As filed with the Securities and Exchange
Commission on May 30, 2017










UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington, D.C. 20549










FORM 20-F

ANNUAL REPORT PURSUANT TO

SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934










For the fiscal year ended December 31,
2016



Commission
file number: 001-34175



ECOPETROL
S.A.

(Exact
name of Registrant as specified in its charter)










N/A

(Translation of Registrant’s name
into English)










REPUBLIC OF COLOMBIA

(Jurisdiction of incorporation or organization)










Carrera 13 No. 36 – 24

BOGOTA – COLOMBIA

(Address of principal executive offices)

Tel. (571) 234 4000










Andrés Felipe Sánchez



Investor Relations Officer

investors@ecopetrol.com.co

Tel. (571) 234 5190

Carrera 13 N.36-24 Piso 5

Bogota, Colombia

(Name, Telephone, E-Mail and/or Facsimile
number and Address of Company Contact Person)



Securities registered or to be registered
pursuant to Section 12(b) of the Act.










|Title of each class                                                                                                                           |  | Name of each exchange on which registered:         
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------
|American Depository Shares (as evidenced by American Depository Receipts), each
    representing 20 common shares par value COP$609 per share |  | New York Stock Exchange                            
|Ecopetrol common shares par value COP$609 per share                                                                                           |  | New York Stock Exchange (for listing purposes only)
|7.625% Notes due 2019                                                                                                                         |  | New York Stock Exchange                            
|4.250% Notes due 2018                                                                                                                         |  | New York Stock Exchange                            
|5.875% Notes due 2023                                                                                                                         |  | New York Stock Exchange                            











|Title of each class   |  | Name of each exchange on which registered:
|--------------------- |  | ------------------------------------------
|4.125% Notes due 2025 |  | New York Stock Exchange                   
|5.375% Notes due 2026 |  | New York Stock Exchange                   
|7.375% Notes due 2043 |  | New York Stock Exchange                   
|5.875% Notes due 2045 |  | New York Stock Exchange                   
|                      |  |                                           



Securities registered or to be registered
pursuant to Section 12(g) of the Act: None



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None



Indicate the number of outstanding shares
of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.



41,116,694,690 Ecopetrol common shares,
par value COP$609 per share



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.



x
Yes  ̈ No



If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.



 ̈
Yes x No



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.



x
Yes  ̈ No



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).



N/A



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and
large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):



|Large accelerated filer x |  | Accelerated filer  ̈ |  | Non-accelerated filer  ̈ |  | Emerging growth company  ̈
|------------------------- |  | ------------------- |  | ----------------------- |  | -------------------------





If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
☐



† The term “new or revised financial accounting
standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.





Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:



| ̈ U.S. GAAP |  | x International Financial Reporting Standards as issued by the
International Accounting Standards Board |  |  ̈ Other
|----------- |  | ------------------------------------------------------------------------------------------------------- |  | -------



If “Other” has been checked
in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:



 ̈
Item 17  ̈ Item 18



If this is an annual report, indicate by
check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).



 ̈
Yes x No











Annual Report on Form 20-F 2016



|1. | Introduction                 | 1                                    
|-- | ---------------------------- | -------------------------------------
|   |                              |                                      
|   | 1.1                          | About This Report                    
|   |                              |                                      
|   | 1.2                          | Forward-looking Statements           
|   |                              |                                      
|   | 1.3                          | Selected Financial and Operating Data
|   |                              |                                      
|2. | Strategy and Market Overview | 4                                    
|   |                              |                                      
|   | 2.1                          | Our Corporate Strategy               
|   |                              |                                      
|3. | Business Overview            | 6                                    
|   |                              |                                      
|   | 3.1                          | Our History                          
|   |                              |                                      
|   | 3.2                          | Our Corporate Structure              
|   |                              |                                      
|   | 3.3                          | Our Business                         
|   |                              |                                      
|   | 3.4                          | Exploration and Production           
|   |                              |                                      
|   |                              | 3.4.1                                
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              | 3.4.2                                
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              | 3.4.3                                
|   |                              |                                      
|   |                              | 3.4.4                                
|   |                              |                                      
|   | 3.5                          | Transportation and Logistics         
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              |                                      
|   |                              | 3.5.2                                



iii









| |     | 3.5.3                                           | Marketing of Transportation Services                | 39                                                          
| | --- | ----------------------------------------------- | --------------------------------------------------- | ------------------------------------------------------------
| |     |                                                 |                                                     |                                                             
| | 3.6 | Refining and Petrochemicals                     | 40                                                 
| |     |                                                 |                                                     |                                                             
| |     | 3.6.1                                           | Refining                                            | 40                                                          
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.6.1.1                                             | Barrancabermeja Refinery                                    
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.6.1.2                                             | Reficar                                                     
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.6.1.3                                             | Polipropileno del Caribe S.A.                               
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.6.1.4                                             | Biofuels                                                    
| |     |                                                 |                                                     |                                                             
| |     | 3.6.2                                           | Marketing and Supply of Refined Products            | 44                                                          
| |     |                                                 |                                                     |                                                             
| | 3.7 | Research and Development; Intellectual Property | 44                                                 
| |     |                                                 |                                                    
| | 3.8 | Applicable Laws and Regulations                 | 44                                                 
| |     |                                                 |                                                     |                                                             
| |     | 3.8.1                                           | Regulation of Exploration and Production Activities | 44                                                          
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.8.1.1                                             | Business Regulation                                         
| |     |                                                 |                                                     |                                                             
| |     |                                                 |                                                     | 3.8.1.1.1.                                                  
| |     |                                                 |                                                     |                                                             
| |     |                                                 |                                                     | 3.8.1.1.2.                                                  
| |     |                                                 |                                                     |                                                             
| |     | 3.8.2                                           | Regulation of Transportation Activities             | 47                                                          
| |     |                                                 |                                                     |                                                             
| |     | 3.8.3                                           | Regulation of Refining and Petrochemical Activities | 48                                                          
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.8.3.1                                             | Regulation of Liquefied Petroleum Gas (LPG) and Liquid Fuels
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.8.3.2                                             | Regulation Concerning Production and Prices                 
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.8.3.3                                             | Regulation of Biofuel and Related Activities                
| |     |                                                 |                                                     |                                                             
| |     | 3.8.4                                           | Regulation of the Natural Gas Market                | 51                                                          
| |     |                                                 |                                                     |                                                             
| | 3.9 | Sustainability Initiatives                      | 52                                                 
| |     |                                                 |                                                     |                                                             
| |     | 3.9.1                                           | HSE                                                 |                                                             
| |     |                                                 |                                                    
| |     |                                                 | 3.9.1.1                                             | Ecopetrol S.A.                                              
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.9.1.2                                             | Cenit                                                       
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.9.1.3                                             | Refinería de Cartagena                                      
| |     |                                                 |                                                     |                                                             
| |     | 3.9.2                                           | Human Rights                                        | 55                                                          
| |     |                                                 |                                                     |                                                             
| |     | 3.9.3                                           | Environmental Sustainability                        | 56                                                          
| |     |                                                 |                                                     |                                                             
| |     |                                                 | 3.9.3.1                                             | Environmental Practices                                     





