person is exempt from taxes during
the time of service by virtue of any provisions of the Vienna Conventions on diplomatic relations.
· If
such person is a Colombian national residing abroad, provided that, additionally, any of the following conditions are met:
o such
person has a spouse or permanent companion, or dependent children, who is a resident of Colombia, or
o 50%
or more of such person’s total income is sourced in Colombia, or
o 50%
or more of such person’s assets are managed in Colombia, or
o 50%
or more of such person’s assets are deemed to be owned in Colombia, or
o such
person has been summoned by the Colombian Tax Office to provide proof of residency in another country (other than Colombia) and has failed
to provide such evidence, or
o such
person is a resident of a country deemed as a non-cooperative jurisdiction, subject to low to nil taxation, or to a preferential regime
under Colombian law.
A Colombian national considered
a tax resident due to the abovementioned criteria will not be considered as a tax resident in Colombia if 50% or more of such person’s
annual income is sourced in the jurisdiction in which such person is domiciled, or if 50% or more of such person’s assets are located
in the jurisdiction in which such person is domiciled.
A foreign
company or entity is deemed to be a “national” or a “Colombian entity” and, therefore, subject to income tax in
Colombia on its worldwide income, if it meets any of the following criteria:
| · | It has its place of effective management in Colombia; |
| · | It has its main domicile in Colombian territory; or, |
| · | It is incorporated under Colombian laws. |
In addition,
permanent establishments of foreign non-resident entities or individuals are subject to income tax on their attributable worldwide source
income. A foreign entity or a non-resident individual has a permanent establishment in Colombia when said entity or individual performs
activities in Colombia through: (i) a fixed place of business (e.g., branches, factories, offices, among others) through which it undertakes
its business activities in whole or in part, or (ii) an agent (either individuals or entities), who is not independent and habitually
has or exercises in Colombia authority to execute agreements on behalf of the foreign company or non-resident individual.
Other changes
introduced in tax related laws and regulations, and interpretations thereof, can affect tax burdens by increasing tax rates and fees,
creating new taxes, limiting tax deductions, and eliminating tax-based incentives and non-taxed income. In addition, tax authorities or
courts may interpret tax regulations differently than we do, which could result in tax litigation and associated costs and penalties.
This summary does not describe
all of tax the considerations that may be relevant to you or your situation, you should consult your tax advisor about the tax consequences
of holding the notes.
UNDERWRITING
BBVA Securities Inc., BofA
Securities, Inc. and Citigroup Global Markets Inc. are acting as underwriters (the “underwriters”). Subject to the terms and
conditions set forth in a firm commitment underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters,
and each of the underwriters has agreed, severally and not jointly, to purchase from us, the principal amount of notes, set forth opposite
its name below.
Underwriter |
|
Principal Amount of
Notes |
BBVA Securities Inc. |
|
US$ |
616,667,000 |
BofA Securities, Inc. |
|
US$ |
616,667,000 |
Citigroup Global Markets Inc. |
|
US$ |
616,666,000 |
Total |
|
US$ |
1,850,000,000 |
Subject to the terms and conditions
set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the notes sold under
the underwriting agreement if any of these notes are purchased. If an underwriter defaults, the underwriting agreement provides that the
purchase commitments of the non-defaulting underwriters may be increased, we may procure additional underwriters, or the underwriting
agreement may be terminated.
We have agreed to indemnify
the underwriters and their controlling persons against certain liabilities in connection with this offering, including liabilities under
the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.
The underwriters are offering
the notes, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel,
including the validity of the notes, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters
of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public
and to reject orders in whole or in part. The underwriters may offer and sell the notes through certain of their respective affiliates.
Commissions and Discounts
The
underwriters have advised us that the underwriters propose initially to offer the notes to the public at the public offering prices set
forth on the cover page of this prospectus supplement. Any notes sold to securities dealers may be sold by the underwriters, without
our involvement, at a discount from the public offering price less a concession not in excess of 0.150% of the principal amount
of the notes. After the initial offering, the public offering price, concessions or any other term of the offering may be changed.
The expenses of the offering,
not including the underwriting discount, are estimated at US$2,499,016.71 and are payable by us.
New Issue of Notes
The notes constitute a new
issue of securities with no established trading market. We intend to apply to have the notes approved for listing on the New York Stock
Exchange. We have been advised by the underwriters that they presently intend to make a market in the notes after completion of the offering.
However, they are under no obligation to do so and may discontinue any market-making activities at any time without any notice. We cannot
assure the liquidity of the trading market for the notes or that an active public market for the notes will develop. If an active public
trading market for the notes does not develop, the market price and liquidity of the notes may be adversely affected. If the notes are
traded, they may trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar
securities, our operating performance and financial condition, general economic conditions and other factors.
Settlement
We expect that delivery of
the notes will be made to investors on or about January 19, 2024, which will be the seventh business day following the date of this prospectus
supplement (such settlement being referred to as “T+7”). Under Rule 15c6-1 under the Securities Exchange Act of 1934,
trades in the secondary market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise.
Accordingly, purchasers who wish to trade notes prior to the second business day before the date of delivery of the notes hereunder will
be required, by virtue of the fact that the notes initially settle in T+7, to specify an alternate settlement arrangement at the time
of any such trade to prevent a failed settlement. Purchasers of the notes who wish to trade the notes prior to the second business day
before their date of delivery hereunder should consult their advisors.
No Sales of Similar Securities
We have agreed that we will
not, for a period of 30 days after the date of this prospectus supplement without the prior written consent of the underwriters, offer,
sell, contract to sell or otherwise dispose of any debt securities in the international capital markets issued or guaranteed by us and
having a tenor of more than one year, except for the notes sold to the underwriters pursuant to the underwriting agreement.
Short Positions
In connection with the offering,
the underwriters may purchase and sell the notes in the open market. These transactions may include short sales, stabilizing transactions
and purchases on the open market to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater
principal amount of notes than they are required to purchase in the offering. The underwriters must close out any short position by purchasing
notes in the open market. A short position is more likely to be created if the underwriters are concerned that there may be downward pressure
on the price of the notes in the open market after pricing that could adversely affect investors who purchase in the offering.
Similar to other purchase
transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market
price of the notes or preventing or retarding a decline in the market price of the notes. As a result, the price of the notes may be higher
than the price that might otherwise exist in the open market.
Neither we nor any of the
underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above
may have on the price of the notes. In addition, neither we nor any of the underwriters make any representation that the underwriters
will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Other Relationships
The
underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment,
hedging, financing and brokerage activities. The underwriters and certain of their affiliates have, from time to time, performed, and
may in the future perform, various commercial and investment banking and financial advisory services for the issuer and its affiliates,
for which they received or may in the future receive customary fees and expenses. The underwriters are also acting as dealer managers
under the Tender Offer. See “Use of Proceeds.”
In addition, in the ordinary
course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively
trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account
and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours
or our affiliates. Certain of the underwriters or their affiliates are lenders to Ecopetrol and routinely hedge, and certain other of
those underwriters or their affiliates may hedge, their credit exposure to us consistent with their customary risk management policies.
Typically, such underwriters and their affiliates would hedge such exposure by entering into transactions which consist of either the
purchase of credit default swaps or the creation of short positions in our securities, including potentially the notes offered hereby.
Any such short positions could adversely affect future trading prices of the notes offered hereby. The underwriters and their affiliates
may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial
instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Notice to Prospective Investors
Colombia
The notes have not been and
will not be authorized by the Colombian Superintendency of Finance (Superintendencia Financiera de Colombia) and will not be registered
with the Colombian National Registry of Securities and Issuers (Registro Nacional de Valores y Emisores) or on the Colombian Stock
Exchange (Bolsa de Valores de Colombia). Therefore, the notes may not be offered, sold or negotiated in Colombia, except under
circumstances which do not constitute a public offering of securities under applicable Colombian securities laws and regulations. Furthermore,
foreign financial entities must abide by the terms of Part 4 of Decree 2555 of 2010 and Regulation 029 of 2014 issued by the Colombian
Superintendency of Finance, as modified, complemented or substituted from time to time, to privately market and offer the notes to their
Colombian clients.
European Economic Area
This
prospectus supplement has been prepared on the basis that any offer of the securities referred to herein in any Member State of the EEA
(each, a “Member State”) will be made pursuant to an exemption under the Prospectus Regulation from the requirement
to publish a prospectus for offers of the notes. Accordingly any person making or intending to make an offer in a Member State of notes
which are the subject of the offering contemplated in this preliminary prospectus supplement may only do so in circumstances in which
no obligation arises for the Company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Regulation,
in each case, in relation to such offer. Neither the Company nor the underwriters have authorized, nor do they authorize, the making of
any offer of notes in circumstances in which an obligation arises for the Company or the underwriters to publish a prospectus for such
offer. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129. This paragraph is subject to the paragraph
below.
The
notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available
to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as
defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”), (ii) a customer within the meaning
of Directive 2016/97/EU (the “Insurance Distribution Directive”), where that customer would not qualify as a professional
client as defined in point (10) of Article 4(1) of MiFID II or (iii) not a qualified investor as defined in the Prospectus Regulation.
Consequently, no key information document required by the EU PRIIPs Regulation for offering or selling the notes or otherwise making them
available to retail investors in the EEA or the UK has been prepared and therefore offering or selling the notes or otherwise making them
available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation.
United Kingdom
This
prospectus supplement has been prepared on the basis that any offer of the securities referred to herein in the UK will be made
pursuant to an exemption under the UK Prospectus Regulation from the requirement to publish a prospectus for offers of the notes. Accordingly
any person making or intending to make an offer in the UK of notes which are the subject of the offering contemplated in this prospectus
supplement may only do so in circumstances in which no obligation arises for the Company or any of the initial purchasers to publish a
prospectus pursuant to Article 3 of the UK Prospectus Regulation, in each case, in relation to such offer. Neither the Company nor the
initial purchasers have authorized, nor do they authorize, the making of any offer of notes in circumstances in which an obligation arises
for the Company or the joint bookrunners to publish a prospectus for such offer. The expression “Prospectus Regulation” means
Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA. This paragraph is subject to the paragraph below.
The
notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available
to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more)
of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue
of the European Union (Withdrawal) Act 2018 (“EUWA”); (ii) a customer within the meaning of the provisions of the FSMA and
any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional
client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA;
or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the
EUWA. Consequently no key information document required by UK PRIIPs Regulation for offering or selling the notes or otherwise making
them available to retail investors in the UK has been prepared and therefore offering or selling the notes or otherwise making them available
to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
Argentina
The
notes are not authorized for public offering in Argentina by the Comisión Nacional de Valores pursuant to Argentine
Public Offering Law No. 17,811, as amended, and they shall not be sold publicly. Therefore, any transaction carried out in Argentina must
be made privately.
Brazil
The
offer and sale of our notes has not been, and will not be, registered (or exempted from registration) with the Brazilian Securities Commission
(Comissão de Valores Mobiliários—CVM) and, therefore, will not be carried out by any means that would constitute
a public offering in Brazil under Law No. 6,385, of December 7, 1976, as amended, under CVM Rule No. 400, of December 29, 2003,
as amended, or under CVM Rule No. 476, of January 16, 2009, as amended. Any representation to the contrary is untruthful and unlawful.
As a consequence, our notes cannot be publicly offered and sold in Brazil or to any investor resident or domiciled in Brazil. Documents
relating to the offering of our notes, as well as information contained therein, may not be supplied to the public in Brazil, nor used
in connection with any public offer for subscription or sale of notes to the public in Brazil.
Canada
The
notes may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as
defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted
clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any
resale of the notes must be made in accordance with an exemption form, or in a transaction not subject to, the prospectus requirements
of applicable securities laws.
Securities legislation in
certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement
(including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by
the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should
refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights
or consult with a legal advisor.
Pursuant
to section 3A.3 (or, in case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National
Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements
of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Cayman Islands
This prospectus supplement
does not constitute a public offer of the notes, whether by way of sale or subscription, in the Cayman Islands. The notes have not been
offered or sold, and will not be offered or sold, directly or indirectly, in the Cayman Islands.
Chile
Notice to Chilean Investors
Pursuant to the Securities
Market Law of Chile and Norma de Carácter General (Rule) No. 336, dated June 27, 2012, issued by the Financial Market Commission
of Chile (Comisión para el Mercado Financiero, or “CMF”) (“Rule 336”), the notes may be privately
offered to certain qualified investors identified as such by Rule 336 (which in turn are further described in Rule No. 216, dated June
12, 2008, and rule 410 dated July 27, 2016, both of the CMF).
Rule 336 requires the following
information to be made to prospective investors in Chile:
1. Date of commencement
of the offer: January 9, 2024. The offer of the notes is subject to Rule 336;
2. The subject matter
of this offer are securities not registered in the securities registry (Registro de Valores) of the CMF, nor in the foreign securities
registry (Registro de Valores Extranjeros) of the CMF; hence, the notes are not subject to the oversight of the CMF;
3. Since the notes
are not registered in Chile there is no obligation by the issuer to deliver public information about the notes in Chile; and
4. The notes shall
not be subject to public offering in Chile unless registered in the relevant securities registry of the CMF.
China
The notes may not be offered
or sold directly or indirectly to the public in the People’s Republic of China (China) and neither this prospectus supplement, which
has not been submitted to the Chinese Securities and Regulatory Commission, nor any offering material or information contained herein
relating to the notes may be supplied to the public in China or used in connection with any offer for the subscription or sale of notes
to the public in China. The notes may only be offered or sold to China-related organizations which are authorized to engage in foreign
exchange business and offshore investment from outside of China. Such China-related investors may be subject to foreign exchange control
approval and filing requirements under the relevant Chinese foreign exchange regulations. For the purpose of this paragraph, China does
not include Taiwan and the special administrative regions of Hong Kong and Macau.
The Dubai International
Financial Centre
This prospectus supplement
relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (DFSA). This prospectus
supplement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be
delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection
with Exempt Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and
has no responsibility for the prospectus supplement. The notes to which this prospectus supplement relates may be illiquid and/or subject
to restrictions on their resale. Prospective purchasers of the notes offered should conduct their own due diligence on the notes. If you
do not understand the contents of this prospectus supplement you should consult an authorized financial advisor.
France
Neither
this prospectus supplement nor any other offering material relating to the notes described in this prospectus supplement has been submitted
to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another
member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The notes have not
been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus supplement
nor any other offering material relating to the notes has been or will be: (i) released, issued, distributed or caused to be released,
issued or distributed to the public in France; or (ii) used in connection with any offer for subscription or sale of the notes to the
public in France. Such offers, sales and distributions will be made in France only to: (a) persons providing investment services relating
to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille
pour compte de tiers), and/or (b) qualified investors (investisseurs qualifiés) acting for their own account, and/or
(c) a limited circle of investors (cercle restreint) acting for their own account, as defined in, and in accordance with, Articles
L. 411-1, L. 411-2, D. 411-1 and D. 411-4 of the French Code monétaire et financier.
The
notes may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of
the French Code monétaire et financier.
Germany
The
notes will not be offered, sold or publicly promoted or advertised in the Federal Republic of Germany other than in compliance with the
German Securities Prospectus Act (Gesetz uber die Erstellung, Billigung und Veroffentlichung des Prospekts, der beim offentlicken Angebot
von Wertpapieren oder bei der Zulassung von Wertpapieren zum Handel an einem organisierten Markt zu veroffenlichen ist—Wertpapierprospektgesetz)
as of June 22, 2005, effective as of July 1, 2005, as amended, or any other laws and regulations applicable in the Federal Republic
of Germany governing the issue, offering and sale of securities. No selling prospectus (Verkaufsprospeckt) within the meaning of
the German Securities Selling Prospectus Act has been or will be registered within the Financial Supervisory Authority of the Federal
Republic of Germany or otherwise published in Germany.
Hong Kong
The
notes may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer
to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong)
(“Companies (Winding Up and Miscellaneous Provisions) Ordinance”) or which do not constitute an invitation to the public within
the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“Securities and Futures Ordinance”),
or (ii) to “professional investors” as defined in the Securities and Futures Ordinance and any rules made thereunder,
or (iii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding
Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the notes may be issued or may be
in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the
contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws
of Hong Kong) other than with respect to notes which are or are intended to be disposed of only to persons outside Hong Kong or only to
“professional investors” in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
Ireland
The
notes will not be placed in or involving Ireland otherwise than in conformity with the provisions of the Intermediaries Act 1995 of Ireland
(as amended) including, without limitation, Sections 9 and 23 (including advertising restrictions made thereunder) thereof and the codes
of conduct made under Section 37 thereof.
Israel
This
document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with
or approved by the Israel Securities Authority. In Israel, this prospectus supplement is being distributed only to, and is directed only
at, and any offer of the notes is directed only at, (i) a limited number of persons in accordance with the Israeli Securities Law and
(ii) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment
in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange,
underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as
defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case, purchasing
for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum).
Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of its meaning
and agree to it.
Italy
The offering of the notes
has not been registered pursuant to Italian securities legislation and, accordingly, no notes may be offered or sold in the Republic of
Italy in a solicitation to the public, and sales of the notes in the Republic of Italy shall be effected in accordance with all Italian
securities, tax and exchange control and other applicable laws and regulation.
No
offer, sale or delivery of the notes or distribution of copies of any document relating to the notes will be made in the Republic of Italy
except: (a) to “Professional Investors”, as defined in Article 31.2 of Regulation No. 11522 of 1 July 1998 of the Commissione
Nazionale per la Società e la Borsa, or the CONSOB, as amended, or CONSOB Regulation No. 11522, pursuant to Article 30.2 and
100 of Legislative Decree No. 58 of 24 February 1998, as amended, or the Italian Financial Act; or (b) in any other circumstances where
an express exemption from compliance with the solicitation restrictions applies, as provided under the Italian Financial Act or Regulation
No. 11971 of 14 May 1999, as amended.
Any
such offer, sale or delivery of the notes or any document relating to the notes in the Republic of Italy must be: (i) made by investment
firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative
Decree No. 385 of 1 September 1993 as amended, the Italian Financial Act, CONSOB Regulation No. 11522 and any other applicable
laws and regulations; and (ii) in compliance with any other applicable notification requirement or limitation which may be imposed by
CONSOB or the Bank of Italy.
Investors
should also note that, in any subsequent distribution of the notes in the Republic of Italy, Article 100-bis of the Italian Financial
Act may require compliance with the law relating to public offers of securities. Furthermore, where the notes are placed solely with professional
investors and are then systematically resold on the secondary market at any time in the 12 months following such placing, purchasers
of notes who are acting outside of the course of their business or profession may in certain circumstances be entitled to declare such
purchase void and to claim damages from any authorized person at whose premises the notes were purchased, unless an exemption provided
for under the Italian Financial Act applies.
Japan
The securities have not been
and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The
securities may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any
person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale,
directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration
requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.
Kuwait
The notes have not been authorized
or licensed for offering, marketing or sale in the State of Kuwait. The distribution of this prospectus supplement and the offering and
sale of the notes in the State of Kuwait is restricted by law unless a license is obtained from the Kuwait Ministry of Commerce and Industry
in accordance with Law 31 of 1990. Persons into whose possession this prospectus supplement comes are required by us and the underwriters
to inform themselves about and to observe such restrictions. Investors in the State of Kuwait who approach us or any of the international
underwriters to obtain copies of this prospectus supplement are required by us and the international underwriters to keep such prospectus
supplement confidential and not to make copies thereof or distribute the same to any other person and are also required to observe the
restrictions provided for in all jurisdictions with respect to offering, marketing and the sale of the notes.
