Ecopetrol (EC) Q3 2026 earnings review
Ecopetrol's refineries earn record profits, but its cash flow shrinks
Ecopetrol, Colombia's state-controlled oil producer and refiner, earned far more from fuel while its own fields produced less. Net profit nearly doubled, because conflict in the Middle East lifted fuel prices and its refineries posted record margins. Cash from operations still fell 11%, since a state fund that holds down pump prices now owes the group COP 11.4 trillion.
| Sales excluding Brava, bought in August | COP 34.0 trillion +14% from a year ago |
|---|---|
| Net profit | COP 4.8 trillion +86% from a year ago |
| Money the state fuel fund owes Ecopetrol | COP 11.4 trillion COP 8.0 trillion in June |
| Full-year production plan | Not updated 730,000–740,000 barrels a day, set earlier |
⚖️ Verdict: 🔴 Bearish
The story got worse, because the record profit did not reach the bank. Chief executive Joaquín Gutiérrez promised stronger free cash flow, yet it dropped 19%. What the fuel fund owes already sits near the top of the range Ecopetrol set for year-end. The good news: the Brava purchase in Brazil closed, and its fields made up for the decline at home.
The question now is whether the government pays what the fuel fund owes. If it pays, high fuel prices turn into cash for debt and dividends; if not, Ecopetrol carries a larger claim on the state into 2027. The year-end balance, due with fourth-quarter results, will tell.
🐂 Bull Case
Refining Earnings Rose Fivefold From a Year Ago
Ecopetrol owns two Colombian refineries, Cartagena and Barrancabermeja. Refining Ebitda, meaning earnings before interest, tax, depreciation and amortisation, reached COP 4.1 trillion against COP 0.8 trillion a year earlier. Ecopetrol called its refining margin of $45.6 a barrel “a quarterly all-time high”.
The group said fuel prices rose on “supply disruptions caused by the conflict in the Middle East” and on attacks on Russian refineries. Its own plants helped too: Cartagena ran at 91% of capacity.
- Cost of sales, the cost of buying and making what it sells: 60% of revenue, down 6.9 percentage points
- Crude and fuel sales: $19 a barrel above Brent, the highest premium since 2015
- Refining share of group Ebitda: 26%, against 6% a year ago
This matters because refining now produces a quarter of group earnings. But prices Ecopetrol does not set produced most of this gain, and they can reverse once Middle East supply returns.
What to watch: the integrated refining margin in the fourth-quarter results, when Barrancabermeja runs at full rate again. If the margin holds up as supply recovers, part of the gain belongs to the refineries rather than to the market.
Brava Purchase Closed and Added Brazilian Oil
Brava Energia is an oil and gas producer in Brazil. Ecopetrol bought 51% of it in August for $1.1 billion and called the deal “a milestone in our portfolio growth and diversification strategy”.
Brava's fields added 38,600 barrels of oil equivalent a day to the quarter's average, though the Colombian group counted them only from August 18. By our math, a full quarter would add about 81,000 barrels a day.
The deal carries a cost. Brava brought COP 12.3 trillion of debt. Ecopetrol also still has to replace a $1.2 billion short-term bank loan with long-term money.
What to watch: the fourth quarter, the first with Brava for three full months, and the terms of that refinancing. Expensive long-term debt would eat into what the Brazilian fields add.
🐻 Bear Case
Profit Rose but Cash From Operations Fell
Chief executive Joaquín Gutiérrez, in the job since September 28, wrote that Ecopetrol will “strengthen free cash flow to support growth and dividends”, meaning the cash left after investment. In the third quarter it moved the other way.
Ebitda, or earnings before interest, tax, depreciation and amortisation, rose 29%, yet cash from operations dropped 11%. The main reason is the Fuel Price Stabilization Fund (FEPC), a state fund that holds pump prices below import prices and owes the group the difference.
- Money the fund owes: COP 11.4 trillion, against COP 8.0 trillion in June
- New amounts in the quarter: COP 4.1 trillion; payments received: COP 0.7 trillion
- Free cash flow: COP 3.1 trillion, down 19% by our math
Last quarter, finance chief Camilo Barco put the year-end balance at COP 8–12 trillion. The third quarter used most of that room, because Brent stayed high. Gutiérrez's promise now depends on Ministry of Finance payments and on pump prices that the government sets.
What to watch: the fund's balance at year-end, due with fourth-quarter results. A figure above COP 12 trillion would mean more of the record profit remains a claim on the state rather than cash.
Output Without Brava Stays Below Last Year
Without Brava, the group produced about 709,000 barrels of oil equivalent a day by our math, 6% below a year ago. Ecopetrol blamed fewer drilling rigs in the US Permian basin for much of the gap.
Gas output also kept falling, so local gas sales dropped 22%. Two tenders to import liquefied gas ended without awards, because the bids did not offer “competitive, profitable transactions with an appropriate risk profile”.
The gas projects behind the positive case did advance: the Sandía-1 offshore well found gas, and the Pacific import terminal is 90% built. Neither adds supply before late November.
What to watch: fourth-quarter output without Brava, after new water treatment plants start at the Llanos fields. A figure near this quarter's level would leave the full-year production plan resting on Brava.
Acting Executives Still Run Many Top Departments
Ecopetrol spent months under temporary leaders. The board ended that at the top: Joaquín Gutiérrez became chief executive on September 28, after shareholders replaced the whole board on September 15.