iv









|   |                  | 3.9.4                                                                                   | Energy Projects                    | 57                                                                
|-- | ---------------- | --------------------------------------------------------------------------------------- | ---------------------------------- | ------------------------------------------------------------------
|   |                  |                                                                                         |                                    |                                                                   
|   | 3.10             | Related Party and Intercompany Transactions                                             | 57                                
|   |                  |                                                                                         |                                   
|   | 3.11             | Insurance                                                                               | 62                                
|   |                  |                                                                                         |                                   
|   | 3.12             | Human Resources/Labor Relations                                                         | 63                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 3.12.1                                                                                  | Employees                          | 63                                                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 3.12.2                                                                                  | Collective Bargaining Arrangements | 64                                                                
|   |                  |                                                                                         |                                    |                                                                   
|4. | Financial Review | 65                                                                                     
|   |                  |                                                                                         |                                   
|   | 4.1              | Factors Affecting Our Operating Results                                                 | 66                                
|   |                  |                                                                                         |                                   
|   | 4.2              | Effect of Taxes, Exchange Rate Variation, Inflation and the Price of Oil on our Results | 67                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 4.2.1                                                                                   | Taxes                              | 67                                                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 4.2.2                                                                                   | Exchange Rate Variation            | 68                                                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 4.2.3                                                                                   | Effects of Inflation               | 69                                                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 4.2.4                                                                                   | Effects of the Price of Oil        | 70                                                                
|   |                  |                                                                                         |                                    |                                                                   
|   | 4.3              | Accounting Policies                                                                     | 70                                
|   |                  |                                                                                         |                                   
|   | 4.4              | Critical Accounting Judgments and Estimates                                             | 70                                
|   |                  |                                                                                         |                                   
|   | 4.5              | Operating Results                                                                       | 70                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  | 4.5.1                                                                                   | Consolidated Results of Operations | 70                                                                
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.1                            | Total Revenues                                                    
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.2                            | Cost of Sales                                                     
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.3                            | Operating Expenses before impairment of non-current assets effects
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.4                            | Impairment of non-current assets                                  
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.5                            | Finance Results, Net                                              
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.6                            | Income Tax                                                        
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.7                            | Net Income (Loss) Attributable to Owners of Ecopetrol             
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.8                            | Segment Performance and Analysis                                  
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.9                            | Exploration and Production Segment Results                        
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.10                           | Transportation and Logistics Segment Results                      
|   |                  |                                                                                         |                                    |                                                                   
|   |                  |                                                                                         | 4.5.1.11                           | Refining and Petrochemicals Segment Results                       



v









|   | 4.6                     | Liquidity and Capital Resources                                             | 84                                                            
|-- | ----------------------- | --------------------------------------------------------------------------- | --------------------------------------------------------------
|   |                         |                                                                             |                                                               
|   |                         | 4.6.1                                                                       | Review of Cash Flows                                          
|   |                         |                                                                             |                                                               
|   |                         | 4.6.2                                                                       | Capital Expenditures                                          
|   |                         |                                                                             |                                                               
|   |                         | 4.6.3                                                                       | Dividends                                                     
|   |                         |                                                                             |                                                               
|   | 4.7                     | Summary of Differences between Internal Reporting (Colombian IFRS and IFRS) | 86                                                            
|   |                         |                                                                             |                                                               
|   | 4.8                     | Financial Indebtedness and Other Contractual Obligations                    | 88                                                            
|   |                         |                                                                             |                                                               
|   | 4.9                     | Off Balance Sheet Arrangements                                              | 89                                                            
|   |                         |                                                                             |                                                               
|   | 4.10                    | Trend Analysis and Sensitivity Analysis                                     | 89                                                            
|   |                         |                                                                             |                                                               
|5. | Risk Review             | 92                                                                         
|   |                         |                                                                             |                                                               
|   | 5.1                     | Risk Factors                                                                | 92                                                            
|   |                         |                                                                             |                                                               
|   |                         | 5.1.1                                                                       | Risks Related to Our Business                                 
|   |                         |                                                                             |                                                               
|   |                         | 5.1.2                                                                       | Risks Related to Colombia’s Political and Regional Environment
|   |                         |                                                                             |                                                               
|   |                         | 5.1.3                                                                       | Legal and Regulatory Risks                                    
|   |                         |                                                                             |                                                               
|   |                         | 5.1.4                                                                       | Risks Related to our ADSs                                     
|   |                         |                                                                             |                                                               
|   |                         | 5.1.5                                                                       | Risks Related to State Ownership                              
|   |                         |                                                                             |                                                               
|   | 5.2                     | Risk Management                                                             | 111                                                           
|   |                         |                                                                             |                                                               
|   |                         | 5.2.1                                                                       | Managing Risk through our Internal Control System             
|   |                         |                                                                             |                                                               
|   |                         | 5.2.2                                                                       | Managing Information Security and Cybersecurity               
|   |                         |                                                                             |                                                               
|   |                         | 5.2.3                                                                       | Managing Financial Risk                                       
|   |                         |                                                                             |                                                               
|   | 5.3                     | Legal Proceedings and Related Matters                                       | 115                                                           
|   |                         |                                                                             |                                                               
|6. | Shareholder Information | 118                                                                        
|   |                         |                                                                             |                                                               
|   | 6.1                     | Shareholders’ General Assembly                                              | 118                                                           
|   |                         |                                                                             |                                                               
|   | 6.2                     | Dividend Policy                                                             | 119                                                           
|   |                         |                                                                             |                                                               
|   | 6.3                     | Market and Market Prices                                                    | 119                                                           
|   |                         |                                                                             |                                                               
|   | 6.4                     | Ecopetrol ADR Program Fees                                                  | 122                                                           
|   |                         |                                                                             |                                                               
|   | 6.5                     | Taxation                                                                    | 123                                                           
|   |                         |                                                                             |                                                               
|   |                         | 6.5.1                                                                       | Colombian Tax Considerations                                  
|   |                         |                                                                             |                                                               
|   |                         | 6.5.2                                                                       | U.S. Federal Income Tax Consequences                          





