S&P maintains Ecopetrol's global credit rating at BB+

Rhea-AI Summary

S&P Global Ratings has maintained Ecopetrol's (NYSE: EC) global credit rating at BB+ with a negative outlook, while downgrading its Stand Alone Credit Profile (SACP) from bbb- to bb+. The rating agency cited lower oil prices and exchange rate volatility as factors impacting the company's financial performance, with debt/EBITDA ratio expected to remain above 2.0. Despite these challenges, S&P positively acknowledged Ecopetrol's strategy focused on growth, reserve replenishment, and portfolio diversification. Ecopetrol, Colombia's largest company, maintains dominant positions in hydrocarbon production, logistics, and refining, controlling over 60% of these operations in Colombia. The company has expanded internationally through its 51.4% stake in ISA and operations in strategic basins across the Americas.

Positive

• S&P maintained BB+ global credit rating despite challenging conditions
• Company holds dominant market position with 60% control of Colombian hydrocarbon operations
• Strategic diversification through ISA acquisition provides additional revenue streams
• Strong international presence in strategic basins across the Americas

Negative

• Stand Alone Credit Profile (SACP) downgraded from bbb- to bb+
• Negative outlook maintained by S&P
• Debt/EBITDA ratio remains elevated above 2.0
• Financial performance impacted by lower oil prices and exchange rate volatility

Insights

Financial Rating Analyst

S&P kept Ecopetrol's BB+ rating but lowered standalone profile amid financial pressure from oil prices and currency volatility.

The maintenance of Ecopetrol's BB+ rating with a negative outlook, coupled with the downgrade of its Stand Alone Credit Profile (SACP) from bbb- to bb+, signals mixed implications for the Colombian energy giant. This SACP reduction represents a downgrade from investment-grade to non-investment-grade on a standalone basis—a significant shift in S&P's assessment of the company's intrinsic creditworthiness.

S&P cited lower oil prices and exchange rate volatility as key factors impacting financial performance, projecting that Ecopetrol's debt/EBITDA ratio would remain above 2.0. This elevated leverage metric is concerning for an integrated energy company operating in volatile commodity markets and suggests constrained financial flexibility.

Notably, with the SACP now matching the overall rating, S&P appears to have eliminated any uplift previously attributed to government support in their assessment. For context, Ecopetrol's BB+ rating sits just one notch below investment grade (BBB-), and the persistent negative outlook indicates a meaningful probability of downgrade within the next 12-24 months under S&P's methodology.

On the positive side, S&P acknowledged the company's strategic focus on growth prospects, reserve replenishment, and portfolio diversification. As Colombia's largest company controlling over 60% of hydrocarbon production, Ecopetrol maintains dominant market positioning. The 2021 acquisition of 51.4% of ISA has diversified operations into energy transmission and infrastructure, potentially providing more stable cash flows to balance volatile oil and gas revenues.

The maintained overall rating provides near-term stability, but the negative outlook and reduced standalone assessment signal caution regarding Ecopetrol's financial trajectory in a challenging commodity environment.

BOGOTA, Colombia, June 5, 2025 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC, the "Company") informs that S&P Global Ratings maintained the Company's global credit rating at BB+ as well as its negative outlook, as reported today, June 4, 2025. Additionally, the agency lowered the Company's Stand Alone Credit Profile (SACP) rating from bbb- to bb+.

S&P mentioned that lower oil prices and exchange rate volatility have impacted the Company's financial performance during the last year, and it estimated that Ecopetrol's debt/EBITDA ratio would remain at a level above 2.0.

The rating agency positively highlighted the Company's strategy, focused on growth prospects, reserve replenishment, and strengthening of the investment portfolio through business diversification and profitability margins.

The assessment of the aforementioned factors, as well as other considerations included in the report supported an individual rating that is at the same level of the Company's overall rating.

The full report issued by S&P, including the detailed rating rationale, can be found below:

Ecopetrol is the largest company in Colombia and one of the main integrated energy companies in the American continent, with more than 19,000 employees. In Colombia, it is responsible for more than 60% of the hydrocarbon production of most transportation, logistics, and hydrocarbon refining systems, and it holds leading positions in the petrochemicals and gas distribution segments. With the acquisition of 51.4% of ISA's shares, the company participates in energy transmission, the management of real-time systems (XM), and the Barranquilla - Cartagena coastal highway concession. At the international level, Ecopetrol has a stake in strategic basins in the American continent, with Drilling and Exploration operations in the United States (Permian basin and the Gulf of Mexico), Brazil, and Mexico, and, through ISA and its subsidiaries, Ecopetrol holds leading positions in the power transmission business in Brazil, Chile, Peru, and Bolivia, road concessions in Chile, and the telecommunications sector. 

This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All forward-looking statements, whether made in this release or in future filings or press releases, or orally, address matters that involve risks and uncertainties, including in respect of the Company's prospects for growth and its ongoing access to capital to fund the Company's business plan, among others. Consequently, changes in the following factors, among others, could cause actual results to differ materially from those included in the forward-looking statements: market prices of oil & gas, our exploration, and production activities, market conditions, applicable regulations, the exchange rate, the Company's competitiveness and the performance of Colombia's economy and industry, to mention a few. We do not intend and do not assume any obligation to update these forward-looking statements. 

For more information, please contact: 

Head of Capital Markets 
Carolina Tovar Aragón 
Email: investors@ecopetrol.com.co 

Head of Corporate Communications (Colombia) 
Marcela Ulloa 
Email: marcela.ulloa@ecopetrol.com.co

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SOURCE Ecopetrol S.A.

FAQ

What is Ecopetrol's (EC) current credit rating from S&P Global Ratings?

S&P Global Ratings maintained Ecopetrol's global credit rating at BB+ with a negative outlook

Why did S&P downgrade Ecopetrol's Stand Alone Credit Profile (SACP)?

The downgrade from bbb- to bb+ was due to lower oil prices and exchange rate volatility impacting financial performance, with debt/EBITDA ratio expected to remain above 2.0

What percentage of Colombian hydrocarbon production does Ecopetrol control?

Ecopetrol is responsible for more than 60% of hydrocarbon production, transportation, logistics, and refining systems in Colombia

What international operations does Ecopetrol (EC) have?

Ecopetrol operates in the US Permian basin and Gulf of Mexico, Brazil, and Mexico, plus has presence in power transmission in Brazil, Chile, Peru, and Bolivia through ISA

What is Ecopetrol's ownership stake in ISA?

Ecopetrol owns 51.4% of ISA's shares