Turnover below him continued. By our count, acting heads still run seven areas, including refining and commercial affairs, the units behind this quarter's record. So the top job is settled, but the concern only eases.
What to watch: whether Gutiérrez names permanent heads for refining and commercial affairs before the fourth-quarter results. Those appointments would show the new team can carry out the plan he set out.
Risks this quarter didn't answer
Four standing concerns got partial news or none in the third-quarter report. Each item below names the reading that would move it, and none of them changed the overall case this quarter.
- VAT dispute with DIAN, the tax authority: an October 13 ruling means the disputed amounts “are not enforceable” while courts decide; a court ruling or a settlement would move it.
- Pipeline unit: Ebitda fell 16% on a stronger peso and released pipeline capacity; a decision on Ocensa's request for new tariffs would move it.
- Lifting cost, the cost of pumping a barrel: $14.75, against an earlier 2026 aim below $12; a restated target would move it.
- Coral green-hydrogen plant: absent again after a commissioning date of mid-2026; a new date would move it.
👓 Other Themes
War in the Middle East Raised Prices and Freight
Ecopetrol said “tensions in the Middle East” lifted Brent to $91 a barrel. The same conflict raised tanker rates and widened the discount on its crude to $9.1 a barrel from $3.9. The peso also strengthened about 20% against the dollar, so each dollar of sales bought fewer pesos. The company expects tight global gas supply to last through the coming winter.
Brazil Approved Ecopetrol's Plan for the Orca Field
Brazil's oil regulator, ANP, approved the development plan for Orca, an offshore field in the Santos Basin, on August 7. Ecopetrol said Orca could add “more than 33 thousand net barrels per day of light crude production” in its first year, which it expects in 2029. No revenue arrives before then.
💲 Other KPIs
Ebitda margin, the share of sales left as earnings before interest, tax, depreciation and amortisation, widened to 45.3% from 41.3% a year ago. It has stayed above 44% for three quarters. The low point, by our math, came at the end of 2025. Higher prices, not larger volumes, explain the gain.
The oil group paid a larger share of pre-tax profit in tax: 37.7%, against 31.2% a year ago. A wealth tax that companies cannot deduct and a 15% income-tax surcharge, which the law ties to the year-end Brent price, explain the rise. The nine-month rate stands at 37.3%, so the extra charge runs all year.
Spending on the existing business reached $4.77 billion in nine months, with 65% going to oil, gas and fuel. By our math, that is 71% to 88% of this year's plan, which the release did not restate. Third-quarter spending dropped to 14% of sales, so higher prices did not lift the budget.
Ebitda at ISA, the group's power-line and toll-road business, dropped 20% from a year ago. The stronger peso, smaller inflation-linked tariff rises in Brazil and a one-off court gain in 2025 explain the fall. Over nine months the unit is still 4.6% ahead, because new power lines and roads came into service.
🔮 Guidance
New. The plan caps debt at 2.5 times a year of Ebitda. The ratio stood at 2.1 times in September, after the Brava deal. By our math, at the last four quarters' earnings, the group could borrow about COP 23 trillion more before reaching that cap. Lower Brent would shrink the room quickly.
Unchanged. The Buenaventura terminal turns shipped liquefied gas back into pipeline gas, at 60 billion British thermal units a day (GBTUD). It was 90% built at the end of September. An earlier plan had this supply starting in the second quarter of 2026, so the date has already slipped once.
Unchanged. The larger Caribbean terminal should start in February 2027, inside the first-quarter date given earlier; it was 53.5% built. Two tenders to buy shipped gas, for Puerto Bahía and for customers supplied through Buenaventura, ended without awards. Ecopetrol said it keeps studying other supply options.
Unchanged. The Sirius partners aim to file environmental studies for this large offshore gas field and its subsea pipeline in early 2027. Authorities have certified 98% of the 121 communities in the required consultation. The report did not repeat the investment decision date of late 2027.
New. Ecopetrol and its partner AES plan a joint final investment decision on the two wind farms once banks approve the loans. The partners expect that approval in the first quarter of 2027. The farms carry 259 megawatts of assigned peak capacity and a 35-kilometre power line.
❓ Key Questions
Does the production plan count Brava, and how?
The plan of 730,000–740,000 barrels a day predates Brava. By our math, the fourth quarter needs 741,000–781,000. A full quarter of Brava at 100% would deliver it; Ecopetrol's own fields would not.
Will the fuel fund stay below COP 12 trillion?
The balance reached COP 11.4 trillion in September with Brent near $91. Readers need the fourth-quarter accrual, a payment schedule from the Ministry of Finance and any change to pump prices.
How will Ecopetrol refinance the Brava bank loan?
The group drew $1.2 billion on a short-term facility in August. Finance chief Camilo Barco said last quarter he planned a long-term loan or bond before year-end; the cost will show how lenders view the group's debt.
Where will the new import terminals get their gas?
Both tenders to buy shipped liquefied gas ended without awards. The Pacific terminal starts in late November, so Ecopetrol needs a supplier within weeks or the terminal may run below capacity.
Does the lifting-cost aim below $12 still stand?
Lifting cost reached $14.75 a barrel, mostly because the peso strengthened. The company now stresses the peso figure, which fell 3.4%, and has not said whether the dollar aim for 2026 still applies.