vi







|    | 6.6                          | Exchange Controls and Limitations                   | 130             
|--- | ---------------------------- | --------------------------------------------------- | ----------------
|    |                              |                                                     |                 
|    | 6.7                          | Exchange Rates                                      | 131             
|    |                              |                                                     |                 
|    | 6.8                          | Major Shareholders                                  | 132             
|    |                              |                                                     |                 
|    | 6.9                          | Enforcement of Civil Liabilities                    | 132             
|    |                              |                                                     |                 
|7.  | Corporate Governance         | 134                                                
|    |                              |                                                     |                 
|    | 7.1                          | Bylaws                                              | 134             
|    |                              |                                                     |                 
|    | 7.2                          | Code of Ethics                                      | 137             
|    |                              |                                                     |                 
|    | 7.3                          | Board of Directors                                  | 138             
|    |                              |                                                     |                 
|    |                              | 7.3.1                                               | Board Practices 
|    |                              |                                                     |                 
|    |                              | 7.3.2                                               | Board Committees
|    |                              |                                                     |                 
|    | 7.4                          | Compliance with NYSE Listing Rules                  | 142             
|    |                              |                                                     |                 
|    | 7.5                          | Management                                          | 143             
|    |                              |                                                     |                 
|    | 7.6                          | Compensation of Directors and Management            | 147             
|    |                              |                                                     |                 
|    | 7.7                          | Share Ownership of Directors and Executive Officers | 147             
|    |                              |                                                     |                 
|    | 7.8                          | Controls and Procedures                             | 147             
|    |                              |                                                     |                 
|8.  | Financial Statements         | 151                                                
|    |                              |                                                    
|9.  | Signature Page               | 152                                                
|    |                              |                                                    
|10. | Exhibits                     | 153                                                
|    |                              |                                                    
|11. | Cross-reference to Form 20-F | 154                                                





vii







| | 1. | Introduction
| | -- | ------------



| | 1.1 | About This Report
| | --- | -----------------



We file our Annual Report on
Form 20-F and other information with the U.S. Securities and Exchange Commission.



We file reports, including annual reports
on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private
issuers. You may read and copy any materials filed with the SEC 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 annual report.)



Unless the context otherwise requires,
the terms “Ecopetrol”, “we”, “us”, “our” or the “Company” are used
in this annual report to refer to Ecopetrol S.A. and its subsidiaries on a consolidated basis.



References to the Nation in this annual
report relate to the Republic of Colombia (“Colombia”), our controlling shareholder. References made to the Colombian
government or the Government correspond to the executive branch including the President of Colombia, the ministries and other governmental
agencies responsible for regulating our business.



| | 1.2 | Forward-looking Statements
| | --- | --------------------------



This annual report on Form 20-F contains
forward-looking statements 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;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | · | competition;
| | - | ------------



| | · | our ability to obtain financing;
| | - | --------------------------------



| | · | our ability to find, acquire or gain access to additional reserves and our ability to develop existing
reserves;
| | - | ----------------------------------------------------------------------------------------------------------------



1







| | · | 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, 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 Section 5.1 of this document 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 annual report.



| | 1.3 | Selected Financial and Operating Data
| | --- | -------------------------------------



The following table sets forth, for the
periods and at the dates indicated, our selected historical financial and certain key operating data. The selected financial data
has been derived from and should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated
audited financial statements, presented in Colombian Pesos.



Table 1 – Selected Operating
Data



|Operating Information                  |  | 2016 |         |    | 2015 |  |         | 2014 |  |  | 2013    |   |  | 2012 |        
|-------------------------------------- |  | ---- | ------- | -- | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | -------
|Oil and gas production (mboed)         |  |      | 717.9   |    |      |  | 760.7   |      |  |  | 755.4   |   |  |      | 788.2  
|Proved oil and gas reserves (Mmboe)(1) |  |      | 1,598   |    |      |  | 1,849   |      |  |  | 2,084   |   |  |      | 1,972  
|Exploratory Wells(2)                   |  |      | 6       |    |      |  | 5       |      |  |  | 28      |   |  |      | 22     
|Refinery Through-put (bpd)(3)          |  |      | 332,751 |    |      |  | 234,861 |      |  |  | 240,484 |   |  |      | 283,362
|1P Reserves replacement ratio          |  |      | (7      | %) |      |  | 6       | %    |  |  | 146     | % |  |      | 139    



| | (1) | For 2016, 2015 and 2014, proved reserves include natural gas royalties. Data for 2012 and 2013
excludes natural gas royalties. Data for all years excludes crude oil royalties.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Gross exploratory wells.
| | --- | ------------------------



| | (3) | Refinery through-put includes Barrancabermeja, Reficar, Apiay and Orito. Reficar operations were
shut down in March 2014 for the expansion and modernization plan. The new crude unit began start-up process in October 2015. During
2016, Reficar was under stabilization, with full operation in July 2016.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Financial Information



International Financial Reporting Standards
(“IFRS”)



(Expressed in millions of Colombian Pesos,
except for the net income per share and net operating income per share, which are expressed in Colombian Pesos)



Table 2 – Selected Financial
Data



|Financial Information                                      |  | 2016 |                |  | 2015 | 
|---------------------------------------------------------- |  | ---- | -------------- |  | ---- | 
|Revenue                                                    |  |      | 48,485,561     |  |      | 
|Operating income                                           |  |      | 8,904,548      |  |      | 
|Net income (loss) attributable to Ecopetrol’s shareholders |  |      | 2,447,881      |  |      | 
|Net operating income per share                             |  |      | 217            |  |      | 
|Weighted average number of shares outstanding              |  |      | 41,116,694,690 |  |      | 
|Earnings(loss) per share (basic and diluted)               |  |      | 59.5           |  |      | 
|Total assets                                               |  |      | 120,437,924    |  |      | 





|Financial Information          |  | 2016 |                |  | 2015 | 
|------------------------------ |  | ---- | -------------- |  | ---- | 
|Total equity                   |  |      | 43,560,501     |  |      | 
|Subscribed and paid-in capital |  |      | 25,040,067     |  |      | 
|Number of common shares        |  |      | 41,116,694,690 |  |      | 
|Dividends declared per share   |  |      | 23             |  |      | 
|Total liabilities              |  |      | 76,877,423     |  |      | 



2







Our consolidated financial statements for
the years ended December 31, 2014, 2015 and 2016 were prepared in accordance with IFRS as issued by IASB. References in this
annual report to IFRS mean IFRS as issued by the IASB. Our date of transition to IFRS was January 1, 2014. Our consolidated
financial statements for the year ended December 31, 2015 were our first set of consolidated financial statements prepared in accordance
with IFRS.