Mexico
The
notes have not been registered in Mexico with the Securities Section (Sección de Valores) of the National Securities Registry
(Registro Nacional de Valores) maintained by the Comisión Nacional Bancaria y de Valores, and that no action has
been or will be taken that would permit the offer or sale of the notes in Mexico absent an available exemption under Article 8
of the Mexican Securities Market Law (Ley del Mercado de Valores).
Netherlands
The notes may not be offered,
sold, transferred or delivered, in or from the Netherlands, as part of the initial distribution or as part of any reoffering, and neither
this prospectus supplement nor any other document in respect of the international offering may be distributed in or from the Netherlands,
other than to individuals or legal entities who or which trade or invest in securities in the conduct of their profession or trade (which
includes banks, investment banks, securities firms, insurance companies, pension funds, other institutional investors and treasury departments
and finance companies of large enterprises), in which case, it must be made clear upon making the offer and from any documents or advertisements
in which a forthcoming offering of notes is publicly announced that the offer is exclusively made to said individuals or legal entities.
Peru
The
notes and this prospectus supplement have not been registered in Peru under the Decreto Supremo N° 093-2002-EF: Texto Único
Ordenado de la Ley del Mercado de Valores (the “Peruvian Securities Law”) or before the Superintendencia del
Mercado de Valores and cannot be offered or sold in Peru except in a private offering under the meaning of the Peruvian Securities
Laws. The Peruvian Securities Law provides that an offering directed exclusively to “institutional investors” (as defined
in the Institutional Investors Market Regulations) qualifies as a private offering. The notes acquired by institutional investors in Peru
cannot be transferred to a third party, unless such transfer is made to another institutional investor or the notes have been previously
registered with the Registro Público del Mercado de Valores.
Portugal
No document, circular, advertisement
or any offering material in relation to the notes has been or will be subject to approval by the Portuguese Securities Market Commission
(Comissão do Mercado de Valores Mobiliários), or the CMVM. No notes may be offered, re-offered, advertised, sold,
re-sold or delivered in circumstances which could qualify as a public offer (oferta pública) pursuant to the Portuguese
Securities Code (Código dos Valores Mobiliários), and/or in circumstances which could qualify the issue of the notes
as an issue or public placement of securities in the Portuguese market. This prospectus supplement and any document, circular, advertisements
or any offering material may not be directly or indirectly distributed to the public. All offers, sales and distributions of the notes
have been and may only be made in Portugal in circumstances that, pursuant to the Portuguese Securities Code, qualify as a private placement
(oferta particular), all in accordance with the Portuguese Securities Code. Pursuant to the Portuguese Securities Code, the private
placement in Portugal or to Portuguese residents of the notes by public companies (sociedades abertas) or by companies that are
issuers of securities listed on a market must be notified to the CMVM for statistical purposes. Any offer or sale of the notes in Portugal
must comply with all applicable provisions of the Portuguese Securities Code and any applicable CMVM Regulations and all relevant Portuguese
laws and regulations. The placement of the notes in the Portuguese jurisdiction or to any entities which are resident in Portugal, including
the publication of a prospectus supplement, when applicable, must comply with all applicable laws and regulations in force in Portugal
and with the Prospectus Directive, and such placement shall only be performed to the extent that there is full compliance with such laws
and regulations.
Qatar
The notes described in this
prospectus supplement have not been, and will not be, offered, sold or delivered, at any time, directly or indirectly in the State of
Qatar in a manner that would constitute a public offering. This prospectus supplement has not been, and will not be, registered with or
approved by the Qatar Financial Markets Authority or Qatar Central Bank and may not be publicly distributed. This prospectus supplement
is intended for the original recipient only and must not be provided to any other person. It is not for general circulation in the State
of Qatar and may not be reproduced or used for any other purpose.
Saudi Arabia
Any
investor in the Kingdom of Saudi Arabia or who is a Saudi person (a Saudi Investor) who acquires the notes pursuant to this offering should
note that the offer of the notes is an exempt offer under sub-paragraph (3) of paragraph (a) of Article 16 of the “Offer
of Securities Regulations” as issued by the Board of the Capital Market Authority resolution number 2-11-2004 dated October 4, 2004
and amended by the resolution of the Board of Capital Market Authority resolution number 1-33-2004 dated December 21, 2004 (the KSA Regulations).
The notes may be offered to no more than 60 Saudi Investors and the minimum amount payable per Saudi Investor must not be less than Saudi
Riyal (SR) 1 million or an equivalent amount. The offer of notes is therefore exempt from the public offer provisions of the KSA Regulations,
but is subject to the following restrictions on secondary market activity: (a) A Saudi Investor (the transferor) who has acquired notes
pursuant to this exempt offer may not offer or sell notes to any person (referred to as a transferee) unless the price to be paid by the
transferee for such notes equals or exceeds SR1 million. (b) If the provisions of paragraph (a) cannot be fulfilled because the price
of the notes being offered or sold to the transferee has declined since the date of the original exempt offer, the transferor may offer
or sell the notes to the transferee if their purchase price during the period of the original exempt offer was equal to or exceeded SR1
million. (c) If the provisions of paragraphs (a) and (b) cannot be fulfilled, the transferor may offer or sell the notes if he/she sells
his entire holding of the notes to one transferee.
Singapore
This
prospectus supplement has not been and will not be registered as a prospectus with the Monetary Authority of Singapore under the Securities
and Futures Act, Chapter 289 of Singapore (the “SFA”). Accordingly, each underwriter has not offered or sold any notes or
caused such notes to be made the subject of an invitation for subscription or purchase and will not offer or sell such notes or cause
such notes to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate
or distribute, this prospectus supplement or any other document or material in connection with the offer or sale, or invitation for subscription
or purchase, of such notes, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor
under Section 274 of the SFA, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in
accordance with the conditions specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions
of, any other applicable provision of the SFA.
Where
the notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not
an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire notes of
which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited
investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described)
in that trust shall not be transferred within six months after that corporation or that trust has acquired the notes pursuant to an offer
made under Section 275 of the SFA, except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined
in Section 275(2) of the SFA), or to any person arising from an offer referred to in Section 275(1A), or Section 276(4)(i)(B) of the SFA;
(ii) where no consideration is or will be given for the transfer; (iii) where the transfer is by operation of law; (iv) as specified in
Section 276(7) of the SFA; or (v) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures)
Regulations 2005 of Singapore.
South Korea
The notes have not been and
will not be registered with the Financial Services Commission of Korea for public offering in Korea under the Financial Investment Services
and Capital Markets Act, or the FSCMA. The notes may not be offered, sold or delivered, or offered or sold for re-offering or resale,
directly or indirectly, in Korea or to any Korean resident (as such term is defined in the Foreign Exchange Transaction Law of Korea,
or FETL) other than the Accredited Investors (as such term is defined in Article 11 of the Presidential Decree of the FSCMA), for a period
of one year from the date of issuance of the notes except pursuant to the applicable laws and regulations of Korea, including the FSCMA
and the FETL and the decrees and regulations thereunder. The notes may not be resold to Korean residents unless the purchaser of the notes
complies with all applicable regulatory requirements (including but not limited to government reporting requirements under the FETL and
its subordinate decrees and regulations) in connection with the purchase of the notes.
Spain
The notes have not been registered
with the Spanish National Commission for the Securities Market and, therefore, no notes may be publicly offered, sold or delivered, nor
any public offer in respect of the notes made, nor may any prospectus supplement or any other offering or publicity material relating
to the notes be distributed in Spain by the international agents or any person acting on their behalf, except in compliance with Spanish
laws and regulations.
Switzerland
This
prospectus supplement is not intended to constitute, and does not constitute, an offer to the public or solicitation to purchase
or invest in the notes described therein. The notes have not been and will not be publicly offered, directly or indirectly, in Switzerland,
within the meaning of the Swiss Financial Services Act (“FinSA”) except (i) to any investor that qualifies as a professional
within the meaning of the FinSA, and (ii) in any other circumstance qualifying as an exemption within the meaning of article 36 paragraph
1 of the FinSA, provided in each case, that no such offer of notes referred to in clauses (i) and (ii) above shall require the publication
of a prospectus for offers of the notes in Switzerland pursuant to FinSA. The notes have not been and shall not be admitted to any trading
venue (exchange or multilateral trading facility) in Switzerland.
United Arab Emirates
The notes have not been, and
are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (U.A.E.) other than in compliance with the laws
of the U.A.E. Prospective investors in the Dubai International Financial Centre should have regard to the specific notice to prospective
investors in the Dubai International Financial Centre set out below. The information contained in this prospectus supplement does not
constitute a public offer of the notes in the U.A.E. in accordance with the Commercial Companies Law (Federal Law No. 8 of 1984 of the
U.A.E., as amended) or otherwise and is not intended to be a public offer. This prospectus supplement has not been approved by or filed
with the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or the Dubai Financial Services Authority,
or DFSA. If you do not understand the contents of this prospectus supplement you should consult an authorized financial adviser. This
prospectus supplement is provided for the benefit of the recipient only, and should not be delivered to, or relied on by, any other person.
ENFORCEMENT
OF CIVIL LIABILITIES
Ecopetrol is organized under
the laws of Colombia. Ecopetrol’s directors and most of its executive officers and controlling persons named in this prospectus
supplement are residents of Colombia, and substantially all of their assets are located outside the United States. Although Ecopetrol
will appoint an agent for service of process in the United States, it may not be possible for you to effect service of process within
the United States upon such persons or Ecopetrol, including with respect to matters arising under federal securities laws of the United
States, or to enforce against such persons or Ecopetrol judgments of U.S. courts based on the civil liability provisions of the U.S. federal
securities laws.
Ecopetrol has been advised
by Brigard & Urrutia Abogados S.A.S., its Colombian counsel, that the Colombian Supreme Court of Justice will enforce a U.S. judgment
predicated on the U.S. securities laws through a proceeding known under Colombian law as “exequatur”. The Colombian Supreme
Court of Justice will enforce a foreign judgment without reconsideration of the merits, only if the judgment satisfies the following requirements
set forth in Articles 605 through 607 of Law 1564 of 2012 (Código General del Proceso):
1. a
treaty or convention exists between Colombia and the country where the judgment was granted relating to the recognition and enforcement
of foreign judgments or, in the absence of such treaty or convention, there is reciprocity in the recognition of foreign judgments of
the same nature between the courts of the relevant jurisdiction and the courts of Colombia;
2. the
foreign judgment does not relate to “in rem” rights vested in assets that were located in Colombia at the time the suit was
filed;
3. the
foreign judgment does not contravene or conflict with Colombian laws relating to public order other than those governing judicial procedures;
4. the
foreign judgment, in accordance with the laws of the country in which it was rendered, is final and not subject to appeal;
5. a
duly legalized copy of the judgment (together with an official translation into Spanish if the judgment is issued in a foreign language)
has been presented to the Supreme Court of Colombia;
6. the
foreign judgment does not refer to any matter upon which Colombian courts have exclusive jurisdiction;
7. no
proceedings are pending in Colombia with respect to the same subject matter, and no final judgment has been awarded in any proceeding
in Colombia on the same subject matter;
8. in
the proceedings commenced before the foreign court that issued the judgment, the defendant was served process in accordance with the law
of such jurisdiction and was given an opportunity to defend itself against the action; and
9. the
legal requirements pertaining to the “exequatur” proceedings have been observed.
We cannot assure you that
a Colombian court would enforce a judgment issued by a U.S. court with respect to the notes based on U.S. securities laws. In addition,
certain remedies available under provisions of the U.S. securities laws may not be admitted or enforced by Colombian courts.
The United States and Colombia
do not have a bilateral treaty providing for automatic reciprocal recognition and enforcement of judgments in civil and commercial matters.
However, Colombia is a party to international treaties such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, the 1975 Inter-American Convention on International Commercial Arbitration, and the 1965 Washington Convention for the Settlement
of Disputes between States and Nationals of Other States. Pursuant to law 1563 of 2012, international arbitral awards issued in Colombia
are not subject to “exequatur” or recognition proceedings.
The Supreme Court of Colombia
has in the past accepted that reciprocity exists when it has been proven that either a U.S. court has enforced a Colombian judgment or
that a U.S. court would enforce a foreign judgment, including a judgment issued by a Colombian court. However, such enforceability decisions
are considered by the Colombian Supreme Court of Justice on a case-by-case basis.
Proceedings for execution
of a money judgment by attachment or execution against any assets or property located in Colombia would be within the exclusive jurisdiction
of Colombian courts. In the course of the “exequatur” proceedings, both the plaintiff and the defendant are afforded the opportunity
to request that evidence be collected in connection with the requirements listed above; also, before the judgment is rendered, each party
may file final allegations in support of such party’s position.
Assuming that a foreign judgment
complies with the standards set forth in the preceding paragraphs and the absence of any condition referred to above that would render
a foreign judgment not subject to recognition under Colombian law, such foreign judgment would be enforceable in Colombia in an enforcement
proceeding under the laws of Colombia, provided that the Colombian Supreme Court has previously granted exequatur upon the foreign judgment.
We reserve our right to plead
sovereign immunity under the United States Foreign Sovereign Immunities Act of 1976 with respect to actions brought against us under United
States federal securities laws or any state securities laws. See “Risk Factors – We may claim immunity under the Foreign Sovereign
Immunities Act with respect to actions brought against us under the U.S. securities laws and your ability to sue or recover may be limited
under U.S. and Colombian law.”
WHERE YOU CAN FIND MORE INFORMATION
We file annual reports, current
reports and other information with the SEC. You may read and copy any document that we file at the Public Reference Room of the SEC at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public from the SEC’s website at http://www.sec.gov.
INCORPORATION BY REFERENCE
We are “incorporating
by reference” specified documents that we have filed with the SEC, which means that we can disclose important information to you
by referring you to those documents that are considered part of this prospectus supplement. Information that we subsequently file with
the SEC will automatically update and supersede this information. We incorporate by reference:
You
may request a copy of any document that has not been delivered with this prospectus, at no cost, by writing or telephoning Ecopetrol S.A.
at: Carrera 13 No. 36-24, Bogotá, Republic of Colombia, telephone (571) 234-5190, e-mail: investors@ecopetrol.com.co,
Attention: Carolina Tovar Aragón, Investor Relations Officer, or by contacting the trustee at the address indicated on the inside
back cover of this prospectus. To ensure timely delivery, investors must request this information no later than five business days
before the date they must make their investment decision.
LEGAL MATTERS
Unless otherwise indicated,
Shearman & Sterling LLP, our United States counsel, will pass upon the validity under New York law of the notes and Brigard &
Urrutia Abogados S.A.S. will pass upon certain legal matters governed by Colombian law with respect to the notes. The validity of the
notes will also be passed upon for the underwriters by Milbank LLP, the underwriters’ United States counsel, and Gómez-Pinzón
Abogados S.A.S., who will pass upon certain legal matters governed by Colombian law with respect to the notes.
EXPERTS
The consolidated financial
statements of Ecopetrol S.A. incorporated in this prospectus supplement by reference to Ecopetrol S.A.’s Annual Report (Form 20-F) for the year ended December 31, 2022, and the effectiveness of Ecopetrol S.A.’s internal control over financial reporting as of
December 31, 2022 have been audited by Ernst & Young Audit S.A.S., independent registered public accounting firm, as set forth in
their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements and Ecopetrol S.A.
management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2022 are incorporated herein
by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The summary reports of Ryder
Scott, LP, Sproule International Limited, DeGolyer and MacNaughton and Gaffney, Cline & Associates, Inc., each independent petroleum
engineering consultants, referenced in the 2022 Annual Report, which is incorporated by reference herein, have been referenced in reliance
upon the authority of the firms as experts in estimating proved oil and gas reserves.
PROSPECTUS
Ecopetrol S.A.
ORDINARY SHARES PREFERRED SHARES
DEBT SECURITIES
GUARANTEED DEBT SECURITIES
We may offer and sell, from time to time, in
one or more offerings, the securities covered by this prospectus.
We may offer and sell the securities covered
by this prospectus to or through underwriters, dealers and agents, or directly to purchasers on a continuous or delayed basis. We will
provide the specific terms and prices of the securities that we may offer in supplements to this prospectus or other offering materials.
The prospectus supplements or other offering materials may also add to, update or change information contained in this prospectus. This
prospectus may not be used to offer or sell any securities unless accompanied by a prospectus supplement or other offering materials.
You should read this prospectus and any applicable prospectus supplement or other offering materials carefully before you invest in
the securities.
Our ordinary shares are listed on the Bolsa de
Valores de Colombia under the symbol “ECOPETROL”. Our ordinary shares in the form of American Depositary Receipts are listed
on the New York Stock Exchange under the symbol “EC”.
Investing in our securities involves risks.
You should carefully read the risks that are described in the “Risk Factors” section beginning on page 2 of this prospectus,
in the “Risk Factors” section of our Annual Reports on Form 20-F filed with the Securities and Exchange Commission and
in any applicable prospectus supplement or other offering materials before investing in our securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is May 28, 2021.
Table of Contents
ABOUT THIS PROSPECTUS
The information contained in this prospectus
is not complete and may be changed. You should rely only on the information provided in or incorporated by reference in this prospectus,
any prospectus supplement, or any other offering materials or documents to which we otherwise refer you. We have not authorized anyone
else to provide you with different information. We are not making an offer of any securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this prospectus, any prospectus supplement, any other offering materials as
well as the information contained in any document incorporated by reference is accurate as of any date other than the date of the document
in which such information is contained or such other date referred to in such document, regardless of the time of any sale or issuance
of a security.
This prospectus is part of an “automatic
shelf” registration statement on Form F-3 that we filed with the Securities and Exchange Commission (the “SEC”)
as a “well-known seasoned issuer” (as defined in Rule 405 of the Securities Act of 1933, as amended (the “Securities
Act”)) using a “shelf” registration process. This prospectus provides you with a general description of the securities
we may offer. Each time we sell or issue securities, we will provide a prospectus supplement or other offering materials that will contain
specific information about the terms of that specific offering of securities and the specific manner in which they may be offered. The
prospectus supplement and any other offering materials may also add to, update or change any of the information contained in this prospectus.
The prospectus supplement and any other offering materials may also contain information about any material U.S. federal income tax considerations
relating to the securities described in the prospectus supplement or other offering materials. You should read this prospectus, the applicable
prospectus supplement and any other offering materials, together with the additional information described under “Where You Can
Find More Information” before making an investment decision. This prospectus may not be used to sell our securities unless it
is accompanied by a prospectus supplement, pricing supplement or other offering materials.
This prospectus contains summaries of certain
provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information.
All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have
been filed or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part,
and you may obtain copies of those documents as described below under “Where You Can Find More Information”.
The registration statement that contains this
prospectus (including the exhibits to the registration statement) contains additional information about us and the securities offered
under this prospectus. That registration statement can be read at the SEC web site (www.sec.gov) or at the SEC offices mentioned under
the heading “Where You Can Find More Information”.
WHERE YOU CAN FIND MORE
INFORMATION
We are an SEC registrant subject to the information
requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and accordingly, file with, or
furnish to, the SEC certain reports and other information. As a foreign private issuer, these reports and other information (including
financial information) may be prepared in accordance with the disclosure requirements of Colombia, which differ from those in the United
States. You may read and copy any document we file with or furnish to the SEC at the SEC’s public reference room at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-888-SEC-0330 for further information on the public reference room. Such documents
are also available to the public from the SEC’s website at www.sec.gov.
The SEC allows us to incorporate by reference
the information we file with it into this prospectus, which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file
later with the SEC will automatically update and supersede the previously filed information. We incorporate by reference the documents
listed below and any future annual reports on Form 20-F filed with the SEC pursuant to the Exchange Act, until we complete our offerings
of the securities:
We may also incorporate by reference any Form 6-K
subsequently submitted to the SEC by identifying in such form that it is being incorporated by reference to this prospectus.