IFRS differs in certain significant aspects
from the current reporting standards as in effect in Colombia (“Colombian IFRS”)), which is the accounting standard
we use for local reporting purposes. As a result, our financial information presented under IFRS is not directly comparable to
our financial information presented under Colombian IFRS. For a description of the differences between Colombian IFRS and IFRS
see section Financial Review—Summary of Differences between Internal Reporting Policies and IFRS.



Our consolidated financial statements were
consolidated line by line and all transactions and balances between subsidiaries have been eliminated. These financial statements
include the financial results of all subsidiary companies controlled, directly or indirectly, by Ecopetrol S.A. See Exhibit 1 –
Consolidated companies, associates and joint ventures, to our consolidated financial statements included in this annual report.



As indicated in paragraphs 9 and 18 of
the International Accounting Standard 27 “Consolidated and Separated Financial Statements” we must present our financial
information on a consolidated basis as if we were a single entity, combining the financial statements of Ecopetrol S.A. and its
subsidiaries line by line, adding assets, liabilities, shareholder’s equity, revenues and expenses of similar nature, removing
the reciprocal items among members of the Ecopetrol Group and recognizing non-controlling interest.  We present our operating
information on a consolidated basis.



The regulations of the SEC do not require
foreign private issuers that prepare their financial statements on the basis of IFRS to reconcile such financial statements
to U.S. GAAP. Accordingly, while we have in the past reconciled our consolidated financial statements prepared in accordance
with Colombian Government Entity GAAP to U.S. GAAP, those reconciliations are no longer presented in our filings before the SEC.
We do continue to provide the disclosure required under the U.S. Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) Topic 932 “Extractive Activities—Oil and Gas” (which we refer to as ASC Topic 932), as this
is required regardless of the basis of accounting on which we prepare our financial statements. Other than as required under ASC
Topic 932, any references to accounting treatments under Colombian Government Entity GAAP or U.S. GAAP relate solely to the application
of Colombian Government Entity GAAP or U.S. GAAP to our historical consolidated financial statements.



In this annual report, references to “US$”
or “U.S. dollars” are to United States dollars and references to “COP$,” “Colombian Peso”
or “Colombian Pesos” are to Colombian Pesos, the Ecopetrol Group’s functional and presentation currency under
which we prepare our consolidated financial statements. This annual report translates certain Colombian Peso amounts into U.S.
dollars at specified rates solely for the convenience of the reader. Unless otherwise indicated, such Colombian Peso amounts have
been translated at the rate of COP$3,053.42 per US$1.00, which corresponds to the Tasa Representativa Promedio del Mercado(TRM), or Average Representative Market Exchange Rate, for 2016. Such conversion should not be construed as a representation
that the Colombian Peso amounts correspond to, or have been or could be converted into, U.S. dollars at that rate or any other
rate. On May 26, 2017, the Representative Market Exchange Rate was COP$2,911.66 per US$1.00.



Certain figures shown in this annual report
have been subject to rounding adjustments and, accordingly, certain totals may therefore not precisely equal the sum of the numbers
presented. In this annual report a billion is equal to one with nine zeros.



3







| | 2. | Strategy and Market Overview
| | -- | ----------------------------



Due to
market imbalances, there was a sharp contraction in crude oil price, particularly in the first quarter of 2016. As demand proved
to sustain itself while producers implemented previously announced capital expenditure reduction decisions that encompassed the
adjustments necessary under the new price environment, the market began its path towards tighter balances (see Graph 1 –
Supply/Demand vs ICE Brent price evolution). Although oil prices have recovered from the lowest prices during the oil crisis, high
levels of uncertainty persist indicating a less than smooth recovery. Nonetheless, the change in OPEC’s stance, announced
at the end of September 2016 and later ratified in early December 2016, towards coordinated production cuts provided a lift that
allowed the ICE Brent price to end the year above US$55 per barrel.



Graph 1 – Supply/Demand Balance
vs ICE Brent Price Evolution







Source: PIRA Energy Group,
World Oil Market Forecast (February 28, 2017)



Although international oil prices and global
demand and supply dynamics are significant factors affecting our business and financial condition, Colombia’s local economic
factors have also influenced and could continue to influence our performance given that we conduct most of our business in Colombia.



The performance of Colombia’s gross
domestic product (GDP) is one of the main drivers of fuel consumption in Colombia. According to the National Administrative Department
of Statistics (DANE for its acronym in Spanish), during 2016 Colombia’s GDP grew 2% in real terms, as compared to 2015. The
industries with the greatest growth rates were financial institutions, insurance, real estate and business services, construction
and manufacturing. On the other hand, the industry with the largest drop in growth was mining. Local sales of liquid fuels (diesel,
gasoline, jet fuel and LPG) increased by 2% mainly due to the increase in sales of gasoline. Gasoline domestic sales were more
competitive than its substitutes due to its price decrease and fewer than expected conversions to natural gas for vehicles (NGV)
in Colombia.



In 2016, there were no major changes in
natural gas regulation. With respect to natural gas supply, in November 2016, a new regasification plant located in Cartagena became
available, meaning that Colombia is now connected to the international LNG market and LNG prices will be a reference for national
gas prices.



4







| | 2.1 | Our Corporate Strategy
| | --- | ----------------------



The low oil price environment present
at the end of 2015 and the beginning of 2016 led to a revision of our business plan 2015-2020, originally launched in May
2015, with a price scenario of US$80 per barrel. Our new 2017-2020 business plan is focused on value generation,
profitability and financial sustainability under a price scenario of US$50 per barrel, and allows for considerable upsides in
case of potential price increases. For example, if prices were to increase to an average price of US$70 per barrel,
production by 2020 could reach 830 thousand barrels equivalent per day, or 16% over the current production.



The three pillars of the plan are: (i)
cash flow focus and cost efficiency, (ii) strict capital discipline and (iii) profitable reserves and production growth.



Cash flow focus and cost efficiency:
In 2015, we launched the 2015-2020 Transformation Program (the “Transformation Program”) with a goal of increasing
our efficiency and decreasing cost. The Transformation Program has allowed us to decrease structural costs by US$1.5 billion compared
to 2014. Such reduction has been accomplished due to the implementation of initiatives through our different business segments
and corporate areas. The new business plan entails a second phase of the Transformation Program, with activities aimed to achieve
excellence in project planning and execution as well as in our production, transportation, refining and marketing operations.



Capital discipline: We have preserved
a rigorous level of capital discipline through the adjustment of investments and the adoption of strict controls to ensure that
projects are delivered efficiently and within the expected time frame and budget. The plan calls for investments of approximately
US$13 billion between 2017 and 2020. By 2020, approximately 90% of this investment will be allocated to the development of exploration
and production projects, while investments in transportation and refining will seek to improve operational integrity and reliability.



As part of capital discipline, Ecopetrol
is currently engaged in the divestment of non-strategic assets and the sale of minor fields, and has also defined a dividend policy
as described in Section 6.2 Dividend Policy.



Profitable growth in production and
exploration: One of the pillars of the revised business plan is the view that a strong production portfolio and a greater exploratory
success will bring about profitable growth. Under a price scenario of US$50 per barrel, production should average 760 thousand
barrels of oil equivalent per day by 2020, an approximately 6% growth from 2016. Approximately 94% of this production will come
from the current producing assets.



In exploration, the plan estimates the
incorporation of approximately 1,000 million barrels of contingent resources. In respect of adding reserves, we highlight the results
of the exploratory campaigns in the Colombian Caribbean offshore and the Gulf of Mexico in the United States. During the period
2017 – 2020, Ecopetrol expects to add 600 million barrels of proven reserves from current fields and exploration.



Consistent with the business plan update,
in November 2016, the board of directors of Ecopetrol (“Board of Directors”) approved a US$3.5 billion investment plan
for 2017. The Ecopetrol Group will continue to produce an average of about 715 thousand barrels of oil equivalent per day during
2017. This production level lays the foundation for Ecopetrol’s expected increase in production by 2020.



Most of the investment will be in exploration
and production. In refining, petrochemicals and biofuels, and transportation and logistics, investments will be made to comply
with integrity and operational requirements as well as project completion. The table below sets forth the details of the investment
plan per business segment.



Table 3 – 2017 Investment Plan



|Business Segment                       |  | Millions of US$(1) |       |  | % Percentage | 
|-------------------------------------- |  | ------------------ | ----- |  | ------------ | 
|Exploration                            |  |                    | 650   |  |              | 
|Production                             |  |                    | 2,200 |  |              | 
|Transportation and Logistics           |  |                    | 265   |  |              | 
|Refining, Petrochemicals, and Biofuels |  |                    | 360   |  |              | 
|Others                                 |  |                    | 25    |  |              | 
|TOTAL                                  |  |                    | 3,500 |  |              | 



| | (1) | Rounded figures.
| | --- | ----------------



5







Exploration



In the exploration segment, US$650 million
will be allocated mainly to the evaluation and appraisal of discoveries and ongoing exploration efforts of Ecopetrol S.A. (approximately
US$460 million), Hocol S.A. (“Hocol”) (approximately US$114 million), Ecopetrol America Inc. (approximately US$11 million),
Ecopetrol Costa Afuera (approximately US$44 million) and Ecopetrol Brazil (approximately US$21 million).



Production



In the production segment, US$1,977 million
will be allocated mainly to the execution of development and incremental production projects in the Castilla, Rubiales, Yarigui-Cantagallo,
La Cira - Infantas, Tibú, Piedemonte, Chichimene, Quifa, Provincia and Cusiana-Cupiagua fields (approximately US$1,147 million).
We have also allocated funds for our affiliates and subsidiaries as follows: US$64 million for the operation and maintenance of
fields of Ecopetrol America Inc. in the U.S. Gulf of Mexico, US$88 million to Hocol, US$63 million to Equion and US$8 million to
Savia.



Transportation and logistics



In the transportation and logistics segment,
US$138 million will be allocated to investments focused on the completion of projects such as San Fernando-Monterrey and transportation
of heavy crude oils as well as crude oil dilution projects. The segment is seeking a higher efficiency in operations and maintenance
practices.



Refining, petrochemicals, and
biofuels



In the refining, petrochemicals, and biofuels
segment, US$105 million will be allocated to Reficar, US$150 million to programs to improve operations at the Barrancabermeja Refinery
through initiatives aimed to increase revenues, improve efficiency and reduce operational costs and US$82 million to Bioenergy.
The segment is seeking a higher efficiency in operations and maintenance practices. It is important to highlight that the Barrancabermeja
Refinery modernization plan will continue to be delayed until the oil price environment allows investments to be made in such a
major project. The mode of execution will be defined in this context, after analyzing alternatives which include a modular option
in time and investment.



| | 3. | Business Overview
| | -- | -----------------



| | 3.1 | Our History
| | --- | -----------



We were formed in 1951 by the Colombian
government as Empresa Colombiana de Petróleos and began operating the crude oil fields at La Cira-Infantas, the oldest Colombian
oil field whose production started in 1918, and the pipeline that connected that field with the Barrancabermeja Refinery and the
port of Cartagena. In 1961, we assumed the direct operation of the Barrancabermeja Refinery and continued its transformation into
an industrial complex. In 1974, we acquired the Cartagena Refinery, which had been in operation since 1957. Pursuant to Decree
0062 of 1970, we were transformed into a governmental industrial and commercial company.



In 2003 pursuant to Decree Law 1760, the
Agencia Nacional de Hidrocarburos - National Hydrocarbons Agency (the “ANH”) was created and Ecopetrol ́s public
role as administrator and regulator of the national hydrocarbons resources was transferred to the ANH. Ecopetrol modified its organic
structure and became Ecopetrol S.A., a public stock-holding corporation, one hundred percent state-owned, and continued the development
of exploration and production activities in a competitive basis with autonomy over our business decisions. Since 2006, according
to Law 1118, we have been evolving from a wholly state-owned entity to a mixed-economy company with private capital. This process
has resulted in a substantial change in the legal framework to which we are subject and in the nature of our relationship with
the Nation. We carried out our initial public offering in November 2007 when our common shares became listed on the Colombian Stock
Exchange. Our American Depository Shares (“ADSs”) were listed on the New York Stock Exchange in 2008. Starting in August
2010, our ADSs began trading on the Toronto Stock Exchange (“TSX”) under the symbol “ECP.” On February
17, 2016, we announced our application for voluntary delisting from the TSX. On March 2, 2016, our ADR ́s were officially
delisted from the TSX.