You may request a copy of any document that has
not been delivered with this prospectus, at no cost, by writing or telephoning Ecopetrol S.A. at: Carrera 13 No. 36-24, Bogotá,
Republic of Colombia, telephone (571) 234-5190, e-mail: investors@ecopetrol.com.co, Attention: Lina María Contreras Mora, Investor
Relations Officer, or by contacting the trustee at the address indicated on the inside back cover of this prospectus. To ensure timely
delivery, investors must request this information no later than five business days before the date they must make their investment decision.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements
of Ecopetrol S.A. (hereinafter “we”, “us”, “our”, “Ecopetrol” or the “Company”),
within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not
based on historical facts and reflect our expectations for future events and results. Most facts are uncertain because of their nature.
Words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “should”,
“plan”, “potential”, “predicts”, “prognosticate”, “project”, “target”,
“achieve” and “intend”, among other similar expressions, are understood as forward-looking statements. We have
made forward-looking statements that address, among other things:
| · | our exploration and production activities,
including drilling; |
| · | import and export activities; |
| · | our liquidity, cash flow, and sources
of funding; |
| · | our projected and targeted capital
expenditures and other cost commitments and revenues; and |
| · | dates by which certain areas will
be developed or will come on-stream. |
Our forward-looking statements are not guarantees
of future performance and are subject to assumptions that may prove incorrect and to risks and uncertainties that are difficult to predict.
Actual results could differ materially from those expressed or forecast in any forward-looking statements as a result of a variety of
factors. These factors may include, but are not limited to, the following:
| · | general economic and business conditions,
including crude oil and other commodity prices, refining margins and prevailing exchange
rates; |
| · | our ability to obtain financing; |
| · | our ability to find, acquire or gain
access to additional reserves and our ability to develop existing reserves; |
| · | uncertainties inherent in making
estimates of our reserves; |
| · | significant political, economic and
social developments in Colombia and other countries where we do business; |
| · | natural disasters, pandemics and
other public health events, including the coronavirus (“COVID-19”) pandemic,
military operations, terrorist acts, wars or embargoes; |
| · | regulatory developments, including
regulations related to climate change; |
| · | receipt of government approvals and
licenses; |
| · | technical difficulties; and |
| · | other factors discussed in this prospectus
as “Risk Factors”. |
All forward-looking statements attributed to
us are qualified in their entirety by this cautionary statement. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or for any other reason. Accordingly, readers should not place undue reliance on the
forward-looking statements contained in this prospectus.
THE COMPANY
Ecopetrol is a mixed economy company, organized
on August 25, 1951 as Empresa Colombiana de Petróleos. We began our operations as a governmental industrial and commercial
company, responsible for administering Colombia’s hydrocarbon resources and by 1974 operated the Barrancabermeja refinery and the
Cartagena refinery, Colombia’s largest petroleum refineries. In 1970, we adopted our first by-laws as an industrial and commercial
company also responsible for the production and administration of Colombia’s hydrocarbon resources. In 2003 we were transformed
from an industrial and commercial company into a state owned corporation with shares linked to the Ministry of Mines and Energy and renamed
us Ecopetrol S.A. in order to make us more competitive. Prior to our reorganization, our capital expenditures program and access to the
credit markets were limited by the Colombian government which was making its decisions based on its budgetary needs and not on our growth
prospects. In 2006, the government of Colombia authorized us to issue up to 20% of our capital stock in Colombia, subject to the condition
that the Nation control at least 80% of our capital stock and on November 13, 2007, we placed 4,087,723,771 shares in the Bolsa
de Valores de Colombia or BVC, raising approximately COP$5,723 billion and resulting in 482,941 new shareholders. In September 30,
2011, we placed 644,185,868 shares in the BVC, raising approximately COP$2,380 billion and resulting in 219,054 new shareholders. In
these two issuances, minority shareholders obtained 11.51% of our capital stock. Since September 18, 2008, our American Depositary
Receipts have been trading in the New York Stock Exchange under the symbol “EC”.
Our principal offices are located at Carrera
13 No. 36-24, Bogota, Colombia and our telephone number is +571 234 4000.
Please read Section 3: “Business Overview”
in our 2020 Annual Report incorporated by reference herein for further information on our Company.
RISK FACTORS
Our business is subject to significant risks.
You should carefully consider the risks and uncertainties described in this prospectus and the documents incorporated by reference herein,
including the risks and uncertainties described in the section Risk Review—Risk Factors in our 2020 Annual Report,
which is incorporated by reference in this prospectus. Additional risk factors that you should carefully consider may be included in
a prospectus supplement or other offering materials relating to an offering of our securities.
The risks and uncertainties described in this
prospectus, any applicable prospectus supplement or other offering materials as well as the documents incorporated by reference herein
are not the only ones facing us. Additional risks and uncertainties that we do not presently know about or that we currently believe
are not material may also adversely affect our business. If any of the risks and uncertainties described in this prospectus, any applicable
prospectus supplement or other offering materials as well as the documents incorporated by reference herein actually occur, our business,
financial condition and results of operations could be adversely affected in a material way. The occurrence of any of these risks may
cause you to lose all or part of your investment in the offered securities.
OFFER STATISTICS AND EXPECTED
TIMETABLE
We will set forth in the applicable prospectus
supplement or other offering materials a description of the offer statistics and expected timetable of any offering of securities which
may be offered under this prospectus. The prospectus supplement or any other offering materials may also add, update or change information
contained in this prospectus. You should carefully read this prospectus, any prospectus supplement or other offering materials before
you invest in any of our securities.
CAPITALIZATION AND INDEBTEDNESS
The following table sets forth our capitalization
as of March 31, 2021.
This table should be read in conjunction with
the unaudited consolidated interim financial statements prepared in accordance with the principles and accounting standards and financial
information accepted in Colombia (“NCIF”, its acronym in Spanish). These standards are based on the International Financial
Reporting Standards (“IFRS”) and the Interpretations issued by the International Accounting Standards Board (“IASB”)
and other applicable legal rules, which may differ in some respects from those established by other Government control bodies.
The unaudited consolidated interim financial
statements as filed with the Superintendency of Finance (Superintendencia Financiera de Colombia), an English translation of which
is included in the current report on Form 6-K furnished to the SEC on May 28, 2021, are incorporated by reference herein.
| |
As of March 31, 2021 | |
| |
(in thousands of
US dollars)* | | |
(in millions of
Pesos) | |
| |
(unaudited) | |
Cash and cash equivalents | |
| 1,817,949 | | |
| 6,687,543 | |
Short-term liabilities – financial obligations | |
| | | |
| | |
Ecopetrol Bonds – COP Denominated(1) | |
| 17,946 | | |
| 66,017 | |
Ecopetrol Bonds – USD Denominated(2) | |
| 537,005 | | |
| 1,975,437 | |
Ecopetrol Commercial Loans – USD Denominated(3) | |
| 322,260 | | |
| 1,185,472 | |
Bicentenario Syndicated Loan(4) | |
| 64,995 | | |
| 239,091 | |
Invercolsa Commercial Loans – COP Denominated | |
| 19,227 | | |
| 70,729 | |
Ocensa Bonds – USD Denominated(6) | |
| 20,000 | | |
| 73,572 | |
Leases – COP Denominated | |
| 44,721 | | |
| 164,512 | |
Leases – USD Denominated | |
| 16,484 | | |
| 60,639 | |
Commercial loans from related parties | |
| 372,807 | | |
| 1,371,414 | |
Total short term liabilities – financial obligations | |
| 1,415,445 | | |
| 5,206,883 | |
Long-term liabilities – financial obligations | |
| | | |
| | |
Ecopetrol Bonds – COP Denominated(1) | |
| 274,521 | | |
| 1,009,857 | |
Ecopetrol Bonds – USD Denominated(2) | |
| 8,880,095 | | |
| 32,666,496 | |
Ecopetrol Commercial Loans – USD Denominated(3) | |
| 2,092,217 | | |
| 7,696,471 | |
Bicentenario Syndicated Loan(4) | |
| 141,136 | | |
| 519,184 | |
Invercolsa Commercial Loans – COP Denominated | |
| 62,839 | | |
| 231,164 | |
Ocensa Bonds – USD Denominated(5) | |
| 478,471 | | |
| 1,760,114 | |
Leases – COP Denominated | |
| 174,493 | | |
| 641,893 | |
Leases – USD Denominated | |
| 44,030 | | |
| 161,970 | |
Total long-term liabilities – financial obligations | |
| 12,147,802 | | |
| 44,687,149 | |
Equity | |
| 15,808,080 | | |
| 58,151,920 | |
Total capitalization(6) | |
| 29,371,327 | | |
| 108,045,952 | |
* Amounts stated in U.S. dollars have been translated for the convenience
of the reader at the rate of COP$3,678.62 to US$1.00, which is the Representative Market Rate at April 1, 2021, as reported and
certified by the Superintendency of Finance.
| (1) | Corresponds to local bonds issued in 2010 and 2013. |
| (2) | Corresponds to the 5.875% notes due 2023; 4.125% notes due 2025; 7.375%
notes due 2043; the 5.875% notes due 2045; the 5.375% notes due 2026 and the 6.875% notes
due 2030. |
| (3) | Includes the following: (i) US Exim Direct Loan Agreement; (ii) Commercial
Facility Agreement with three international banks; (iii) SACE Facility Agreement with
three international banks; (iv) EKN Facility Agreement with one international bank;
and (v) US Exim Guaranteed Facility with one international bank. These facilities are
related to the modernization project of our subsidiary Refinería de Cartagena S.A.,
assumed by Ecopetrol in 2017. It also includes a committed Facility with a group of international
banks that was disbursed in 2020. |
| (4) | Corresponds to the loan Oleoducto Bicentenario de Colombia S.A.S entered
into with a syndicate of 11 local banks in July 2012 due in July 2024. |
| (5) | Corresponds to the 4.000% notes due 2027 issued by Oleoducto Central
S.A. issued under Rule 144A and Regulation S under the Securities Act. |
| (6) | Includes total current liabilities – Financial obligations plus
total non-current liabilities – financial obligations and equity. |
Since March 31, 2021, there has
not been any material change to our total capitalization.
REASONS FOR THE OFFER AND
USE OF PROCEEDS
Unless otherwise indicated in an accompanying
prospectus supplement, we intend to use the net proceeds from the sale of the securities for general corporate purposes, including capital
expenditures and refinancing indebtedness.
INTERESTS OF EXPERTS AND
COUNSEL
None of our named experts or counsel has been
employed by us on a contingent basis, owns an amount of shares in the Company or our subsidiaries which is material to them, or has a
material, direct or indirect economic interest in the Company or depends on the success of the offering of the securities which may be
offered under this prospectus. Any update or change in the interests of our named experts and counsel will be included in a prospectus
supplement or other offering materials relating to an offering of our securities.
THE OFFER AND LISTING
Offer and Listing Details
American Depositary Receipts
We entered into an amended and restated deposit
agreement with JPMorgan Chase Bank, N.A., as depositary, for the issuance of American Depositary Receipts or ADRs evidencing American
Depositary Shares or ADSs. Each of the ADSs will represent 20 of our common shares or evidence of the right to receive 20 of our common
shares.
On September 12, 2008, we submitted to the
SEC an application to register our company and to register and list our ADSs evidenced by ADRs on the New York Stock Exchange or NYSE.
Our ADSs began trading on the NYSE under the symbol “EC” on September 18, 2008.
Common Shares
In August 2007, we conducted an initial
public offering of 10.1% of our common shares in Colombia. As a result of such offering, our common shares trade on the BVC under the
symbol ECOPETROL.
The second round of the equity offering program
took place between July 27 and August 17, 2011. The offer was directed exclusively to investors in Colombia as permitted by
Law 1118 of 2006. A total of 644,185,868 shares were allotted, equivalent to approximately COP$2.38 trillion. Out of the 219,054 investors
participating in this round, 73% were new stockholders. In addition, 87% of the offering was allocated to retail investors and the remaining
13% to institutional investors. Funds obtained by us from this offering were used in the company’s investment plan.
In the case of a future primary equity offering,
we will review whether or not existing shareholders would be entitled to preemptive or similar rights and, if that were the case, the
corporate approvals and offering documents for any such primary equity offering would regulate the subject matter accordingly. Additionally,
by virtue of Law 1118 of 2006, in the context of any such primary equity offering, the following limits apply to current and future registered
holders of our common shares: (i) individuals (natural persons), may only acquire shares up to the equivalent to 5,000 monthly minimum
wages in Colombia as such limit is in force on the date of any such offering (for 2021, the monthly minimum wage is COP$908,526) and
(ii) pension and severance funds, mutual investment funds and our pension trusts, in the aggregate, may not acquire more than 15%
of our outstanding common shares.
In the future, the Nation–Ministry of Finance
and Public Credit, as our controlling shareholder, may make decisions or announcements about its intention to sell part of its holding
of our capital stock up to the percentage permitted by Law 1118 of 2006. We understand that our cooperation is necessary for the successful
coordination of the Nation’s process.
Price Information
Information regarding the high and low closing
prices for our shares on the BVC and our ADRs on the NYSE for any relevant periods will be provided in supplements to this prospectus
or other offering materials relating to an offering of our securities.
Plan of Distribution
We may sell the securities covered by this prospectus
in any of the following three ways (or in any combination):
| · | through underwriters, dealers or
remarketing firms; |
| · | directly to one or more purchasers,
including to a limited number of institutional purchasers; or |
Any such dealer or agent, in addition to any
underwriter, may be deemed to be an underwriter within the meaning of the Securities Act. Any discounts or commissions received by an
underwriter, dealer, remarketing firm or agent on the sale or resale of securities may be considered by the SEC to be underwriting discounts
and commissions under the Securities Act.
In addition, we may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable
prospectus supplement indicates, in connection with such a transaction, the third parties may, pursuant to this prospectus and the applicable
prospectus supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so, the third party may
use securities borrowed from us or others to settle such sales and may use securities received from us to close out any related short
positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement to third parties,
who may sell the loaned securities or, in an Event of Default in the case of a pledge, sell the pledged securities pursuant to this prospectus
and the applicable prospectus supplement.
The terms of the offering of the securities with
respect to which this prospectus is being delivered will be set forth in the applicable prospectus supplement or other offering materials
and will include, among other things:
| · | the type of and terms of the securities
offered; |
| · | the price of the securities; |
| · | the proceeds to us from the sale
of the securities; |
| · | the names of the securities exchanges,
if any, on which the securities are listed; |
| · | the name of any underwriters, dealers,
remarketing firms or agents and the amount of securities underwritten or purchased by each
of them; |
| · | any over-allotment options under
which underwriters may purchase additional securities from us; |
| · | any underwriting discounts, agency
fees or other compensation to underwriters or agents; and |
| · | any discounts or concessions which
may be allowed or reallowed or paid to dealers. |
If underwriters are used in the sale of securities,
such securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The securities
may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by one or more underwriters
acting alone. Unless otherwise set forth in the applicable prospectus supplement, the obligations of the underwriters to purchase the
securities described in the applicable prospectus supplement will be subject to certain conditions precedent, and the underwriters will
be obligated to purchase all such securities if any are purchased by them. Any public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If dealers acting as principals are used in the
sale of any securities, such securities will be acquired by the dealers, as principals, and may be resold from time to time in one or
more transactions at varying prices to be determined by the dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the applicable prospectus supplement or other offering materials with respect to the securities being
offered.
Securities may also be offered and sold, if so
indicated in the applicable prospectus supplement or other offering materials, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more firms, which we refer to herein as
the “remarketing firms”, acting as principals for their own accounts or as our agents, as applicable. Any remarketing firm
will be identified and the terms of its agreement, if any, with us and its compensation will be described in the applicable prospectus
supplement or other offering materials. Remarketing firms may be deemed to be underwriters, as that term is defined in the Securities
Act in connection with the securities remarketed thereby.
The securities may be sold directly by us or
through agents designated by us from time to time. In the case of securities sold directly by us, no underwriters or agents would be
involved. Any agents involved in the offer or sale of the securities in respect of which this prospectus is being delivered, and any
commissions payable by us to such agents, will be set forth in the applicable prospectus supplement or other offering materials. Unless
otherwise indicated in the applicable prospectus supplement or other offering materials, any such agent will be acting on a best efforts
basis for the period of its appointment.
We may authorize agents, underwriters or dealers
to solicit offers by certain specified institutions to purchase the securities to which this prospectus and the applicable prospectus
supplement relates from us at the public offering price set forth in the applicable prospectus supplement or other offering materials,
plus, if applicable, accrued interest, pursuant to delayed delivery contracts providing for payment and delivery on a specified date
in the future. Such contracts will be subject only to those conditions set forth in the applicable prospectus supplement or other offering
materials, and the applicable prospectus supplement or other offering materials will set forth the commission payable for solicitation
of such contracts.
Agents, dealers, underwriters and remarketing
firms may be entitled, under agreements entered into with us to indemnification by us against certain civil liabilities, including liabilities
under the Securities Act, or to contribution to payments they may be required to make in respect thereof. Agents, dealers, underwriters
and remarketing firms may be customers of, engage in transactions with, or perform services for us or our subsidiaries in the ordinary
course of business.
Unless otherwise indicated in the applicable
prospectus supplement or other offering materials, all securities offered by this prospectus, other than our common stock that is listed
on the BVC and the New York Stock Exchange, will be new issues with no established trading market. We may elect to list any of the securities
on one or more exchanges, but, unless otherwise specified in the applicable prospectus supplement or other offering materials, we shall
not be obligated to do so. In addition, underwriters will not be obligated to make a market in any securities. No assurance can be given
regarding the activity of trading in, or liquidity of, any securities.
Any underwriter may engage in over-allotment,
stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment
involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities
in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions.
Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue
any of the activities at any time.
Markets
Information concerning the markets on which the
securities which may be offered pursuant to this prospectus are traded is incorporated by reference to the 2020 Annual Report.
Selling Shareholders
Any relevant information concerning selling shareholders
in conjunction with an offering of our securities pursuant to this prospectus will be provided in supplements to this prospectus or other
offering materials related thereto.
Dilution
Any relevant information any relevant dilution
of our shares as a result of an offering of our securities pursuant to this prospectus will be provided in supplements to this prospectus
or other offering materials related thereto.
Expenses of the Issue
The estimated aggregate amount of expenses payable
by us in connection with any offering of our securities pursuant to this prospectus will be provided in supplements to this prospectus
or other offering materials related thereto.
ADDITIONAL INFORMATION
Share Capital
At March 31, 2021, Ecopetrol’s authorized
capital amounted to COP$36,540,000,000,000 comprised of 60,000,000,000 ordinary shares each with a par value of COP$609.
At such date, 41,116,694,690 of such shares had
been subscribed with 11.51% (4,731,906,273 shares) held by natural and non-government entities and 88.49% (36,384,788,417 shares) held
by Government entities. The value of such subscribed and paid-in capital at such date amounted to COP$25,040,067,066,330. There are no
potentially dilutive instruments.
At such date, 18,883,305,310 of such shares remained
unsubscribed. The value of such unsubscribed capital at such date amounted to COP$11,499,932,933,670. Under Colombian law, a company
may keep authorized amounts of shares in reserve to facilitate future issuances and avoid an additional authorization of the general
shareholders’ meeting.
Memorandum and Articles of Association
A translation of our amended and restated by-laws
is included as Exhibit 1.1 to our 2020 Annual Report furnished to the SEC on April 9, 2021.
Material Contracts
A summary of our material contracts is incorporated
by reference to the 2020 Annual Report.
Exchange Controls
Information on Colombian exchange controls is
incorporated by reference to the 2020 Annual Report. In addition, further information on Colombian exchange controls relating to the
purchase, ownership and disposition of any of the securities offered pursuant to this prospectus will be set forth in the prospectus
supplement offering such securities.
Taxation
The material Colombian and U.S. federal income
tax consequences relating to the purchase, ownership and disposition of any of the securities offered pursuant to this prospectus will
be set forth in the prospectus supplement offering such securities.
Dividends and Paying Agents
All our common shares rank pari passu in right
of payment of dividends and distributions upon liquidation. According to Colombian law and our by-laws, the ordinary shareholders’
meeting determines the allocation of distributable profits as dividends for the preceding fiscal year. The ordinary shareholders’
meeting must be held within three months following the end of the fiscal year.
Once profits are declared, we are obliged under
Colombian law to subtract the following amounts before declaring dividends:
| · | first, an appropriation is made for
the payment of income tax for the corresponding fiscal year; |
| · | second, an amount equivalent to 10%
of net profits is set aside to build up the legal reserve until that reserve is equal to
at least 50% of the outstanding capital; |
| · | third, in case there were losses
in prior years, the balance is used to offset such losses; and |
| · | fourth, the remaining amount will
serve as the base for the dividends that are to be distributed and paid. |
Pursuant to Colombian law, the vote of at least
78% of the shares represented entitled to vote is required to approve the distribution of less than 50% of the annual net profits. If
the sum of all legal reserves (statutory, legal and optional) exceeds the amount of the outstanding capital, the Company must distribute
at least 70% of the annual net profits.
Colombian law provides that any dividend payable
in stock requires the approval of at least 80% of the shares present at a shareholders’ meeting. If such majority is not obtained,
shares may be distributed as dividends to the shareholders accepting stock dividends payment. However, we, as a company whose controlling
shareholder is the Nation–Ministry of Finance and Public Credit, would only pay dividends in stock to the shareholders that accept
such in kind payment, pursuant to local regulations.
To the extent that we declare and pay dividends,
owners of ADSs on the relevant record date will be entitled to receive dividends payable in respect of shares underlying the ADSs, subject
to the terms of the relevant deposit agreement. Cash dividends may be paid to the depositary in Colombian pesos and, except as otherwise
described under “Description of Securities—Description of Ordinary Shares”, are converted into U.S. dollars by the
depositary.
Pursuant to Colombian law, our ex-dividend date
is ten business days prior to the payment date. Our dividend paying agent is DECEVAL (the registrar for the BVC).
The following table sets forth the dividends
per share declared by our Board of Directors and paid, or to be paid, in Colombian pesos for the three months ended March 31, 2021
and for the years ended December 31, 2020, 2019, 2018, 2017 and 2016. As additional information for the reader, we present these
values in U.S. dollars.
Fiscal Year | |
Month and Year of Payment | |
Dividend Recipients | |
Total Dividend per Share (in COP$) | | |
Total Dividend per Share (in US$)(2) | |
2021(1) | |
NA | |
NA | |
| 0 | | |
| 0 | |
2020 | |
April 2021(3) | |
Minority Shareholders | |
| 17.00 | | |
| 0.005 | |
| |
April 2021(3) | |
Nation | |
| 17.00 | | |
| 0.005 | |
2019 | |
April 2020(4) | |
Minority Shareholders | |
| 180.00 | | |
| 0.045 | |
| |
April 2020(5) | |
Nation | |
| 8.25 | | |
| 0.002 | |
| |
May 2020(5) | |
Nation | |
| 8.25 | | |
| 0.002 | |
| |
June 2020(5) | |
Nation | |
| 8.25 | | |
| 0.002 | |
| |
August 2020(5) | |
Nation | |
| 33.70 | | |
| 0.009 | |
| |
September 2020(5) | |
Nation | |
| 32.24 | | |
| 0.008 | |
| |
October 2020(5) | |
Nation | |
| 31.51 | | |
| 0.008 | |
| |
November 2020(5) | |
Nation | |
| 31.51 | | |
| 0.009 | |
| |
December 2020(5) | |
Nation | |
| 26.31 | | |
| 0.008 | |
| |
December 2020(6) | |
Nation | |
| 89.00 | | |
| 0.027 | |
| |
December 2020(6) | |
Minority Shareholders | |
| 89.00 | | |
| 0.027 | |
2018 | |
April 2019(7) | |
Minority Shareholders | |
| 314.00 | | |
| 0.098 | |
| |
April 2019(8) | |
Nation | |
| 104.67 | | |
| 0.033 | |
| |
June 2019(8) | |
Nation | |
| 104.67 | | |
| 0.033 | |
| |
September 2019(8) | |
Nation | |
| 104.66 | | |
| 0.030 | |
2017 | |
April 2018(9) | |
Minority Shareholders | |
| 89.00 | | |
| 0.032 | |
| |
April 2018(10) | |
Nation | |
| 44.50 | | |
| 0.016 | |
| |
September 2018(10) | |
Nation | |
| 44.50 | | |
| 0.016 | |
2016 | |
April 2017(11) | |
Minority Shareholders | |
| 23.00 | | |
| 0.008 | |
| |
April 2017(11) | |
Nation | |
| 23.00 | | |
| 0.008 | |
| (1) | For the three months ended March 31, 2021. |
| (2) | Amounts in U.S. dollars have been translated at the Representative Market
Rate for the last business day of the month in which dividends were paid as calculated and
certified by the Superintendency of Finance. These amounts are only presented for information.
Dividends are paid in Colombian pesos. |
| (3) | Total Dividend per Share declared for the year 2020 that corresponds
to the National Government and the minority shareholders and which was paid in its entirety
on April 22, 2021. |
| (4) | Total Dividend per Share declared for the year 2019 that corresponds
to the minority shareholders and which was paid in its entirety on April 23, 2020. |
| (5) | Total Dividend per Share declared for the year 2019 that corresponds
to the National Government and which was paid in eight installments, the first was paid on
April 23, 2020, the second was paid on May 15, 2020, the third was paid on June 16,
2020, the fourth was paid on August 20, 2020, the fifth was paid on September 23,
2020, the sixth was paid on October 23, 2020, the seventh was paid on November 23,
2020 and the eight was paid on December 15, 2020. |
| (6) | Extraordinary Dividend per Share declared for the year 2019 that corresponds
to the minority shareholders paid in its entirety on December 23, 2019 and to the National
Government paid in one installment on December 26, 2019. |
| (7) | Total Dividend per Share declared for the year 2018 that corresponds
to the minority shareholders and which was paid in its entirety on April 25, 2019. |
| (8) | Total Dividend per Share declared for the year 2018 that corresponds
to the National Government and which was paid in three installments, the first was paid on
April 25, 2019, the second was paid on June 25, 2019 and the third was paid on
September 25, 2019. |
| (9) | Total Dividend per Share declared for the year 2017 that corresponds
to the minority shareholders and which was paid in its entirety on April 19, 2018. |
| (10) | Total Dividend per Share declared for the year 2017 that corresponds
to the National Government and which was paid in two installments, the first was paid on
April 19, 2018 and the second was paid on September 17, 2018. |
| (11) | Total Dividend per Share declared for the year 2016 that corresponds
to the National Government and the minority shareholders and which was paid in its entirety
on April 28, 2017. |
DESCRIPTION OF THE SECURITIES
Description of the Ordinary Shares evidenced by American Depositary
Shares
JPMorgan Chase Bank, N.A., pursuant to the amended
and restated deposit agreement, dated January 12, 2018, as depositary (the “Depositary”) will issue the ADSs. Each ADS
will represent an ownership interest in 20 shares which will be deposited with the custodian, as agent of the Depositary, under the deposit
agreement among ourselves, the Depositary and yourself as an ADR holder. In the future, each ADS will also represent any securities,
cash or other property deposited with the Depositary but which they have not distributed directly to you. Unless specifically requested
by persons depositing shares, all ADSs will be issued on the books of our Depositary in book-entry form and periodic statements will
be mailed to you which reflect your ownership interest in such ADSs. In our description, references to ADRs shall include the statements
you will receive which reflects your ownership of ADSs.
The Depositary’s office is located at 4
New York Plaza, 12th Floor, New York, NY 10004.
You may hold ADSs either directly or indirectly
through your broker or other financial institution. If you hold ADSs directly, by having an ADS registered in your name on the books
of the Depositary, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs through your broker
or financial institution nominee, you must rely on the procedures of such broker or financial institution to assert the rights of an
ADR holder described in this section. You should consult with your broker or financial institution to find out what those procedures
are.
As an ADR holder, we will not treat you as a
shareholder of ours and you will not have any shareholder rights. Colombian law governs shareholder rights. Because the Depositary or
its nominee will be the shareholder of record for the shares represented by all outstanding ADSs, shareholder rights rest with such record
holder. Your rights are those of an ADR holder. Such rights derive from the terms of the deposit agreement to be entered into among us,
the Depositary and all registered holders from time to time of ADSs issued under the deposit agreement. The obligations of the Depositary
and its agents are also set out in the deposit agreement. Because the Depositary or its nominee will actually be the registered owner
of the shares, you must rely on it to exercise the rights of a shareholder on your behalf. The deposit agreement and the ADSs are governed
by New York law.
The following is a summary of the material terms
of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you. For more complete
information, you should read the entire deposit agreement and the form of ADR which contains the terms of your ADSs. You can read a copy
of the deposit agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part. See “Where
You Can Find More Information” for information on how to obtain a copy.
Share Dividends and Other Distributions
How will I receive dividends and other distributions on the shares
underlying my ADSs?
We may make various types of distributions with
respect to our securities. The Depositary has agreed to pay to you the cash dividends or other distributions it or the custodian receives
on shares or other deposited securities, after converting any cash received into U.S. dollars and, in all cases, making any necessary
deductions provided for in the deposit agreement. You will receive these distributions in proportion to the number of underlying securities
that your ADSs represent.
Except as stated below, to the extent the Depositary
is legally permitted, it will deliver such distributions to ADR holders in proportion to their interests in the following manner:
| · | Cash. Subject to and any restrictions
imposed by the laws of Colombia, regulations or applicable permits issued by any governmental
body, the Depositary will distribute any U.S. dollars available to it resulting from a cash
dividend or other cash distribution or the net proceeds of sales of any other distribution
or portion thereof (to the extent applicable), on an averaged or other practicable basis,
subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution
being impermissible or impracticable with respect to certain registered ADR holders, and
(iii) deduction of the Depositary’s expenses in (1) converting any foreign
currency to U.S. dollars to the extent that it determines that such conversion may be made
on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United
States by such means as the Depositary may determine to the extent that it determines that
such transfer may be made on a reasonable basis, (3) obtaining any approval or license
of any governmental authority required for such conversion or transfer, which is obtainable
at a reasonable cost and within a reasonable time and (4) making any sale by public
or private means in any commercially reasonable manner. If exchange rates fluctuate during
a time when the Depositary cannot convert a foreign currency, you may lose some or all of
the value of the distribution. |
| · | Shares. In the case of a distribution
in shares, the Depositary will issue additional ADRs to evidence the number of ADSs representing
such shares. Only whole ADSs will be issued. Any shares which would result in fractional
ADSs will be sold and the net proceeds will be distributed in the same manner as cash to
the ADR holders entitled thereto. |
| · | Rights to receive additional shares.
In the case of a distribution of rights to subscribe for additional shares or other rights,
if we provide satisfactory evidence that the Depositary may lawfully distribute such rights,
the Depositary will distribute warrants or other instruments representing such rights. However,
if we do not furnish such evidence, the Depositary may: |
| o | sell
such rights if practicable and distribute the net proceeds as cash; or |
| o | if
it is not practicable to sell such rights, do nothing and allow such rights to lapse, in
which case ADR holders will receive nothing. |
We have no obligation to file a registration
statement under the Securities Act in order to make any rights available to ADR holders:
| · | Other Distributions. In the
case of a distribution of securities or property other than those described above, the Depositary
may either (i) distribute such securities or property in any manner it deems equitable
and practicable or (ii) to the extent the Depositary deems distribution of such securities
or property not to be equitable and practicable, sell such securities or property and distribute
any net proceeds in the same way it distributes cash. |
If the Depositary determines that any distribution
described above is not practicable with respect to any specific ADR holder, the Depositary may choose any practicable method of distribution
for such ADR holder, including the distribution of foreign currency, securities or property, or it may retain such items, without paying
interest on or investing them, on behalf of the ADR holder as deposited securities, in which case the ADSs will also represent the retained
items.
Any U.S. dollar will be distributed by checks
drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with
by the Depositary in accordance with its then current practices.
The Depositary is not responsible if it decides
that it is unlawful or impractical to make a distribution available to any ADR holders.
There can be no assurance that the Depositary
will be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified
price, nor that any of such transactions can be completed within a specified time period.
The Depositary reserves the right to utilize
a division, branch or affiliate to direct, manage and/or execute any public and/or private sale of securities described above.
Deposit, Withdrawal and Cancellation
How does the Depositary issue ADSs?
The Depositary will issue ADSs if you or your
broker deposits shares or evidence of rights to receive shares with the custodian and pay the fees and expenses owing to the Depositary
in connection with such issuance.
Shares deposited with the custodian must be accompanied
by certain delivery documentation, including instruments showing that such shares have been properly transferred or endorsed to the person
on whose behalf the deposit is being made.
The custodian will hold all deposited shares
for the account of the Depositary. ADR holders thus have no direct ownership interest in the shares and only have such rights as are
contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or in substitution
for the deposited shares. The deposited shares and any such additional items are referred to as “deposited securities”.
Upon each deposit of shares, receipt of related
delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the fees and charges
of the Depositary and any taxes or other fees or charges owing, the Depositary will issue an ADR or ADRs in the name or upon the order
of the person entitled thereto evidencing the number of ADSs to which such person is entitled. All of the ADSs issued will, unless specifically
requested to the contrary, be part of the Depositary’s direct registration system, and a registered holder will receive periodic
statements from the Depositary which will show the number of ADSs registered in such holder’s name. An ADR holder can request that
the ADSs not be held through the Depositary’s direct registration system and that a certificated ADR be issued.
How do ADR holders cancel an ADS and obtain deposited securities?
When you turn in your ADSs at the Depositary’s
office, or when you provide proper instructions and documentation in the case of direct registration ADSs, the Depositary will, upon
payment of certain applicable fees, charges and taxes, deliver the underlying shares at the custodian’s office or effect delivery
by such other means as the Depositary deems practicable, including transfer to an account of an accredited financial institution on your
behalf. At your risk, expense and request, the Depositary may deliver deposited securities at such other place as you may request.
The Depositary may only restrict the withdrawal
of deposited securities in connection with:
| · | temporary delays caused by closing
our transfer books or those of the Depositary or the deposit of shares in connection with
voting at a shareholders’ meeting, or the payment of dividends; |
| · | the payment of fees, taxes and similar
charges; or |
| · | compliance with any U.S. or foreign
laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities. |
This right of withdrawal may not be limited by
any other provision of the deposit agreement. Notwithstanding anything to the contrary in the deposit agreement, holders of ADSs who
are non-residents of Colombia, who withdraw deposited securities to or for their own account or the account of a non-resident third party
whether or not with the purpose of selling or causing to be sold such deposited securities in Colombia simultaneously with such withdrawal,
will be subject to applicable Colombian rules and regulations, including without limitation Colombia’s International Investment
Statute as well as any taxes applicable thereby, as in effect from time to time.
Neither we nor the Depositary or the custodian
shall have any liability or responsibility whatsoever under the deposit agreement or otherwise for any action or failure to act by any
Holder relating to its obligations under Colombian tax law or any other Colombian law or regulation relating to foreign investment in
Colombia in respect of a withdrawal or sale of deposited securities, including, without limitation, any failure by any holder to comply
with a requirement to register such investment prior to such withdrawal, or any failure by any holder to report foreign exchange transactions
to the Colombian Central Bank, as the case may be.
Record Dates
The Depositary may fix record dates for the determination
of the ADR holders who will be entitled (or obligated, as the case may be):
| · | to receive any distribution on or
in respect of shares; |
| · | to give instructions for the exercise
of voting rights at a meeting of holders of shares; |
| · | for the determination of the registered
holders who shall be responsible for the fee assessed by the Depositary for administration
of the ADR program and for any expenses as provided for in the ADR; or |
| · | to receive any notice or to act in
respect of other matters. |
All the above are subject to the provisions of the deposit agreement.
Voting Rights
How do I vote?
If you are an ADR holder and the Depositary asks
you to provide it with voting instructions, you may instruct the Depositary how to exercise the voting rights for the shares which underlie
your ADSs. After receiving voting materials from us, the Depositary will notify the ADR holders of any shareholders’ meeting or
solicitation of consents or proxies. This notice will state such information as is contained in the voting materials and describe how
you may instruct the Depositary to exercise the voting rights for the shares which underlie your ADSs and will include instructions for
giving a discretionary proxy to a person designated by us. For instructions to be valid, the Depositary must receive them in the manner
and on or before the date specified. The Depositary will try, as far as is practical, subject to the provisions of and governing the
underlying shares or other deposited securities, to vote or to have its agents vote the shares or other deposited securities as you instruct.
The Depositary will only vote or attempt to vote as you instruct. The Depositary will not itself exercise any voting discretion. Furthermore,
neither the Depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any
vote is cast or for the effect of any vote.
There is no guarantee that you will receive voting
materials in time to instruct the Depositary to vote and it is possible that you, or persons who hold their ADSs through brokers, dealers
or other third parties, will not have the opportunity to exercise a right to vote. The holders will be solely responsible for any exercise
of the voting rights of the deposited shares represented by the deposited securities by the ADSs, if such vote is made pursuant to the
procedure described in the deposit agreement.
ADR holders should be aware that in Colombia,
it is uncertain whether a depositary must vote all common shares of a Colombian corporation in an ADR, program in the same manner as
a single block or may vote them separately. Accordingly, if either the custodian or the Depositary are not able to vote the common shares
(including the right to receive common shares in the form of ADRs) deposited under the Deposit Agreement and any other securities, cash
or property from time to time held by the Depositary in respect or in lieu of deposited common shares (the “Deposited Securities”)
separately, all such Deposited Securities shall be voted based on the majority vote of the voting instructions timely received from holders
of ADRs. In the case of such single block voting, all holders of ADRs, including holders of ADRs for which no voting instructions are
timely received and holders of ADRs with voting instructions contrary to the voting instructions of a majority of the Deposited Securities
timely received, should be aware that the Deposited Securities shall all be voted as a single block and that the voting instructions
of such holders of ADRs will be deemed given in the manner stated above.
Reports and Other Communications
Will I be able to view our reports?
The Depositary will make available for inspection
by ADR holders any written communications from us which are both received by the custodian or its nominee as a holder of deposited securities
and made generally available to the holders of deposited securities. We will furnish these communications in English when so required
by any rules or regulations of the SEC.
Additionally, if we make any written communications
generally available to holders of our shares, including the Depositary or the custodian, and we request the Depositary to provide them
to ADR holders, the Depositary will mail copies of them, or, at its option, English translations or summaries of them to ADR holders.
Fees and Expenses
What fees and expenses will I be responsible for paying?
The Depositary may charge each person to whom
ADSs are issued, including, without limitation, issuances against deposits of shares, issuances in respect of share distributions, rights
and other distributions, issuances pursuant to a stock dividend or stock split declared by us or issuances pursuant to a merger, exchange
of securities or any other transaction or event affecting the ADSs or deposited securities, and each person surrendering ADSs for withdrawal
of deposited securities in any manner permitted by the deposit agreement or whose ADRs are cancelled or reduced for any other reason,
US$5.00 for each 100 ADSs (or any portion thereof) issued, delivered, reduced, cancelled or surrendered, the case may be. The Depositary
may sell (by public or private sale) sufficient securities and property received in respect of a share distribution, rights and/or other
distribution prior to such deposit to pay such charge.