6







| | 3.2 | Our Corporate Structure
| | --- | -----------------------



We operate in the following business segments:
i) Exploration and Production; ii) Transportation and Logistics; iii) Refining, Petrochemicals, and Biofuels.



Our subsidiaries Refinería de Cartagena
(Reficar), Cenit and Ocensa are significant subsidiaries as such term is defined under SEC Regulation S-X.



We have a number of directly and indirectly
held subsidiaries both in Colombia and abroad. Our subsidiaries are either directly owned by us or indirectly owned by us through
one or more of our other subsidiaries. As of March 31, 2017, we have eight directly owned and 20 indirectly owned subsidiaries.



During 2016, the following changes were
made to the Ecopetrol Group’s structure:



| | · | In January 2016, we organized a new wholly-owned subsidiary, Ecopetrol Costa Afuera Colombia S.A.S.,
which will be responsible for offshore exploration and production activities in Colombia. The new subsidiary seeks to develop offshore
activities in Colombia, which the Company currently carries out as operator and non-operator, and take advantage of the benefits
of Decree 2682/14, pursuant to which the conditions and requirements are established for declaring the existence of permanent offshore
free trade zones.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Polipropileno del Caribe S.A. (Propilco), a wholly owned subsidiary,
incorporated Esenttia Resinas del Peru S.A.C in Peru. This new company is wholly indirectly owned by Ecopetrol S.A. For Propilco,
the creation of this new company represents an opportunity to strengthen the company’s commercial strategy in Peru.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The process of reorganizing Ecopetrol S.A.’s indirect participation
in Oleoducto de Colombia S.A. (“ODC”) (held through Equion Energia Limited) was successfully completed. As a result
of this reorganization, Equion transferred 100% of the shares issued by Sento S.A.S. (“Sento”) to Cenit S.A.S.(“Cenit”),
and consequently Sento S.A.S. became the holder of 7.43% of the outstanding capital stock in ODC. However, this restructuring had
no impact on our consolidated financial statements.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In January 2017, the merger by absorption between Sento and Cenit was completed, with the latter
being the absorbing company as of January 6, 2017. As a result, Cenit is now the direct holder of a 51.28% equity interest in the
outstanding capital stock of ODC. However, this restructuring had no impact on our consolidated financial
statements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Exhibit 8.1 to this annual report identifies
our principal operating subsidiaries, their respective countries of incorporation, and our percentage ownership in each (both directly
and indirectly through other subsidiaries), in each case as of March 31, 2017.



7







Graph 2 – Ecopetrol Corporate
Structure







The stock ownership percentage listed refers
to Ecopetrol S.A.’s direct and indirect participation. The data in this structure shows neither the whole ownership nor its
decimal figures, so they will be used only for information purposes.



The so-called shareholding (Ecopetrol S.A.’s
direct participation), affiliated, subsidiary companies are listed, as well as the stock interest of Ecopetrol S.A.’s subordinate
companies.



We are in the process of selling some of
our non-core shareholdings:



| | · | We currently own 0.31% of the total outstanding shares of Empresa de Energía de Bogotá.
As approved by Decrees 2305 of November 13, 2014 and 2110 of December 22, 2016, we are authorized to offer our remaining 0.31%
of total outstanding shares of Empresa de Energía de Bogotá to the general public using the most appropriate mechanism
for the volume and value of the remaining shares. The first stage of the divestment plan took place during the second quarter of
2015, in which we placed 352,872,414 shares at COP$1,740 per share. In 2016, Ecopetrol placed 249,760,551 ordinary shares of Empresa
de Energía de Bogotá at COP$1,815 per share. The operation was executed in accordance with the procedures defined
by the Law 226 of 1995 and the Decree 2305 of November 13, 2014. On December 22, 2016, the Colombian Government issued Decree 2110
extending the duration of the divestment program until December 31, 2017.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In 2016, Ecopetrol completed the divestment of its stake in Interconexión
                                                                                                               Eléctrica S.A. E.S.P. ISA for a total of COP$513 billion. The operation was carried out in accordance with the
                                                                                                               procedures defined by the Law 226 of 1995 and the Decree 1800 of September 9, 2015.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We currently own 100% of the total outstanding shares of Propilco. On January 27, 2016, the Board
of Directors of Ecopetrol approved the commencement of a divestment plan to sell Ecopetrol’s shares in Propilco. On June
13, 2016, the divestment program was approved by the Council of Ministers of Colombia. The next step in the process is the issuance
of a Decree with the final approval to begin the divestiture process under Law 226 of 1995, which has not yet been provided and
therefore we are not yet accounting this as a discontinued operation.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | · | On November 25 of 2016, Ecopetrol conducted an auction to divest 20 non-core producing and non-producing
assets. As a result of the bidding process, Ecopetrol received offers for US$53.4 million in six non-core assets, out of which
three are currently producing 1.8 mbod and the rest are not in operation.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



8







| | 3.3 | Our Business
| | --- | ------------



We are a vertically integrated oil
company with a presence primarily in Colombia and with activities in Peru, Brazil and the U.S. Gulf Coast. The Nation
currently controls 88.49% of our voting capital stock. We are among the top 36 oil and gas companies in the world based on
the Petroleum Intelligence Weekly Top 50 Ranking - 2016. We play a key role in the local hydrocarbon market.



| | 3.4 | Exploration and Production
| | --- | --------------------------



Our exploration and production business
segment includes exploration, development and production activities in Colombia and abroad. We began local exploration in 1955
and international exploration in 2006. We conduct exploration and production activities directly in Ecopetrol S.A., through some
of our subsidiaries, and through joint ventures with third parties. As of December 31, 2016, we were the largest operator
and the largest producer of crude oil and natural gas in Colombia, maintaining the largest acreage exploration position in Colombia.



| | 3.4.1 | Exploration Activities
| | ----- | ----------------------



Ecopetrol is planning to incorporate about
1 billion barrels of contingent resources by 2020, through exploration activities in the following areas: (i) offshore Colombia,
(ii) near field exploration in Colombia, (iii) consolidation of exploration areas outside of Colombia, such as the Gulf of Mexico,
Brazil and other areas in America.