The Depositary collects its fees for issuance
and cancellation of ADSs directly from investors depositing common shares or surrendering ADSs for the purpose of withdrawal or from
intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts
distributed or by selling a portion of distributable property to pay the fees. The Depositary may collect its annual fee for Depositary
services by deduction from cash distributions, or by directly billing investors, or by charging the book-entry system accounts of participants
acting for them. The Depositary may generally refuse to provide services to any holder until the fees and expenses owing by such holder
for those services or otherwise are paid.
The following additional charges may be incurred
by the ADR holders, by any party depositing or withdrawing common shares or by any party surrendering ADSs and/or to whom ADSs are issued
(including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock
regarding the ADRs or the deposited securities or a distribution of ADSs), whichever is applicable:
| · | a fee of up to US$0.05 or less per
ADS for any cash distribution made pursuant to the deposit agreement; |
| · | a fee for the distribution of securities
(or the sale of securities in connection with a distribution), such fee being in an amount
equal to the fee for the execution and delivery of ADSs which would have been charged as
a result of the deposit of such securities (treating all such securities as if they were
common shares) but which securities or the net cash proceeds from the sale thereof are instead
distributed by the Depositary to those holders of ADRs entitled thereto; |
| · | an aggregate fee of up to US$0.05
per ADS per calendar year (or portion thereof) for services performed by the Depositary in
administering the ADRs (which fee may be charged on a periodic basis during each calendar
year and shall be assessed against holders of ADRs as of the record date or record dates
set by the Depositary during each calendar year and shall be payable in the manner described
in the next succeeding provision); |
| · | a fee for the reimbursement of such
fees, charges and expenses as are incurred by the Depositary and/or any of the Depositary’s
agents (including, without limitation, the custodian and expenses incurred on behalf of holders
of ADRs in connection with compliance with foreign exchange control regulations or any law
or regulation relating to foreign investment) in connection with the servicing of our common
shares or other deposited securities, the sale of securities (including, without limitation,
Deposited Securities) and the delivery of deposited securities or otherwise in connection
with the Depositary’s or its custodian’s compliance with applicable law, rule or
regulation (which fees and charges shall be assessed on a proportionate basis against registered
holders of ADRs as of the record date or dates set by the Depositary and shall be payable
at the sole discretion of the Depositary by billing such holders of ADRs or by deducting
such charge from one or more cash dividends or other cash distributions); |
| · | stock transfer or other taxes and
other governmental charges; |
| · | SWIFT, cable, telex and facsimile
transmission and delivery charges incurred at the request of a holder of ADRs; |
| · | transfer or registration fees for
the registration of transfer of deposited securities on any applicable register in connection
with the deposit or withdrawal of deposited securities; and |
| · | in connection with the conversion
of foreign currency into U.S. dollars, the Depositary shall deduct out of such foreign currency
the fees, expenses and other charges charged by it or the Depositary’s agent (which
may be a division, branch or affiliate) so appointed in connection with such conversion.
The Depositary and/or the Depositary’s agent may act as principal for such conversion
of foreign currency. Such charges may at any time and from time to time be changed by agreement
between us and the Depositary. |
We will pay all other charges and expenses of
the Depositary and any agent of the Depositary (except the custodian) pursuant to agreements from time to time between us and the Depositary.
The fees described above may be amended from time to time.
Our Depositary has agreed to reimburse us for
certain expenses we incur that are related to establishment and maintenance of the ADR program, including investor relations expenses
and exchange application and listing fees upon such terms and conditions as the Company and the Depositary may agree from time to time.
Neither the Depositary nor we can determine the exact amount to be made available to us because (i) the number of ADSs that will
be issued and outstanding, (ii) the level of fees to be charged to holders of ADSs and (iii) our reimbursable expenses related
to the ADR program are not known at this time. The Depositary collects its fees for issuance and cancellation of ADSs directly from investors
depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects
fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable
property to pay the fees. The Depositary may collect its annual fee for Depositary services by deduction from cash distributions, or
by directly billing investors, or by charging the book-entry system accounts of participants acting for them. The Depositary may generally
refuse to provide services to any holder until the fees and expenses owing by such holder for those services or otherwise are paid.
Payment of Taxes
ADR holders must pay any tax or other governmental
charge payable by the custodian or the Depositary on any ADS or ADR, deposited security or distribution. If an ADR holder owes any tax
or other governmental charge, the Depositary may (i) deduct the amount thereof from any cash distributions, or (ii) sell deposited
securities and deduct the amount owing from the net proceeds of such sale. In either case, the ADR holder remains liable for any shortfall.
Additionally, if any tax or governmental charge is unpaid, the Depositary may also refuse to effect any registration, registration of
transfer, split-up or combination of deposited securities or withdrawal of deposited securities (except under limited circumstances mandated
by securities regulations). If any tax or governmental charge is required to be withheld on any non-cash distribution, the Depositary
may sell the distributed property or securities to pay such taxes and distribute any remaining net proceeds to the ADR holders entitled
thereto.
By holding an ADR or an interest therein, you
will be agreeing to indemnify us, the Depositary, its custodian and any of our or their respective Directors, employees, agents and affiliates
against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties
or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained in respect of, or
arising out of, your ADSs.
Reclassifications, Recapitalizations and Mergers
If we take certain actions that affect the deposited
securities, including (i) any change in par value, split-up, consolidation, cancellation or other reclassification of deposited
securities or (ii) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of
all or substantially all of our assets, then the Depositary may choose to:
| · | distribute additional or amended
ADRs; |
| · | distribute cash, securities or other
property it has received in connection with such actions; |
| · | sell any securities or property received
and distribute the proceeds as cash; or |
| · | not perform any of the above. |
If the Depositary does not choose any of the
above options, any of the cash, securities or other property it receives will constitute part of the deposited securities and each ADS
will then represent a proportionate interest in such property.
Amendment and Termination
How may the deposit agreement be amended?
We may agree with the Depositary to amend the
deposit agreement and the ADSs without your consent for any reason. ADR holders must be given at least 30 days notice of any amendment
that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration
fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or otherwise prejudices any substantial existing
right of ADR holders. If an ADR holder continues to hold an ADR or ADRs after being so notified, such ADR holder is deemed to agree to
such amendment. Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws, rules or regulations
which would require amendment or supplement of the deposit agreement or the form of ADR to ensure compliance therewith, we and the Depositary
may amend or supplement the deposit agreement and the ADR at any time in accordance with such changed laws, rules or regulations,
which amendment or supplement may take effect before a notice is given or you otherwise receive notice. No amendment, however, will impair
your right to surrender your ADSs and receive the underlying securities, except in order to comply with mandatory provisions of applicable
law. Notice of any amendment to the deposit agreement or form of ADRs does not need to describe in detail the specific amendments effectuated
thereby, and failure to describe the specific amendments in any such notice will not render such notice invalid, provided, however, that,
in each such case, the notice given to you identifies a means for you to retrieve or receive the text of such amendment.
How may the deposit agreement be terminated?
The Depositary may, and shall at our written
direction, terminate the deposit agreement and the ADR by mailing notice of such termination to the registered holders of ADRs at least
30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i) resigned
as Depositary under the deposit agreement, notice of such termination by the Depositary shall not be provided to registered holders unless
a successor Depositary shall not be operating under the deposit agreement within 45 days of the date of such resignation, and (ii) been
removed as Depositary under the deposit agreement, notice of such termination by the Depositary shall not be provided to registered holders
of ADRs unless a successor Depositary shall not be operating under the deposit agreement on the 90th day after our notice of removal
was first provided to the Depositary. After termination, the Depositary’s only responsibility will be (i) to deliver deposited
securities to ADR holders who surrender their ADRs, and (ii) to hold or sell distributions received on deposited securities. As
soon as practicable after the termination date, the Depositary will use its reasonable efforts to sell the deposited securities which
remain and hold the net proceeds of such sales, without liability for interest, in trust for the ADR holders who have not yet surrendered
their ADRs. After making such sale, the Depositary shall have no obligations except to account for such proceeds and other cash. The
Depositary will not be required to invest such proceeds or pay interest on them.
Limitations on Obligations and Liability to ADR Holders
Limits on our obligations and the obligations of the Depositary;
limits on liability to ADR holders and holders of ADSs
Prior to the issue, registration, registration
of transfer, split-up, combination, or cancellation of any ADRs, or the delivery of any distribution in respect thereof, the Depositary
and its custodian may require you to pay, provide or deliver:
| · | payment with respect thereto of (i) any
stock transfer or other tax or other governmental charge, (ii) any stock transfer or
registration fees in effect for the registration of transfers of shares or other deposited
securities upon any applicable register and (iii) any applicable fees and expenses described
in the deposit agreement; |
| · | the production of proof satisfactory
to the Depositary and/or its custodian of (i) the identity of any signatory and genuineness
of any signature and (ii) such other information, including, without limitation, information
as to citizenship, residence, exchange control approval, beneficial or other ownership of,
or interest in, any securities, compliance with applicable law, regulations, provisions of
or governing shares and terms of the deposit agreement and the ADRs, as it may deem necessary
or proper; |
| · | compliance with such regulations
as the Depositary may establish consistent with the deposit agreement or any Colombian law
or regulation relating to Colombian taxes, foreign investment in Colombia and laws, rules and
regulations relating to the regulation of foreign exchange in Colombia. |
The issuance of ADRs, the acceptance of deposits
of shares, the registration, registration of transfer, split-up or combination of ADRs or the withdrawal of shares, generally or in particular
instances, when the ADR register or any register for shares is closed or when any such action is deemed advisable by the Depositary;
provided that the ability to withdraw shares may only be limited under the following circumstances: (i) temporary delays caused
by closing transfer books of the Depositary or our transfer books or the deposit of shares in connection with voting at a shareholders’
meeting, or the payment of dividends, (ii) the payment of fees, taxes, and similar charges, and (iii) compliance with any laws
or governmental regulations relating to ADRs or to the withdrawal of shares.
The deposit agreement expressly limits the obligations
and liability of the Depositary, ourselves and our respective directors, officers, employees, agents and affiliates. Neither we nor the
Depositary nor any such directors, officers, employees, agents and affiliates, will be liable if:
| · | present or future law, rule or
regulation of the United States, Colombia or any other country, or of any governmental or
regulatory authority or securities exchange or market or automated quotation system, the
provisions of or governing any deposited securities, any present or future provision of our
charter, any act of God, war, terrorism or other circumstance beyond our, the Depositary’s
or our respective agents’ control shall prevent, delay or subject to any civil or criminal
penalty any act which the deposit agreement or the ADRs provide shall be done or performed
by us, the Depositary or our respective agents (including, without limitation, voting); |
| · | it exercises or fails to exercise
discretion under the deposit agreement or the ADR; |
| · | it performs its obligations without
gross negligence or willful misconduct; |
| · | it takes any action or refrains from
taking any action in reliance upon the advice of or information from legal counsel, accountants,
any person presenting shares for deposit, any registered holder of ADRs, or any other person
believed by it to be competent to give such advice or information; or |
| · | it relies upon any written notice,
request, direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties. |
Neither the Depositary nor its agents have any
obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs.
We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited
securities or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory to us against all expense
(including fees and disbursements of counsel) and liability is furnished as often as may be required. The Depositary and its agents may
fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the deposit agreement,
any registered holder or holders of ADRs, any ADSs or otherwise to the extent such information is requested or required by or pursuant
to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities
or other regulators.
The Depositary is not liable for the acts or
omissions made by, or the insolvency of, any securities depository, clearing agency or settlement system. The Depositary is not responsible
for, and, will incur no liability in connection with or arising from, the insolvency of any custodian that is not a branch or affiliate.
The Depositary does not have any liability for the price received in connection with any sale of securities, the timing thereof or any
delay in action or omission to act nor shall it be responsible for any error or delay in action, omission to act, default or negligence
on the part of the party so retained in connection with any such sale or proposed sale. Subject to certain exception, the Depositary
will not incur liability in connection with or arising from, any act or omission to act on the part of the custodian except to the extent
that such custodian has (i) committed fraud or willful misconduct in the provision of custodial services to the Depositary or (ii) failed
to use reasonable care in the provision of custodial services to the Depositary as determined in accordance with the standards prevailing
in the jurisdiction in which the custodian is located.
Additionally, none of us, the Depositary or the
custodian shall be liable for the failure by any registered holder of ADRs or beneficial owner therein to obtain the benefits of credits
on the basis of non-U.S. tax paid against such holder’s or beneficial owner’s income tax liability. Neither we nor the Depositary
shall incur any liability for any tax consequences that may be incurred by holders or beneficial owners on account of their ownership
of ADRs or ADSs.
The Depositary will not be responsible for failing
to carry out instructions to vote the deposited securities or for the manner in which the deposited securities are voted or the effect
of the vote. In no event shall we, the Depositary or any of our respective agents be liable to holders of ADSs or interests therein for
any indirect, special, punitive or consequential damages or lost profits.
The Depositary may own and deal in deposited
securities and in ADSs.
Disclosure of Interest in ADSs
To the extent that the provisions of or governing
any deposited securities may require disclosure of or impose limits on beneficial or other ownership of deposited securities, other shares
and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, you agree to
comply with all such disclosure requirements and ownership limitations and to comply with any reasonable instructions we may provide
in respect thereof.
Books of Depositary
The Depositary or its agent will maintain a register
for the registration, registration of transfer, combination and split-up of ADRs, which register shall include the Depositary’s
direct registration system. You may inspect such records at such office during regular business hours, but solely for the purpose of
communicating with other holders in the interest of business matters relating to the deposit agreement. Such register may be closed from
time to time, when deemed expedient by the Depositary or when requested by us.
The Depositary will maintain facilities to record
and process the issuance, cancellation, combination, split-up and transfer of ADRs. These facilities may be closed from time to time,
to the extent not prohibited by law.
Appointment
In the deposit agreement, each holder and each
person holding an interest in ADSs, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions
of the deposit agreement will be deemed for all purposes to:
| · | be a party to and bound by the terms
of the deposit agreement and the applicable ADR or ADRs; and |
| · | appoint the Depositary its attorney-in-fact,
with full power to delegate, to act on its behalf and to take any and all actions contemplated
in the deposit agreement and the applicable ADR or ADRs, to adopt any and all procedures
necessary to comply with applicable laws and to take such action as the Depositary in its
sole discretion may deem necessary or appropriate to carry out the purposes of the deposit
agreement and the applicable ADR and ADRs, the taking of such actions to be the conclusive
determinant of the necessity and appropriateness thereof. |
Description of the Preferred Shares
We will set forth in the applicable prospectus
supplement or other offering materials a description of the preferred shares which may be offered under this prospectus.
Description of the Debt Securities
This is a summary of the material terms of the
debt securities which we may offer pursuant to this prospectus and the indenture dated July 23, 2009, as amended by Amendment No. 1
to the indenture, dated as of June 26, 2015, (collectively the “indenture”), among Ecopetrol and The Bank of New York
Mellon, as trustee. Because this is a summary, it does not contain the complete terms of the debt securities and the indenture, and may
not contain all the information that you should consider before investing in the debt securities. A copy of the indenture has been filed
as an exhibit to our registration statement on Form F-4 filed with the SEC on August 31, 2009. A copy of the form of Amendment
No. 1 to the indenture has been filed as an exhibit to our current report on Form 6-K filed with the SEC on June 24, 2015.
We urge you to closely examine and review the indenture itself. See “Where You Can Find More Information” for information
on how to obtain a copy. You may also inspect a copy of the indenture at the corporate trust office of the trustee, which is currently
located at 240 Greenwich Street, Floor 7 East, New York, NY.
The applicable prospectus supplement or other
offering materials may also add, update or change the description of the debt securities contained in this prospectus. You should carefully
read this prospectus, any prospectus supplement or other offering materials before you invest in any of our securities, including our
debt securities.
General
The indenture does not limit the aggregate principal
amount of senior notes which may be issued under the indenture and provides that Ecopetrol may issue senior notes from time to time in
one or more series. The senior notes which Ecopetrol may issue under the indenture are collectively referred to in this prospectus as
the “debt securities”.
The debt securities will be unsecured senior
obligations of Ecopetrol. Ecopetrol may “reopen” the note series and issue additional notes of the same series.
The debt securities will bear interest at the
rate per annum set forth in the applicable prospectus supplement from the date of original issuance of such debt securities. Interest
payable will be paid on the dates set forth in the applicable prospectus supplement, each such date being an “interest payment
date”, to the persons in whose names the debt securities are registered at the close of business on the fifteenth calendar day
preceding the interest payment date. Interest payable at maturity will be payable to the person to whom principal will be payable on
that date. The maturity date for the debt securities will be set forth in the applicable prospectus supplement. If any interest payment
date or maturity date would be otherwise a day that is not a business day, the related payment of principal and interest will be made
on the next succeeding business day as if it were made on the date the payment was due, and no interest will accrue on the amounts so
payable for the period from and after the interest payment date or the maturity date, as the case may be, to the next succeeding business
day. A “business day” means a day other than a Saturday, Sunday or other day on which banking institutions in New York, New
York are authorized or obligated by law, regulation or executive order to close.
In the case of amounts not paid by Ecopetrol
under the debt securities, interest will continue to accrue on such amounts, to the extent permitted by applicable law, at a default
rate equal to 1.0% in excess of the interest rate on the debt securities, from and including the date when such amounts were due and
owing and through and including the date of payment of such amounts by Ecopetrol.
The indenture does not contain any provision
that would limit the ability of Ecopetrol and its Subsidiaries to incur indebtedness or to substantially reduce or eliminate Ecopetrol’s
assets or that would afford the holders of the debt securities protection in the event of a decline in Ecopetrol’s credit quality
or a takeover, recapitalization or highly leveraged or similar transaction involving Ecopetrol. In addition, subject to the limitations
set forth under “—Merger and Consolidation”, Ecopetrol may, in the future, enter into certain transactions, including
the sale of all or substantially all of its assets or the merger or consolidation of Ecopetrol, that would increase the amount of Ecopetrol’s
indebtedness or substantially reduce or eliminate Ecopetrol’s assets, which may have an adverse effect on Ecopetrol’s ability
to service its indebtedness, including the debt securities.
Except as otherwise set forth in the applicable
prospectus supplement, each book-entry note will be represented by one or more global notes in fully registered form, registered in the
name of The Depositary Trust Company, which is referred to in this prospectus as “DTC” or the “depositary”, or
its nominee. Beneficial interests in the global notes will be shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. See “—Form, Denomination and Registration”. Except in the limited circumstances
described in this prospectus, book-entry notes will not be exchangeable for debt securities issued in fully registered form (“certificated
notes”).
Except as otherwise set forth in the applicable
prospectus supplement, in the event that, as a result of certain change in law affecting Colombian withholding taxes, Ecopetrol becomes
obliged to pay Additional Amounts (as defined below), the debt securities will be redeemable, as a whole but not in part, at Ecopetrol’s
option at any time at 100% of their principal amount plus accrued and unpaid interest, if any. See “—Withholding Tax Redemption”.
In addition, we will have the right at our option to redeem any of the debt securities in whole or in part at a redemption price set
forth below.
Except as otherwise set forth in the applicable
prospectus supplement, we are required to make an offer to purchase all or any portion of outstanding debt securities held by holders
upon the occurrence of a Change of Control Repurchase Event (as defined below) at a purchase price in cash equal to 101% of the principal
amount of the debt securities so purchased, plus accrued and unpaid interest thereon and any Additional Amounts to but excluding the
date of such purchase.
Book-entry notes may be transferred or exchanged
only through the depositary. See “—Form, Denomination and Registration”. Registration of transfer or exchange of certificated
notes will be made at the office or agency maintained by Ecopetrol for this purpose in the Borough of Manhattan, The City of New York,
currently the office of the trustee at 240 Greenwich Street, Floor 7 East, New York, NY. Neither Ecopetrol nor the trustee will charge
a service charge for any registration of transfer or exchange of debt securities, but Ecopetrol may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange (other than exchanges pursuant
to the indenture not involving any transfer).
Despite the Republic of Colombia’s ownership
interest in Ecopetrol, the Nation is not responsible for Ecopetrol’s obligations under the senior debt securities or the indenture.
Payments
Ecopetrol will make payments of principal, and
premium, if any, and interest on book-entry notes through the trustee to the depositary. See “—Form, Denomination and Registration”.
In the case of certificated notes (which will only be issued in the circumstances described below under “Form, Denomination and
Registration”), Ecopetrol will pay the principal and premium, if any, due on the maturity date in immediately available funds upon
presentation and surrender by the holder of the debt securities at the office or agency maintained by Ecopetrol for this purpose in the
Borough of Manhattan, The City of New York, currently the office of the trustee at 240 Greenwich Street, Floor 7 East, New York, NY.
Ecopetrol will pay interest due on the maturity date of a certificated note to the person to whom payment of the principal and premium,
if any, will be made. Ecopetrol will pay interest due on a certificated note on any interest payment date other than the maturity date
by check mailed to the address of the holder entitled to the payment as the address shall appear in the note register of Ecopetrol. Notwithstanding
the foregoing, a holder of U.S.$10.0 million or more in aggregate principal amount of certificated notes will be entitled to receive
interest payments, if any, on any interest payment date other than the maturity date by wire transfer of immediately available funds
if appropriate wire transfer instructions have been received in writing by the trustee not less than 15 calendar days prior to the interest
payment date. Any wire transfer instructions received by the trustee will remain in effect until revoked by the holder. Any interest
not punctually paid or duly provided for on a certificated note on any interest payment date other than the maturity date will cease
to be payable to the holder of any note as of the close of business on the related record date and may either be paid (1) to the
person in whose name the certificated note is registered at the close of business on a special record date for the payment of the defaulted
interest that is fixed by Ecopetrol, written notice of which will be given to the holders of the debt securities not less than 30 calendar
days prior to the special record date, or (2) at any time in any other lawful manner.
All monies paid by Ecopetrol to the trustee or
any paying agent for the payment of principal of, and premium and interest on, any note which remains unclaimed for two years after the
principal, premium or interest is due and payable may be repaid to Ecopetrol and, after that payment, the holder of any note will look
only to Ecopetrol for payment.
Form, Denomination and Registration
Except as otherwise set forth in the applicable
prospectus supplement, the debt securities will be issued in book-entry form in minimum denominations of U.S.$1,000 and integral multiples
of U.S.$1,000 in excess thereof.
So long as the depositary, which initially will
be DTC, or its nominee is the registered owner of a global note, the depositary or its nominee, as the case may be, will be the sole
holder of the debt securities represented by the global note for all purposes under the indenture. Except as otherwise provided in this
section, the beneficial owners of the global notes representing the debt securities will not be entitled to receive physical delivery
of certificated notes and will not be considered the holders of the debt securities for any purpose under the indenture, and no global
note representing the book-entry notes will be exchangeable or transferable. Accordingly, each beneficial owner must rely on the procedures
of the depositary and, if the beneficial owner is not a participant of the depositary, then the beneficial owner must rely on the procedures
of the participant through which the beneficial owner owns its interest in order to exercise any rights of a holder under the global
notes or the indenture. The laws of some jurisdictions may require that certain purchasers of debt securities take physical delivery
of the debt securities in certificated form. Such limits and laws may impair the ability to transfer beneficial interests in a global
note representing the debt securities.
The global notes representing the debt securities
will be exchangeable for certificated notes of like tenor and terms and of differing authorized denominations aggregating a like principal
amount, only if the depositary notifies us that it is unwilling or unable to continue as depositary for the global notes, the depositary
ceases to be a clearing agency registered under the Exchange Act, we in our sole discretion determine that the global notes shall be
exchangeable for certificated notes, or there shall have occurred and be continuing an Event of Default under the indenture with respect
to the debt securities.
Upon any exchange, the certificated notes shall
be registered in the names of the beneficial owners of the global notes representing the debt securities, which names shall be provided
by the depositary’s relevant participants (as identified by the depositary) to the trustee.
Because of time zone differences, the securities
account of a Euroclear or Clearstream Banking participant purchasing a beneficial interest in a global note from a depositary participant
will be credited during the securities settlement processing day, which must be a business day for Euroclear or Clearstream Banking,
as applicable, immediately following the depositary’s settlement date. Credit of a transfer of a beneficial interest in a global
note settled during that processing day will be reported to the applicable Euroclear or Clearstream Banking participant on that day.
Cash received in Euroclear or Clearstream Banking as a result of a transfer of a beneficial interest in a global note by or through a
Euroclear or Clearstream Banking participant to a depositary participant will be received with value on the depositary’s settlement
date but will be available in the applicable Euroclear or Clearstream Banking cash account only as of the business day following settlement
in the depositary.
Information Relating to the Depositary. The following is based
on information furnished by the depositary:
The depositary will act as the depositary for
the debt securities. The debt securities will be issued as fully registered senior debt securities registered in the name of Cede &
Co., which is the depositary’s partnership nominee. Fully registered global notes will be issued for the debt securities, in the
aggregate principal amount of the issue, and will be deposited with the depositary.
The depositary is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a
“clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. The depositary holds securities
that its participants deposit with the depositary. The depositary also facilitates the settlement among participants of securities transactions,
including transfers and pledges, in deposited securities through electronic computerized book-entry changes to participants’ accounts,
thereby eliminating the need for physical movement of senior debt securities certificates. Direct participants of the depositary include
securities brokers and dealers, including the initial purchasers of the debt securities, banks, trust companies, clearing corporations
and certain other organizations. The depositary is owned by a number of its direct participants, including the initial purchasers of
the debt securities and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. Access to the depositary’s system is also available to indirect participants, which includes securities
brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either
directly or indirectly. The rules applicable to the depositary and its participants are on file with the SEC.
Purchases of debt securities under the depositary’s
system must be made by or through direct participants, which will receive a credit for the debt securities on the depositary’s
record. The ownership interest of each beneficial owner, which is the actual purchaser of any note, represented by global notes, is in
turn to be recorded on the direct and indirect participants’ records. Beneficial owners will not receive written confirmation from
the depositary of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the direct or indirect participants through which the beneficial owner entered
into the transaction. Transfers of ownership interests in the global notes representing the debt securities are to be accomplished by
entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners of the global notes representing the
debt securities will not receive certificated notes representing their ownership interests therein, except in the limited circumstances
described above.
To facilitate subsequent transfers, all global
notes representing the debt securities which are deposited with, or on behalf of, the depositary are registered in the name of the depositary’s
nominee, Cede & Co. The deposit of global notes with, or on behalf of, the depositary and their registration in the name of
Cede & Co. effect no change in beneficial ownership. The depositary has no knowledge of the actual beneficial owners of the
global notes representing the debt securities; the depositary’s records reflect only the identity of the direct participants to
whose accounts the debt securities are credited, which may or may not be the beneficial owners. The participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications
by the depositary to direct participants, by direct participants to indirect participants, and by direct and indirect participants to
beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect
from time to time.
Neither the depositary nor Cede & Co.
will consent or vote with respect to the global notes representing the debt securities. Under its usual procedure, the depositary mails
an omnibus proxy to Ecopetrol as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.’s
consenting or voting rights to those direct participants to whose accounts the debt securities are credited on the applicable record
date (identified in a listing attached to the omnibus proxy).
Principal, premium, if any, and/or interest payments
on the global notes representing the debt securities will be made to the depositary. The depositary’s practice is to credit direct
participants’ accounts on the applicable payment date in accordance with their respective holdings shown on the depositary’s
records unless the depositary has reason to believe that it will not receive payment on the date. Payments by participants to beneficial
owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers
in bearer form or registered in “street name”, and will be the responsibility of the participant and not of the depositary,
the trustee or Ecopetrol, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal,
premium, if any, and/or interest to the depositary is the responsibility of Ecopetrol or the trustee, disbursement of the payments to
direct participants will be the responsibility of the depositary, and disbursement of the payments to the beneficial owners will be the
responsibility of direct and indirect participants.
The depositary may discontinue providing its
services as securities depositary with respect to the debt securities at any time by giving reasonable notice to Ecopetrol or the trustee.
Under such circumstances, in the event that a successor securities depositary is not obtained, certificated notes are required to be
printed and delivered.
Ecopetrol may decide to discontinue use of the
system of book-entry transfers through the depositary or a successor securities depositary. In that event, certificated notes will be
printed and delivered.
Although the depositary, Euroclear and Clearstream
Banking have agreed to the procedures described above in order to facilitate transfers of interests in the global notes among participants
of the depositary, Euroclear and Clearstream Banking, they are under no obligation to perform or continue to perform these procedures,
and these procedures may be discontinued at any time. Neither the trustee nor Ecopetrol will have any responsibility for the performance
by the depositary, Euroclear or Clearstream Banking or their respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
Trading. Transfers between participants
in the depositary will be effected in the ordinary way in accordance with the depositary’s rules and operating procedures,
while transfers between participants in Euroclear and Clearstream Banking will be effected in the ordinary way in accordance with their
respective rules and operating procedures.
The information in this subsection “—Form,
Denomination and Registration” concerning the depositary, Euroclear and Clearstream Banking and their respective book-entry systems
has been obtained from the depository, Euroclear and Clearstream Banking but Ecopetrol takes responsibility solely for the accuracy of
its extraction of this information.
Certain Covenants
The indenture provides that the covenants set
forth below are applicable to Ecopetrol.
Payment of Principal and Interest.
Ecopetrol will duly and punctually pay the principal of and any premium and interest and other amounts (including any Additional Amounts
in the event withholding and other taxes are imposed in Colombia) on the debt securities in accordance with the debt securities and the
indenture.
Maintenance of Corporate Existence.
Ecopetrol will maintain its corporate existence and take all reasonable actions to maintain all rights, privileges and the like necessary
or desirable in the normal conduct of business, activities or operations, unless the Board of Directors determines (based on appropriate
shareholder authorization, if necessary) that preserving Ecopetrol’s corporate existence is no longer desirable in the conduct
of Ecopetrol’s business and is not disadvantageous in any material respect to holders.
Ranking. Ecopetrol will ensure
that the debt securities will at all times constitute its general senior, unsecured and unsubordinated obligations and will rank pari
passu, without any preferences among themselves, with all of its other present and future unsecured and unsubordinated obligations
of Ecopetrol that constitute External Indebtedness (other than obligations preferred by statute or by operation of law).
Statement by Officers as to Default and
Notices of Events of Default. Within 10 days (or promptly with respect to certain events of default relating to Ecopetrol’s
insolvency and in any event no later than 10 days) after Ecopetrol becomes aware or should reasonably become aware of the occurrence
of any default or Event of Default under the indenture or the debt securities, it will notify the trustee in writing of the occurrence
of such default or Event of Default.
Provision of Financial Statements and Reports.
In the event that Ecopetrol files any financial statements or reports with the SEC or publishes or otherwise makes such statements or
reports publicly available in Colombia, the United States or elsewhere, Ecopetrol will furnish a copy of the statements or reports to
the trustee within 15 days of the date of filing or the date the information is published or otherwise made publicly available.
Ecopetrol will provide, together with each of
the financial statements delivered as described in the preceding paragraph, an officer’s certificate stating (i) that a review
of Ecopetrol’s activities has been made during the period covered by such financial statements with a view to determining whether
Ecopetrol has kept, observed, performed and fulfilled its covenants and agreements under the indenture; and (ii) that no Event of
Default, or event which with the giving of notice or passage of time or both would become an Event of Default, has occurred during that
period or, if one or more have actually occurred, specifying all those events and what actions have been taken and will be taken with
respect to that Event of Default or other event.
Delivery of these reports, information and documents
to the trustee is for informational purposes only and the trustee’s receipt of any of those will not constitute constructive notice
of any information contained therein or determinable from information contained therein, including Ecopetrol’s compliance with
any of its covenants under the indenture (as to which the trustee is entitled to rely exclusively on officer’s certificates).
Money for Securities Payments to Be Held
in Trust. If Ecopetrol will at any time act as its own paying agent with respect to any notes, it will, on or before each
due date of the principal of, any premium or interest on or Additional Amounts with respect to any of notes, segregate and hold in trust
for the benefit of the persons entitled thereto a sum in the currency or currencies, currency unit or units or composite currency or
currencies in which the notes are payable (except as otherwise specified pursuant to Section 301 of the indenture for the notes)
sufficient to pay the principal or any premium, interest or Additional Amounts so becoming due until such sums shall be paid to such
persons or otherwise disposed of as herein provided, and shall promptly notify the trustee of its action or failure so to act.
Whenever Ecopetrol will have one or more paying
agents for any notes, it will, on or prior to each due date of the principal of, any premium or interest on or any Additional Amounts
with respect to any notes, deposit with any paying agent a sum (in the currency or currencies, currency unit or units or composite currency
or currencies described in the preceding paragraph) sufficient to pay the principal or any premium, interest or Additional Amounts so
becoming due, such sum to be held in trust for the benefit of the persons entitled thereto, and (unless such paying agent is the trustee)
Ecopetrol will promptly notify the trustee of its action or failure so to act.
Ecopetrol will cause each paying agent for any
notes (other than the trustee) to execute and deliver to the trustee an instrument in which such paying agent shall agree with the trustee,
subject to the provisions of Section 1003 of the indenture, that such paying agent shall:
(1) hold all sums held by it for the payment of the
principal of, any premium or interest on or any Additional Amounts with respect to notes in trust for the benefit of the persons entitled
thereto until such sums will be paid to such persons or otherwise disposed of as provided in or pursuant to the indenture, and Ecopetrol
will have no proprietary or other interest whatsoever in such amounts; and so long as the trustee or such paying agent holds the funds
so deposited and such funds are available to holders of the notes entitled thereto in accordance with the terms of the notes and the
indenture and holders of the notes are not prevented from claiming such funds in accordance with the terms of the notes and the indenture,
Ecopetrol will not be considered to have defaulted in its obligation to make payment of such amounts on the date on which such amounts
become due and payable;
(2) give the trustee notice of any default by Ecopetrol
(or any other obligor upon the notes) in the making of any payment of principal, any premium or interest on or any Additional Amounts
with respect to the notes; and
(3) at any time during the continuance of any such
default, upon the written request of the trustee, forthwith pay to the trustee all sums so held in trust by such paying agent.
Ecopetrol may at any time, for the purpose of
obtaining the satisfaction and discharge of the indenture or for any other purpose, pay, or by company order direct any paying agent
to pay, to the trustee all sums held in trust by Ecopetrol or such paying agent, such sums to be held by the trustee upon the same terms
as those upon which such sums were held by Ecopetrol or such paying agent; and, upon such payment by any paying agent to the trustee,
such paying agent will be released from all further liability with respect to such sums.
Except as otherwise provided in the notes or
in the indenture, any money deposited with the trustee or any paying agent, or then held by Ecopetrol, in trust for the payment of the
principal of, any premium or interest on or any Additional Amounts with respect to any note and remaining unclaimed for two years after
such principal or any such premium or interest or any such Additional Amounts will have become due and payable shall be paid to Ecopetrol
on company request, or (if then held by Ecopetrol) will be discharged from such trust; and the holder of such note shall thereafter,
as an unsecured general creditor, look only to Ecopetrol for payment thereof, and all liability of the trustee or such paying agent with
respect to such trust money, and all liability of Ecopetrol as trustee thereof, will thereupon cease; provided, however, that the trustee
or such paying agent, before being required to make any such repayment, may at the expense of Ecopetrol cause to be published once, in
an authorized newspaper in each place of payment for such series or to be mailed to holders of registered notes of such series, or both,
notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date
of such publication or mailing nor will it be later than two years after such principal and any premium or interest or Additional Amounts
will have become due and payable, any unclaimed balance of such money then remaining will be repaid to Ecopetrol.
Waiver of Certain Covenants. Ecopetrol
may omit in any particular instance to comply with any term, provision or condition set forth in Section 1002 of the indenture,
inclusive with respect to the notes if before the time for such compliance the holders of at least a majority in principal amount of
the outstanding notes, by act of such holders, either will waive such compliance in such instance or generally will have waived compliance
with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the obligations of Ecopetrol and the duties of the trustee
in respect of any such term, provision or condition will remain in full force and effect.
Limitation on Liens. Ecopetrol
will not, and will not permit any Material Subsidiary to, directly or indirectly, create, incur or assume any Lien, except for Permitted
Liens, to secure the payment of Indebtedness of Ecopetrol or any Material Subsidiary, unless effective provision is made whereby the
debt securities (together with, if Ecopetrol shall so determine, any other Indebtedness ranking equally with the debt securities, whether
then existing or thereafter created) are secured equally and ratably with (or prior to) such Indebtedness (but only for so long as such
Indebtedness is so secured).