During 2016 our exploration activities
focused in three work fronts: onshore Colombia, Colombia and the US Gulf of Mexico offshore and near field exploration in Colombia.



On January15, 2016 Hocol Petroleum Limited
- HPL, subsidiary of Ecopetrol S.A. and owned 100% by Ecopetrol, constituted and registered before the Chamber of Commerce in Colombia
the company Ecopetrol Offshore (“Ecopetrol Costa Afuera”or “ECAS”). ECAS and Hocol S.A. are subsidiaries
of HPL.



ECAS ́ purpose is to develop oil and
gas activities in offshore Colombia by taking advantage of offshore free trade zones regime. These activities include exploration,
exploitation, production, transport, distribution, export, sales and commercialization of oil and gas and any other hydrocarbon
products or derivatives.



During 2016 bidding rounds were not launched
by the National Hydrocarbons Agency to offer licenses for exploratory activities in Colombia.



Ecopetrol signed farmout agreements with
the following companies: Parex Resouces Colombia Ltd (acquired 50% of the working interest in Convenio Playón and 50%
of the working interest in Convenio de Mares), Talisman Colombia Oil & Gas Ltd (acquired 49% of the working interest in Convenio
Upar) and Hupecol Operating Co LLC (acquired 100% of the working interest in CPO-11 E&P Contract).



Additionally, Ecopetrol carried out its
Onshore Round 1-2016 offering working interest in the onshore blocks LLA-38, LLA-39, LLA-52, PUT 13 and VMM-32 located in Colombia.



For purposes of this exploration
section, “we” refers to Ecopetrol S.A., its subsidiaries and partnerships in which Ecopetrol has an interest. Unless
otherwise stated, all figures are given before deductions for royalties.



| | 3.4.1.1 | Exploration Activities in Colombia
| | ------- | ----------------------------------



Currently we have exploration activities
in most of the sedimentary basins in Colombia, in which active oil and gas operations are found.



9







The following map shows the basins where
Ecopetrol has been conducting its main exploration activities.



Graph 3 – Sedimentary Basins
in Colombia







Source: ANH



We conduct exploration activities in Colombia
on our own and through joint ventures with regional and global oil and gas companies.



Seismic



During 2016, two 2D seismic programs were
acquired in Colombia: Cardon (106.5 Km) and Nogal (44 Km).These seismic programs are intended to increase the knowledge of the
Caguan-Putumayo basin.



Additionally, our subsidiary Hocol
S.A. successfully completed the acquisition of 294.9 km2 of 3D seismic in the exploratory blocks GUA2 (213.5
km2) and YDSN1 (81.4 km2) in Middle Magdalena Basin and Llanos Basin, respectively.



Exploratory Wells



During 2016, onshore drilling operations
were started in five wells by Ecopetrol and its subsidiary Hocol S.A. in the Lower Magdalena Basin and Llanos Basin. Additionally
Hocol finalized drilling operations in the Payero well (Piedemonte basin), which started in December 2015 and was operated by Equion.
In terms of offshore Colombia, drilling operations started at the Purple-Angel 1 well (following the discovery announced at the
Kronos-1 well in July 2015) and at the Gorgon-1 prospect. Our joint venture partner Anadarko operates both wells. On March 8, 2017,
we announced the discovery of a gas presence at Purple-Angel 1.





10







The following table sets forth for the
periods indicated, the number of gross and net productive and dry exploratory wells drilled by us and our joint venture partners
and the exploratory wells drilled by third parties pursuant to sole risk contracts with us.



Table 4 – Exploratory Drilling
in Colombia



|                                       |  | For the year ended December 31, |    
|-------------------------------------- |  | ------------------------------- | ---
|                                       |  | 2016                            |    
|                                       |  | (number of wells)               |    
|COLOMBIA                               |  |                                 |    
|Ecopetrol S.A.                         |  |                                 |    
|Gross Exploratory Wells                |  |                                 |    
|Owned and operated by Ecopetrol        |  |                                 |    
|Productive(1)                          |  |                                 | –  
|Dry(2)                                 |  |                                 | 1.0
|Total                                  |  |                                 | 1.0
|Operated by Partner in Joint Venture   |  |                                 |    
|Productive                             |  |                                 | –  
|Dry                                    |  |                                 | –  
|Total                                  |  |                                 | –  
|Operated by Ecopetrol in Joint Venture |  |                                 |    
|Productive                             |  |                                 | –  
|Dry                                    |  |                                 | –  
|Total                                  |  |                                 | –  
|Net Exploratory Wells(3)               |  |                                 |    
|Productive                             |  |                                 | –  
|Dry                                    |  |                                 | 1.0
|Total                                  |  |                                 | 1.0
|Sole Risk                              |  |                                 |    
|Productive                             |  |                                 | –  
|Dry                                    |  |                                 | –  
|Total                                  |  |                                 | –  
|Equion                                 |  |                                 |    
|Gross Exploratory Wells                |  |                                 |    
|Productive                             |  |                                 | –  
|Dry                                    |  |                                 | –  
|Total                                  |  |                                 | –  
|Hocol                                  |  |                                 |    
|Gross Exploratory Wells                |  |                                 |    
|Productive                             |  |                                 | 1.0
|Dry                                    |  |                                 | –  
|Total                                  |  |                                 | 1.0
|Net Exploratory Wells                  |  |                                 |    
|Productive                             |  |                                 | 0.5
|Dry                                    |  |                                 | –  
|Total                                  |  |                                 | 0.5










|(1) | A productive well is an exploratory well that has evidence of hydrocarbons.                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | A dry well or hole is an exploratory well found to be incapable of producing either crude oil or
natural gas in sufficient quantities to justify completion as a crude oil or natural gas well.
|(3) | Net exploratory wells are calculated according to our percentage of ownership in these wells.                                                                                                  



11







Ecopetrol drilled two wells in 2016: (i)
Chimú-1 St-1 well, where Ecopetrol holds a 100% working interest at Caño Sur Block, which was a dry well, and (ii)
Boranda well, in which Ecopetrol holds a 50% working interest and Parex holds the remaining 50% working interest, as block operator.
As of March 30, 2017 we announced that the presence of crude was discovered at this well.