The foregoing limitation on Liens shall not apply
to the creation, incurrence or assumption of the following Liens (“Permitted Liens”):
| 1. | Liens arising by operation of law, such as merchants’, maritime
or other similar Liens arising in the ordinary course of business or Liens in respect of
taxes, assessments or other governmental charges that are not yet delinquent or that are
being contested in good faith by appropriate proceedings; |
| 2. | Liens arising in the ordinary course of business in connection with
Indebtedness maturing not more than one year after the date on which that Indebtedness was
originally incurred and which is related to the financing of export, import or other trade
transactions; |
| 3. | Liens resulting from the deposit of funds or evidences of Indebtedness
in trust for the purpose of discharging or defeasing Indebtedness of Ecopetrol or any Material
Subsidiary; |
| 4. | Liens on any property or assets existing at the time of acquisition
thereof by Ecopetrol or any Material Subsidiary, including Liens on assets or property of
a Person existing at the time such Person is merged into, consolidated with or acquired by
Ecopetrol or any Material Subsidiary or becomes a Material Subsidiary; provided that any
such Lien is not incurred in contemplation of such merger, consolidation or acquisition (unless
such Lien was created to secure or provide for the payment of any part of the purchase price
of such property or assets) and does not secure any property of Ecopetrol or any Material
Subsidiary other than the property and assets subject to such Lien prior to such merger,
consolidation or acquisition; |
| 5. | Liens existing as of the date of original issuance of the debt securities; |
| 6. | Liens securing Indebtedness (including in the form of Capitalized Lease
Obligations and purchase money Indebtedness) incurred for the purpose of financing the cost
(including without limitation the cost of design, development, site acquisition, construction,
integration, manufacture or acquisition) of real or personal property (tangible or intangible)
which is incurred contemporaneously therewith or within 180 days thereafter; provided (i) such
Liens secure Indebtedness in an amount not in excess of the cost of such property (plus an
amount equal to the reasonable fees and expenses incurred in connection with the incurrence
of such Indebtedness) and (ii) such Liens do not extend to any property of Ecopetrol
or any Material Subsidiary other than the property for which such Indebtedness was incurred; |
| 7. | Liens to secure the performance of statutory and common law obligations,
bids, trade contracts, judgments, surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business; |
| 8. | Liens arising out of judgments or awards against Ecopetrol or a Material
Subsidiary which have not resulted in an Event of Default; |
| 9. | Liens to secure the debt securities; |
| 10. | (i) Liens granted in favor of Ecopetrol and/or any Wholly Owned
Subsidiary to secure Indebtedness owing to Ecopetrol or such Wholly Owned Subsidiary, and
(ii) Liens granted by a Material Subsidiary in favor of another Material Subsidiary
to secure Indebtedness owing to such other Material Subsidiary; |
| 11. | Legal or equitable encumbrances deemed to exist by reason of the inclusion
of customary negative pledge provisions in any financing document of Ecopetrol or any Subsidiary; |
| 12. | Liens securing Internal Indebtedness; |
| 13. | Any Lien in respect of Indebtedness representing the extension, refinancing,
renewal or replacement (or successive extensions, refinancings, renewals or replacements)
of Indebtedness secured by Liens referred to in clauses (2), (3), (4), (5), (6), (7), (8),
(9), (10) and (11) above and (17) below; provided that the principal of the Indebtedness
secured thereby does not exceed the principal of the Indebtedness secured thereby immediately
prior to such extension, renewal or replacement, plus any accrued and unpaid interest or
capitalized interest payable thereon, reasonable fees and expenses incurred in connection
therewith, and the amount of any prepayment premium necessary to accomplish any refinancing;
and provided, further, that such extension, renewal or replacement shall be limited to all
or a part of the property (or interest therein) subject to the Lien so extended, renewed
or replaced (plus improvements and construction on such property); |
| 14. | Pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security laws or
regulations; |
| 15. | Easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business that do not
secure any monetary obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of Ecopetrol or any of its Subsidiaries; |
| 16. | Liens arising out of governmental concessions or licenses held by
Ecopetrol or any of its Subsidiaries; |
| 17. | Liens over construction or development project assets (including shares
or other equity interests of any Person formed to own, construct, or develop such assets)
so long as recourse is limited to recoveries (including any revenues) in respect of such
construction or development of project assets; |
| 18. | Liens or deposits required by any contract or statute or other regulatory
requirements in order to permit Ecopetrol or any Subsidiary of Ecopetrol to perform any contract
or subcontract made by it with or at the request of a governmental entity or any department,
agency or instrumentality thereof, or to secure return of partial progress, advance or any
other payments to Ecopetrol or any Subsidiary by a governmental entity or any department,
agency, or instrumentality thereof pursuant to the provisions of any contract or statute;
and |
| 19. | Liens in respect of Indebtedness the principal amount of which in
the aggregate, together with all other Liens not otherwise qualifying as Permitted Liens
pursuant to another part of this definition of Permitted Liens, does not exceed 15% of Ecopetrol’s
Consolidated Total Assets. For purposes of this covenant, the value of any Lien securing
Indebtedness will be computed on the basis of the lesser of (i) the outstanding principal
amount of such secured Indebtedness and (ii) the higher of (x) the book value or
(y) the Fair Market Value of the property securing such Indebtedness. |
Repurchase of Debt securities upon a Change
of Control Repurchase Event. Ecopetrol must commence, within 30 days of the occurrence of a Change of Control Repurchase Event,
and consummate an offer to purchase (“Offer to Purchase”) all debt securities then outstanding, at a purchase price equal
to 101% of the principal amount of the debt securities on the date of repurchase, plus accrued interest (if any) to the date of purchase.
Ecopetrol is not required to make an Offer to Purchase following a Change of Control Repurchase Event if a third party makes an Offer
to Purchase that would be in compliance with the provisions described in this covenant if it were made by Ecopetrol and such third party
purchases (for the consideration referred to in the immediately preceding sentence) the debt securities validly tendered and not withdrawn.
Prior to the mailing of the notice to holders commencing such Offer to Purchase, but in any event within 30 days following any Change
of Control Repurchase Event, Ecopetrol covenants to (i) repay in full all indebtedness of Ecopetrol that would prohibit the repurchase
of the debt securities pursuant to such Offer to Purchase or (ii) obtain any requisite consents under instruments governing any
such indebtedness of Ecopetrol to permit the repurchase of the debt securities. Ecopetrol shall first comply with the covenant in the
preceding sentence before it repurchases debt securities upon a Change of Control Repurchase Event pursuant to this covenant.
We will comply, to the extent applicable, with
the requirements of Rule 14e-1 of the Exchange Act and other applicable securities laws or regulations in connection with making
an offer to purchase debt securities upon the occurrence of a Change of Control Repurchase Event. To the extent that the provisions of
any applicable securities laws or regulations conflict with provisions of this covenant, we will comply with the applicable securities
laws and regulations and will not be deemed to have breached our obligations under this covenant by virtue of our compliance with such
securities laws or regulations.
There can be no assurance that Ecopetrol will
have sufficient funds available at the time of any Change of Control Repurchase Event to make the repurchases of debt securities required
by the foregoing covenant (as well as by any covenant contained in other securities of Ecopetrol which might be outstanding at the time).
Additional Amounts. Pursuant to
the indenture, all payments to be made in respect of the debt securities are to be made free and clear of, and without deduction or withholding
for or on account of, any taxes imposed or levied by or on behalf of Colombia or any political subdivision or authority of or in such
jurisdiction having the power to tax (“Taxes”, and such jurisdictions, “Taxing Jurisdiction”), except to the
extent such Taxes are imposed by applicable law. In the event that any Taxes are required by applicable law to be deducted or withheld
from any payment required to be made in respect of the debt securities or otherwise under the indenture, then the amount of such payment
shall be increased by an amount as may be necessary such that such payment is made, after withholding or deduction for or on account
of such Taxes, in an amount equal to the amount that would have been received by the applicable recipient(s) in respect of such
payment had no such Taxes (including any Taxes payable in respect of such Additional Amounts) been required to be so deducted or withheld
(any such amounts, “Additional Amounts”). Furthermore, the amount of any Taxes required to be withheld or deducted from any
payment made in respect of the debt securities or otherwise under the indenture shall be withheld or deducted from such payment (as increased
by any Additional Amounts) and paid to the Taxing Jurisdiction imposing such Taxes in accordance with applicable law.
Notwithstanding the preceding sentences, no such
Additional Amounts will be payable in respect of:
| i. | any Tax assessed or imposed by any Taxing
Jurisdiction to the extent that such Tax would not have been assessed or imposed but for
the applicable recipient or beneficial owner of such payment having a present or former connection
with the Taxing Jurisdiction (including, without limitation, such holder being or having
been a citizen or resident thereof or having been engaged in a trade or business or present
therein or having, or having had, a permanent establishment therein), other than solely by
reason of the applicable recipient’s participation in the transactions effected by
the indenture and the receipt of payments thereunder (including under the debt securities); |
| ii. | any estate, inheritance, gift, personal
property, sales, use, excise, transfer or other similar Tax imposed with respect to such
payment; |
| iii. | any such Taxes that would not have been
imposed but for the failure of the applicable recipient or beneficial owner of such payment
to comply with any certification, identification, information, documentation or other reporting
requirement to the extent (a) such compliance is required by applicable law or an applicable
treaty as a precondition to exemption from, or reduction in the rate of deduction or withholding
of, such Taxes and (b) at least 30 days before the first payment date with respect to
which the obligor with respect to a payment shall apply this clause (iii), such obligor shall
have notified such recipient in writing that such recipient will be required to comply with
such requirement; |
| iv. | any Tax imposed as a result of any note
being presented for payment (where presentation is required) more than 15 days after the
relevant payment is first made available for payment to the applicable recipient (except
to the extent that such recipient would have been entitled to Additional Amounts had any
note been presented during such 15-day period); |
| v. | any Tax payable other than by withholding
or deduction from payments of principal or of interest on any note; or |
| vi. | any Tax imposed on or in respect of a payment
to or on behalf of a holder or beneficial owner who would have been able to avoid such Tax
in a commercially reasonable manner by presenting the relevant note to any other paying agent; |
| vii. | any Tax imposed on or in respect of any
note pursuant to sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”), any successor law or regulation implementing or complying with,
or introduced in order to conform to, such sections or any intergovernmental agreement or
any agreement entered into pursuant to section 1471(b)(1) of the Code; or |
| viii. | any combination of the circumstances described
in clauses (i) through (vii), |
nor will any Additional Amounts be paid with
respect to any payment to a recipient who is a fiduciary, partnership, limited liability company or any Person other than the sole beneficial
owner of such payment to the extent that a beneficiary or settlor with respect to such fiduciary or a member of such partnership, limited
liability company or a beneficial owner would not have been entitled to the Additional Amounts had such beneficiary, settlor, member
or beneficial owner been in the place of such recipient.
Ecopetrol will provide the trustee upon its request
with documentation reasonably satisfactory to it evidencing the payment of Taxes in respect of which Ecopetrol has paid any Additional
Amounts. Copies of such documentation will be made available to the applicable recipients upon written request therefor to the trustee.
The obligation to pay Additional Amounts will survive the repayment of the debt securities and the sale or transfer of the debt securities
(or beneficial interests therein) by any investor.
In addition, Ecopetrol shall pay any and all
other Taxes (“Other Taxes”) imposed by the relevant taxing authority imposing such Other Taxes in accordance with applicable
law, excluding any such Other Taxes imposed by any jurisdiction outside of Colombia. As used herein, Other Taxes shall mean any and all
stamp, documentary or similar taxes, or any other excise or similar levies that arise on account of any payment to be made under any
note or from the execution, delivery, registration, recording or enforcement of the debt securities and the indenture (other than any
Taxes paid in accordance with the first paragraph of “—Additional Amounts”).
Optional Redemption
Except as otherwise set forth below and in the
applicable prospectus supplement, we will not be permitted to redeem the debt securities before their stated maturity. The debt securities
will not be entitled to the benefit of any sinking fund-meaning that we will not deposit money on a regular basis into any separate account
to repay your debt securities. In addition, except as set forth above under “—Repurchase of Debt securities upon a Change
of Control Repurchase Event”, you will not be entitled to require us to repurchase your debt securities from you before the stated
maturity.
Withholding Tax Redemption
The debt securities may be redeemed at Ecopetrol’s
election, in whole but not in part on any date, by the giving of notice as provided herein under “—Notices”, at a price
equal to the outstanding principal amount thereof, together with any Additional Amounts and accrued and unpaid interest to the redemption
date, if, as a result of any change in, or amendment to, laws or treaties (or any regulation or rulings promulgated thereunder) of the
Taxing Jurisdiction or any change in the official application, administration or interpretation of such laws, treaties, regulations or
rulings in such jurisdiction, Ecopetrol is or will become obligated to pay any Additional Amounts on the debt securities, if such change
or amendment is announced and becomes effective on or after the issuance of the debt securities and such obligation cannot be avoided
by taking commercially reasonable measures available to Ecopetrol; provided, however, that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which Ecopetrol would be obligated to pay such Additional Amounts.
Notice of any redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of the debt securities to be redeemed. Prior to the giving
of notice of redemption of such debt securities pursuant to the indenture, Ecopetrol will deliver to the trustee an officer’s certificate
and a written opinion of recognized Colombian counsel independent of Ecopetrol and its Affiliates to the effect that all governmental
approvals necessary for it to effect such redemption have been or at the time of redemption will be obtained and in full force and effect,
and that Ecopetrol has or will become obligated to pay such Additional Amounts as a result of such change, amendment, application, administration
or interpretation. On the redemption date, interest will cease to accrue on the debt securities that have been redeemed.
Open Market Purchases
Ecopetrol or any of its Subsidiaries may at any
time purchase any note in the open market or otherwise at any price.
Merger and Consolidation
Ecopetrol may not consolidate with or merge into,
or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets and the properties and assets
of its Subsidiaries (taken as a whole) as an entirety to, any entity or entities (including limited liability companies) unless (1) the
successor entity or entities, each of which shall be organized under the laws of Colombia or of the United States or a State thereof,
shall assume by supplemental indenture all the obligations of Ecopetrol under the debt securities and the indenture (including the obligation
to pay the Additional Amounts) and such successor entity or entities delivers certain certificates, opinions of counsel and other documents
to the trustee, (2) if the other entity is organized under the laws of a country other than the United States, a state thereof or
Colombia, Ecopetrol indemnifies holders against any tax, assessment or governmental charge or other cost resulting from the transaction,
(3) prior to and immediately after giving effect to the transaction or series of transactions, no default or Event of Default shall
have occurred and be continuing, (4) Ecopetrol delivers certain certificates, opinions of its counsel and other documents to the
trustee and (5) if, as a result of such transaction, properties or assets of Ecopetrol would become subject to an encumbrance which
would not be permitted by the terms of the debt securities, Ecopetrol or the successor entity or entities shall take such steps as are
necessary to secure such debt securities equally and ratably with all indebtedness secured thereunder. Thereafter, all such obligations
of Ecopetrol shall terminate. Notwithstanding the foregoing, nothing herein shall prohibit Ecopetrol from selling, assigning, transferring,
leasing, conveying or otherwise disposing of any of Ecopetrol’s Subsidiaries at the date of the indenture or any interest therein
or any assets thereof.
Events of Default
The term “Event of Default” means any one of
the following events with respect to the debt securities:
| 1. | default in the payment of any interest
on any note, or any Additional Amounts payable with respect thereto, when the interest becomes
or the Additional Amounts become due and payable, and continuance of the default for a period
of 30 days; |
| 2. | default in the payment of the principal
of or any premium on any note, or any Additional Amounts payable with respect thereto, when
the principal or premium becomes or the Additional Amounts become due and payable at their
maturity, upon redemption or otherwise, and continuance of the default for a period of 7
days; |
| 3. | default in the performance, or breach,
of any covenant or warranty of Ecopetrol in the indenture (other than a covenant or warranty
a default in whose performance or breach is elsewhere in Section 501 of the indenture
specifically dealt with or which has expressly been included in the indenture solely for
the benefit of a series of Securities other than that series) or the debt securities and
continuance of the default or breach for a period of 60 days (inclusive of any cure period
contained in any such covenant or other term for compliance thereunder) after there has been
given, by registered or certified mail, to Ecopetrol by the trustee or to Ecopetrol and the
trustee by the holders of at least 25% in principal amount of the outstanding senior debt
securities of the series, a written notice specifying the default or breach and requiring
it to be remedied and stating that the notice is a “Notice of Default” under
the indenture; |
| 4. | any event of default as defined in any
mortgage, indenture or instrument under which there may be issued, or by which there may
be secured or evidenced, any External Indebtedness of Ecopetrol, other than the debt securities,
or any Material Subsidiary of Ecopetrol, whether the External Indebtedness now exists or
shall hereafter be created, shall occur and shall result in such External Indebtedness in
aggregate principal amount (or, if applicable, with an issue price and accreted original
issue discount) in excess of U.S.$100.0 million (or its equivalent in another currency) becoming
or being declared due and payable prior to the date on which it would otherwise become due
and payable; |
| 5. | the entry by a court having competent
jurisdiction of one or more final and non-appealable judgments or final decrees against Ecopetrol
or a Material Subsidiary involving in the aggregate a liability (not paid or fully covered
by insurance) of 1% of Consolidated Net Tangible Assets (or its equivalent in another currency)
or more, and all such judgments or decrees have not been vacated, discharged or stayed within
180 days after the date set for payment; |
| 6. | Ecopetrol admits that it is generally
unable to pay its debts as they become due or passes a resolution to dissolve; |
| 7. | the entry by a court having competent
jurisdiction of: |
a. a
decree or order for relief in respect of Ecopetrol in an involuntary proceeding under Bankruptcy Law, which decree or order shall remain
unstayed and in effect for a period of 180 consecutive days;
b. a
decree or order in an involuntary proceeding under Bankruptcy Law adjudging Ecopetrol to be insolvent, or approving a petition seeking
a similar relief under Bankruptcy Law in respect of Ecopetrol, which decree or order shall remain unstayed and in effect for a period
of 180 consecutive days; or
c. a
final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of Ecopetrol
or of any substantial part of the property of Ecopetrol or ordering the winding up or liquidation of the affairs of Ecopetrol; and
| 8. | the commencement by Ecopetrol of a voluntary
proceeding under any applicable bankruptcy, insolvency or other similar law or of a voluntary
proceeding seeking to be adjudicated insolvent or the consent by Ecopetrol to the entry of
a decree or order for relief in an involuntary proceeding under any applicable bankruptcy,
insolvency or other similar law or to the commencement of any insolvency proceedings against
it, or the filing by Ecopetrol of a petition or answer or consent seeking relief under any
applicable bankruptcy, insolvency or other similar law, or the consent by Ecopetrol to the
filing of the petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or similar official of Ecopetrol or any substantial part of
the property of Ecopetrol or the making by Ecopetrol of an assignment for the benefit of
creditors, or the taking of corporate action by Ecopetrol in furtherance of any such action. |
If an Event of Default with respect to the debt
securities at the time outstanding (other than an Event of Default specified in clause (7) or (8) above) occurs and is continuing,
then the trustee or the holders of not less than 25% in principal amount of the outstanding debt securities may declare the principal
of the debt securities, to be due and payable immediately, by a notice in writing to Ecopetrol (and to the trustee if given by the holders),
and upon any declaration the principal shall become immediately due and payable. If an Event of Default specified in clause (7) or
(8) above occurs, all unpaid principal of and accrued interest on the debt securities shall become and be immediately due and payable
without any declaration or other act on the part of the trustee or any holder of any note.
At any time after a declaration of acceleration
or automatic acceleration with respect to the debt securities has been made and before a judgment or decree for payment of the money
due has been obtained by the trustee, the holders of not less than a majority in principal amount of the outstanding debt securities,
by written notice to Ecopetrol and the trustee, may rescind and annul the declaration and its consequences if:
| 1. | Ecopetrol has paid or deposited with the
trustee a sum of money sufficient to pay all overdue installments of any interest on and
Additional Amounts with respect to all the debt securities and the principal of and any premium
on the debt securities which have become due otherwise than by the declaration of acceleration
and interest on the debt securities; and |
| 2. | all events of default with respect to
the debt securities, other than the nonpayment of the principal of, any premium and interest
on, and any Additional Amounts with respect to the debt securities which shall have become
due solely by the acceleration, shall have been cured or waived. |
No rescission shall affect any subsequent default
or impair any right consequent thereon.
Meetings of Noteholders
A meeting of noteholders may be called by the
trustee, Ecopetrol or the holders of at least 25% in aggregate principal amount of the outstanding debt securities at any time and from
time to time, to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other actions provided
by the indenture to be made, given or taken by holders of debt securities. The meeting shall be held at such time and at such place in
the Borough of Manhattan, The City of New York or in such other place as the trustee shall determine. Notice of every meeting of noteholders,
setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given
not less than 21 nor more than 180 days prior to the date fixed for the meeting.
The persons entitled to vote a majority in principal
amount of the outstanding debt securities shall constitute a quorum for a meeting. Any resolution presented to a meeting at which a quorum
is present may be adopted only by the affirmative vote of the holders of a majority in principal amount of the outstanding debt securities.
Any resolution passed or decision taken at any meeting of holders of debt securities duly held in accordance with the indenture shall
be binding on all the holders of debt securities, whether or not such holders were present or represented at the meeting.
Modification and Waiver
Modification and amendments of the indenture
may be made by Ecopetrol and the trustee with the consent of the holders of not less than a majority in aggregate principal amount of
the outstanding debt securities affected thereby; provided, however, that no modification or amendment may, without the consent of the
holder of each outstanding debt securities affected thereby:
| 1. | change the stated maturity of the principal
of, or any premium or installment of interest on, or any Additional Amounts with respect
to, any note; |
| 2. | reduce the principal amount of, or the
rate of interest on, or any Additional Amounts with respect to, or any premium payable upon
the redemption of, any note; |
| 3. | shorten the period during which Ecopetrol
is not permitted to redeem any of the debt securities (except as permitted by the indenture),
or permit Ecopetrol to redeem such debt securities prior to their stated maturity if, prior
to such action, Ecopetrol is not permitted to do so (except as permitted by the indenture); |
| 4. | change any obligation to pay the Additional
Amounts described under “Certain Covenants—Additional Amounts”; |
| 5. | change the place of payment or the coin
or currency in which the principal of, any premium or interest on or any Additional Amounts
with respect to any note is payable; |
| 6. | impair the right to institute suit for
the enforcement of any payment on or after the stated maturity of any note (or, in the case
of redemption, on or after the redemption date or, in the case of repayment at the option
of any holder, on or after the date for repayment); |
| 7. | reduce the percentage in principal amount
of the outstanding debt securities, the consent of whose holders is required in order to
take certain actions; |
| 8. | reduce the requirements for quorum or
voting by holders of debt securities as provided in the indenture; or |
| 9. | modify any of the provisions in the indenture
regarding the waiver of past defaults and the waiver of certain covenants by the holders
of debt securities except to increase any percentage vote required or to provide that certain
other provisions of the indenture cannot be modified or waived without the consent of the
holder of each note affected thereby or modify any of the foregoing provisions. |
The holders of not less than a majority in aggregate
principal amount of the debt securities may, on behalf of the holders of all debt securities, waive compliance by Ecopetrol with certain
restrictive provisions of the indenture. The holders of not less than a majority in aggregate principal amount of the outstanding debt
securities may, on behalf of the holders of all debt securities, waive any past default and its consequences under the indenture with
respect to the debt securities, except a default:
| · | in the payment of principal (or premium,
if any), or any interest on or any Additional Amounts with respect to debt securities; or |
| · | in respect of a covenant or provision
of the indenture that cannot be modified or amended without the consent of the holder of
each note. |
The indenture contains provisions permitting
Ecopetrol and the trustee, without the consent of any holders of the debt securities, to enter into a supplemental indenture, among other
things, for purposes of curing any ambiguity or correcting or supplementing any provisions contained in the indenture or in any supplemental
indenture, curing any provision in the indenture which may be inconsistent with the description of the indenture or of the debt securities
in any offering document, or making other provisions in regard to the matters or questions arising under the indenture or any supplemental
indenture as the Board of Directors of Ecopetrol deems necessary or desirable and which does not adversely affect the interests of the
holders of debt securities in any material respect. Ecopetrol and the trustee, without the consent of any holders of the debt securities,
may also enter into a supplemental indenture to establish the forms or terms of any series of senior debt securities.
Notices
Except as otherwise expressly provided in or
pursuant to the indenture, where the indenture provides for notice to holders of notes of any event, such notice shall be sufficiently
given to holders of registered notes if in writing and mailed, first-class postage prepaid, to each holder of a registered note affected
by such event, at his address as it appears in the security register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice.
In any case where notice to holders of registered
notes is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular holder of
a registered note shall affect the sufficiency of such notice with respect to other holders of registered notes. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. In the case by reason of the
suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification
as shall be made with the approval of the trustee shall constitute a sufficient notification for every purpose under the indenture.
Where the indenture provides for notice in any
manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by holders of notes shall be filed with the trustee, but such filing
shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
The trustee may rely upon and comply with instructions
or directions sent via unsecured facsimile or email transmission and the trustee shall not be liable for any loss, liability or expense
of any kind incurred by Ecopetrol or the holders due to the trustee’s reliance upon and compliance with instructions or directions
given by unsecured facsimile or email transmission; provided, however, that such losses have not arisen from the gross negligence or
willful misconduct of the trustee, it being understood that the failure of the trustee to verify or confirm that the person providing
the instructions or directions, is in fact, an authorized person does not constitute gross negligence or willful misconduct.
Unclaimed Amounts
Any money deposited with the trustee or paying
agent or held by Ecopetrol, in trust, for the payment of principal, premium, interest or any Additional Amounts, that remains unclaimed
for two years after such amount becomes due and payable shall be paid to Ecopetrol on its request or, if held by Ecopetrol, shall be
discharged from such trust. The holder of the debt securities will look only to Ecopetrol for payment thereof, and all liability of the
trustee, paying agent or of Ecopetrol, as trustee, shall thereupon cease.
Certain Definitions
The following are certain of the terms defined
in the indenture:
“Affiliate” means, as applied
to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such
Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
“Bankruptcy Law” means (a) Colombian
Law 550 of 1999 and Law 1116 of 2006, or the equivalent laws that may replace them in the future, and (b) any bankruptcy, insolvency
or debtor relief statute, law or decree of the United States of America or any other jurisdiction where Ecopetrol has (i) assets
that account for 10% or more of Consolidated Total Assets or (ii) as of the date of determination, operations that account for 10%
or more of Ecopetrol’s consolidated revenues based on its most recent consolidated balance sheet prepared in accordance with IFRS.
“Board of Directors” means
the Board of Directors of Ecopetrol or any executive committee thereof, if duly authorized by the Board of Directors and under Colombian
law to act with respect to the indenture.
“Capital Stock” of any Person
means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however
designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into such equity.
“Capitalized Lease Obligation”
of any Person means any obligation of such Person to pay rent or other amounts under a lease with respect to any property (whether real,
personal or mixed) acquired or leased (other than leases for transponders) by such Person and used in its business that is required to
be accounted for as a liability on the balance sheet of such Person in accordance with IFRS and the amount of such Capitalized Lease
Obligation shall be the amount so required to be accounted for as a liability.
“Change of Control” means
an event or series of events that results in (i) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets
of Ecopetrol and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the
Securities and Exchange Act of 1934, as amended), (ii) the adoption of a plan relating to the liquidation or dissolution of Ecopetrol
or (iii) the Republic of Colombia ceasing to be the beneficial owner, directly or indirectly, of a majority in the aggregate of
the total voting power of the Voting Stock of Ecopetrol.
“Change of Control Repurchase Event”
means the occurrence of both a Change of Control and a Rating Downgrade Event.
“Consolidated Net Tangible Assets”
means, at any date, the Consolidated Total Assets of the Company less goodwill and intangibles (other than intangibles arising from,
or relating to, intellectual property, licenses or permits (including, but not limited to, emissions rights) of the Company on a consolidated
basis), in each case calculated in accordance with IFRS, less current liabilities (other than current maturities of long-term debt, in
each case calculated in accordance with IFRS).
“Consolidated Total Assets”
means, at any date, the total amount of assets of Ecopetrol, as of the end of the last period preceding such date for which a balance
sheet is prepared and published in accordance with applicable law, on a consolidated basis as determined in accordance with IFRS.
“External Indebtedness” means
Indebtedness other than Internal Indebtedness.
“Fair Market Value” means,
with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between an
informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair Market Value
shall be determined by the Board of Directors of Ecopetrol, acting in good faith and evidenced by a resolution delivered to the trustee.
“Fitch” means Fitch Ratings
Ltd.
“IFRS” means International
Financial Reporting Standards, as adopted by the International Accounting Standards Board (“IASB”).
“Indebtedness” of any Person
means, without duplication:
| 1. | any indebtedness of such Person (i) for
borrowed money or (ii) evidenced by a note, debenture or similar instrument (including
a purchase money obligation) given in connection with the acquisition of any property or
assets, including securities; |
| 2. | any guarantee by such Person of any indebtedness
of others described in the preceding clause (1); and |
| 3. | any amendment, renewal, extension or refunding
of any such indebtedness or guarantee. |
“Internal Indebtedness” means
any Indebtedness payable to Colombian residents in Colombian pesos.
“Lien” means any mortgage,
pledge, lien, hypothecation, security interest or other charge or encumbrance on any property or asset including, without limitation,
any equivalent created or arising under applicable law.
“Material Subsidiary” means
a Subsidiary of Ecopetrol which on any given date of determination accounts for more than 10% of Ecopetrol’s Consolidated Total
Assets.
“Moody’s” means Moody’s
Investors Services Inc.
“Person” means an individual,
a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
“Rating Agency” means (1) each
of Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s or S&P ceases to rate the debt securities or fails
to make a rating of the debt securities publicly available for reasons outside of our control, a “nationally recognized statistical
rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by us as a replacement
agency for Fitch, Moody’s or S&P, as the case may be.
“Rating Downgrade Event” means
the rating on the debt securities is lowered from their rating then in effect by any of the Rating Agencies on any date from the date
of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice
of the occurrence of a Change of Control (which period shall be extended so long as the rating of the debt securities is under publicly
announced consideration for possible downgrade by any of the Rating Agencies).
“S&P” means Standard &
Poor’s Ratings Services, a division of McGraw-Hill, Inc.
“Subsidiary” means any corporation,
association, limited liability company, partnership or other business entity of which a majority of the total voting power of the Capital
Stock or other interests (including partnership interests) entitled (without regard to the incurrence of a contingency) to vote in the
election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) Ecopetrol,
(ii) Ecopetrol and one or more of its Subsidiaries or (iii) one or more Subsidiaries of Ecopetrol.
“Voting Stock” means, with
respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers
or other voting members of the governing body of such Person.
“Wholly Owned” means, with
respect to any corporate entity, any Person of which 100% of the outstanding Capital Stock (other than qualifying shares, if any) having
by its terms ordinary voting power (not dependent on the happening of a contingency) to elect the board of directors (or equivalent controlling
governing body) of that Person, is at the time owned or controlled directly or indirectly by that corporate entity, by one or more wholly-owned
Subsidiaries of that corporate entity or by that corporate entity and one or more wholly-owned Subsidiaries.
Discharge, Defeasance and Covenant Defeasance
Ecopetrol may discharge certain obligations to
holders of any series of senior debt securities that have not already been delivered to the trustee for cancellation and that either
have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by irrevocably
depositing or causing to be deposited with the trustee, in trust, funds specifically pledged as security for, and dedicated solely to,
the benefit of the holders in U.S. Dollars or Government Obligations, which is defined below, in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the trustee,
to pay and discharge the entire indebtedness on the senior debt securities with respect to principal (and premium, if any) and interest
to the date of the deposit (if the senior debt securities have become due and payable) or to the maturity thereof, as the case may be.
The indenture provides that, unless the provisions
of the “Defeasance and Covenant Defeasance” section thereof are made inapplicable in respect of any series of senior debt
securities of or within any series pursuant to the “Amount Unlimited; Issuable in Series” section thereof, Ecopetrol may
elect, at any time, either:
| · | to defease and be discharged from
any and all obligations with respect to the senior debt securities (except for, among other
things, the obligation to pay Additional Amounts, if any, upon the occurrence of certain
events of taxation, assessment or governmental charge with respect to payments on the senior
debt securities and other obligations to register the transfer or exchange of the senior
debt securities, to replace temporary or mutilated, destroyed, lost or stolen senior debt
securities, to maintain an office or agency with respect to the senior debt securities and
to hold moneys for payment in trust) (“defeasance”); or |
| · | to be released from its obligations
with respect to the senior debt securities under the covenants described under “—Certain
Covenants” and “—Merger and Consolidation” above or, if provided
pursuant to the “Amount Unlimited; Issuable in Series” section of the indenture,
its obligations with respect to any other covenant, and any omission to comply with the obligations
shall not constitute a default or an Event of Default with respect to the senior debt securities
(“covenant defeasance”). |
Defeasance or covenant defeasance, as the case
may be, shall be conditioned upon the irrevocable deposit by Ecopetrol with the trustee, as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the debt securities,
of (i) an amount in Dollars, in which such senior debt securities, together with all interest appertaining thereto, are then specified
as payable at their stated maturity, or (ii) an amount of Government Obligations, which is defined below, applicable to such senior
debt securities and the interest appertaining thereto, which through the scheduled payment of principal and interest in accordance with
their terms will provide money, or a combination thereof in an amount, in any case, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the trustee, to pay and discharge the
entire indebtedness on the senior debt securities with respect to principal (and premium, if any) and interest to the date of the deposit
(if the senior debt securities have become due and payable) or to the maturity thereof, as the case may be.
Such a trust may only be established if, among
other things:
| · | the applicable defeasance or covenant
defeasance does not result in a breach or violation of, or constitute a default under, the
indenture or any other material agreement or instrument to which Ecopetrol is a party or
by which it is bound; and |
| · | Ecopetrol has delivered to the trustee
an opinion of counsel (as specified in the indenture) to the effect that the holders of the
senior debt securities will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of the defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if the defeasance or covenant defeasance had not occurred, and the opinion
of counsel, in the case of defeasance, must refer to and be based upon a letter ruling of
the Internal Revenue Service received by Ecopetrol, a revenue ruling published by the Internal
Revenue Service or a change in applicable U.S. federal income tax law occurring after the
date of the indenture. |
“Government Obligations” means
securities which are:
| · | direct obligations of the United
States of America or the government or the governments in the confederation which issued
the foreign currency in which the senior debt securities of a particular series are payable,
for the payment of which the full faith and credit of the United States or such other government
or governments is pledged; or |
| · | obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States of America
or such other government or governments, the timely payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America or such other government
or governments, |
and which are not callable or redeemable at the
option of the issuer or issuers thereof, and shall also include a depositary receipt issued by a bank or trust company as custodian with
respect to any Government Obligation or a specific payment of interest on or principal of or any other amount with respect to any Government
Obligation held by the custodian for the account of the holder of the depositary receipt; provided that (except as required by law) the
custodian is not authorized to make any deduction from the amount payable to the holder of the depositary receipt from any amount received
by the custodian with respect to the Government Obligation or the specific payment of interest on or principal of or any other amount
with respect to the Government Obligation evidenced by the depositary receipt.
In the event Ecopetrol effects covenant defeasance
with respect to any senior debt securities and the senior debt securities are declared due and payable because of the occurrence of any
event of default other than an Event of Default with respect to the “Limitations on Liens” covenant contained in the indenture
(which sections would no longer be applicable to the senior debt securities after the covenant defeasance) or with respect to any other
covenant as to which there has been covenant defeasance, the amount in the foreign currency in which the senior debt securities are payable,
and Government Obligations on deposit with the trustee, will be sufficient to pay amounts due on the senior debt securities at the time
of the stated maturity but may not be sufficient to pay amounts due on the senior debt securities at the time of the acceleration resulting
from the Event of Default. However, Ecopetrol would remain liable to make payment of the amounts due at the time of acceleration.
Currency Indemnity
Any amount received or recovered by a holder
of a debt security on or under the debt securities or the indenture (whether as a result of, or of the enforcement of, a judgment or
order of a court of any jurisdiction, in the winding-up or dissolution of us or otherwise) in a currency other than U.S. Dollars will
constitute a discharge of Ecopetrol’s obligation only to the extent of the U.S. Dollar amount which such holder is able to purchase
with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable
to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the
U.S. Dollar amount expressed to be due to such holder of a debt security, Ecopetrol will indemnify such holder against any loss sustained
by it as a result; if that U.S. Dollar amount so purchased exceeds the U.S. Dollar amount expressed to be due to the holder of such debt
security, such holder agrees to remit such excess to Ecopetrol. Notwithstanding the foregoing, any payment required to be made by us
under this indemnity will remain subject to the final judgment, order or decree entered by the applicable court of jurisdiction with
respect thereto.
For the purposes of the preceding paragraph,
it will be sufficient for the holder of a debt security to certify in a manner reasonably satisfactory to Ecopetrol (indicating the sources
of information used) that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount so received
in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on
the first date on which it would have been practicable, which date and the reason for such impracticability shall be included in the
certification by the holder of such debt security). These indemnities will constitute a separate and independent obligation from the
other obligations under the indenture and the debt securities, will give rise to a separate and independent cause of action, will apply
irrespective of any indulgence granted by any holder of a debt security and will continue in full force and effect despite any other
judgment or order, for a liquidated amount in respect of any sum due under any debt security.
Governing Law
The indenture and the debt securities will be
governed by, and construed in accordance with, the laws of the State of New York except that the laws of Colombia will govern all matters
relating to authorization and execution of the indenture and the debt securities.
Submission to Jurisdiction; Agent for Service of Process
We will submit, to the fullest extent permitted
by applicable law, to the jurisdiction of any federal or state court in the City of New York, Borough of Manhattan for purposes of all
legal actions and proceedings instituted in connection with the debt securities or the indenture. We have appointed Corporation Service
Company (CSC), 1180 Avenue of the Americas, Suite 210, New York, New York 10036 as our authorized agent upon which service of process
may be served in any such action relating to the debt securities or the indenture.
Regarding the Trustee
The trustee is permitted to engage in other transactions
with Ecopetrol and its subsidiaries from time to time; provided that if the trustee acquires any conflicting interest it must eliminate
the conflict upon the occurrence of an Event of Default, or else resign.
Ecopetrol may at any time remove the trustee
at its office or agency in the City of New York designated for the foregoing purposes and may from time to time rescind such designations.
No Personal Liability of Shareholders, Officers, Directors, or
Employees
The indenture provides that no recourse for the
payment of the principal of, premium, if any, or interest on any of the debt securities or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or agreement of Ecopetrol in such indenture, or in any of the
debt securities or because of the creation of any indebtedness represented thereby, shall be had against any shareholder, officer, director,
employee or controlling person of Ecopetrol or of any successor thereof.
Description of Guaranteed Debt Securities
We will set forth in the applicable prospectus
supplement or other offering materials a description of the guaranteed debt securities which may be offered under this prospectus.
LEGAL MATTERS
Unless otherwise indicated in a supplement to
this prospectus, Shearman & Sterling LLP, our United States counsel, will pass upon the validity under New York law of the securities
and Brigard & Urrutia Abogados S.A.S. will pass upon certain legal matters governed by Colombian law with respect to the securities.
EXPERTS
The consolidated financial statements of Ecopetrol
S.A. (the “Company”) appearing in the Company’s 2020 Annual Report for the years ended December 31, 2020, 2019
and 2018 and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, have been
audited by Ernst & Young Audit S.A.S., independent registered public accounting firm, as set forth in their reports thereon
included therein, and incorporated herein by reference. Such consolidated financial statements and the Company management’s assessment
of the effectiveness of internal control over financial reporting as of December 31, 2020 are, and audited consolidated financial
statements and the Company management’s assessment of internal control over financial reporting to be included in subsequently
filed documents will be, incorporated herein in reliance upon the reports of Ernst & Young Audit S.A.S. pertaining to such consolidated
financial statements and the effectiveness of our internal control over financial reporting as of the respective dates (to the extent
covered by consents filed with the Securities and Exchange Commission) given on the authority of such firm as experts in accounting and
auditing.
The summary reports of DeGolyer and MacNaughton;
Gaffney Cline & Associates; Netherland, Sewell & Associates, Inc.; Ryder Scott Company; and Sproule International
Limited, independent petroleum engineering consultants, referenced in the 2020 Annual Report, which is incorporated by reference herein,
have been referenced in reliance upon the authority of the firms as experts in estimating proved oil and gas reserves.
DOCUMENTS ON DISPLAY
We file reports, including this prospectus, with
the SEC under the Securities Act. The Company will provide to each person, including any beneficial owner, to whom a prospectus is delivered,
a copy of any or all of the information that has been incorporated by reference into the prospectus but not delivered with the prospectus.
Such information will be provided upon written or oral request at no cost to the requester by writing to Ecopetrol, S.A., Carrera 13
No. 36-24, Bogota, Republic of Colombia or by calling (571) 234-4000.
You may read and copy all or any portion of this
registration statement or other information in the SEC’s public reference room at 100 F. Street, NE, Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Any filings we make are also available
to the public over the Internet at the SEC’s website at www.sec.gov and at our website at www.ecopetrol.com.co. (This
URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information
on our website, which might be accessible through a hyperlink resulting from this URL, is not and shall not be deemed to be incorporated
into this registration statement.)
Ecopetrol S.A.
PROSPECTUS
May 28, 2021
ECOPETROL S.A.
US$1,850,000,000 8.375% Notes due 2036
PROSPECTUS SUPPLEMENT
Joint Book-Running Managers
BBVA |
BofA Securities |
Citigroup |
January 9, 2024
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