Our subsidiary Hocol S.A. drilled three
wells in 2016: (i) Payero E1 well, located at Niscota Block and operated by Equión. Total holds a 50% working interest,
Repsol holds a 30% working interest and Hocol S.A. holds a 20% working interest, this well was declared temporarily suspended;
(ii) Bullerengue Sur-1 well, located at SSJN1 Block. Hocol S.A. holds a 50% working interest and Lewis Energy holds the remaining
50%, this one is a productive well, and (iii) Pegaso well, located at CPO 16 Block where Hocol S.A. holds a 100% working interest,
this well was under evaluation as of December 31, 2016.



| | 3.4.1.2 | Exploration Activities Outside of Colombia
| | ------- | ------------------------------------------



Our international exploration strategy
is focused on participating in bidding rounds to secure blocks available for exploration and entering into joint ventures with
international and regional oil companies. We believe exploring outside Colombia allows us to diversify our risks and improve the
possibilities of increasing our crude oil and natural gas reserves.



With respect to our seismic data outside
of Colombia, during 2016, our subsidiary Ecopetrol Brasil bought 854 Km2 of seismic data on the Potiguar basin, POT-M-567,
in which Ecopetrol Brasil holds a 100% working interest.



With respect to our exploratory drilling
outside of Colombia, during 2016, we have undertaken deep water exploratory drilling in the U.S. Gulf Coast in association with
our business partners. The following table sets forth information on our exploratory drilling in the years 2016, 2015 and 2014.



12







Table 5 –
Exploratory Drilling Outside Colombia





|                                     |  | For the year ended December 31, |    
|------------------------------------ |  | ------------------------------- | ---
|                                     |  | 2016                            |    
|                                     |  | (number of wells)               |    
|INTERNATIONAL                        |  |                                 |    
|Ecopetrol America Inc.               |  |                                 |    
|Gross Exploratory Wells              |  |                                 |    
|Productive(1)                        |  |                                 | 1.0
|Dry(2)                               |  |                                 | –  
|Total                                |  |                                 | 1.0
|Net Exploratory Wells(3)(4)          |  |                                 |    
|Productive                           |  |                                 | 0.2
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | 0.2
|Ecopetrol Óleo e Gás do Brasil Ltda. |  |                                 |    
|Gross Exploratory Wells              |  |                                 |    
|Productive                           |  |                                 | –  
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | –  
|Net Exploratory Wells                |  |                                 |    
|Productive                           |  |                                 | –  
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | –  
|Ecopetrol Germany                    |  |                                 |    
|Gross Exploratory Wells              |  |                                 |    
|Productive                           |  |                                 | –  
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | –  
|Net Exploratory Wells                |  |                                 |    
|Productive                           |  |                                 | –  
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | –  
|Savia Perú                           |  |                                 |    
|Gross Exploratory Wells              |  |                                 |    
|Productive                           |  |                                 | –  
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | –  
|Net Exploratory Wells                |  |                                 |    
|Productive                           |  |                                 | –  
|Dry                                  |  |                                 | –  
|Total                                |  |                                 | –  








|(1) | A productive well is an exploratory well that has evidence of hydrocarbons.                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | A dry well or hole is an exploratory well found to be incapable of producing either crude oil or
natural gas in sufficient quantities to justify completion as a crude oil or natural gas well.
|(3) | Net exploratory wells are calculated according to our percentage of ownership in these wells.                                                                                                  
|(4) | None of our international wells were dug pursuant to a sole risk contract.                                                                                                                     



As set forth in the table above, in 2016,
our subsidiary Ecopetrol America Inc. drilled in the United States Gulf of Mexico the Warrior exploratory well, in which Ecopetrol
America Inc. holds a 20% working interest and our partners Anadarko (operator) holds a 65% working interest and MCX Gulf of Mexico
LLC holds the remaining 15% working interest. The well was declared productive. This
oil discovery is the result of our new exploratory strategy, which includes partnerships with leading companies to diversify risk,
undertake further exploration activities and increase contingent resources. The Warrior well is the fifth oil discovery of the
Ecopetrol Group in this prosperous oil region and contributes with increasing our contingent resources.



Ecopetrol America Inc. also drilled a successful
appraisal well in Leon discovery (León 2 BP4), operated by Repsol, which holds a 60% working interest. Ecopetrol America
Inc. holds the remaining 40% working interest. The result
of this well adds contingent resources to those initially discovered with the León 1 exploratory well in 2014.



During 2016, Ecopetrol S.A. did not participate
in bidding rounds in the Gulf of Mexico.



With regards to ECP Oil
and Gas Germany GmbH ́s operations in Angola, we reached an agreement with our partners on the terms upon which we will withdraw
from Block 38/11 and Block 39/11. This agreement was sent for approval of the National Concessionaire, Sonangol EP, followed by
the issuance of a decree from the Ministry of Petroleum. We expect the withdrawal process to be concluded by mid-year of 2017.



| | 3.4.2 | Production Activities
| | ----- | ---------------------



Our consolidated average production was
717.9 thousand boepd in 2016, a decrease of approximately 43 thousand boepd as compared to 2015. This decrease is mainly the
result of the natural production decline of our fields and a reduction in the upstream investments during 2016, as a consequence
of the drop in oil prices.



13







The following table summarizes the results
of our oil and gas production activities for the periods indicated:



Table 6 – Ecopetrol Group’s
Oil and Gas Production



|                                    |  | For the year ended December 31, |      
|----------------------------------- |  | ------------------------------- | -----
|                                    |  | 2016                            |      
|                                    |  | Oil                             |      
|                                    |  | (thousand boepd)                |      
|Total production in Colombia(2)     |  |                                 | 582.5
|Total International production(3)   |  |                                 | 9.6  
|Total production of Ecopetrol Group |  |                                 | 592.1








| | (1) | Conversion between mcfpd and boepd is performed at 5,700 mcfpd to 1 boepd.
| | --- | --------------------------------------------------------------------------

| | (2) | Total production in Colombia corresponds to Ecopetrol S.A., Hocol and Equion.
| | --- | -----------------------------------------------------------------------------

| | (3) | Total International production corresponds to Savia Perú and Ecopetrol America Inc.
| | --- | -----------------------------------------------------------------------------------



| | 3.4.2.1 | Production Activities in Colombia
| | ------- | ---------------------------------



| | 3.4.2.1.1. | Ecopetrol S.A.’s Production Activities in Colombia
| | ---------- | --------------------------------------------------



For the year ended December 31, 2016,
Ecopetrol S.A. was the largest participant in the Colombian hydrocarbons industry, accounting for approximately 62% of crude oil
production (according to calculations made by Ecopetrol based on information from the Ministry of Mines and Energy) and approximately
61% of natural gas production (according to calculations made by Ecopetrol based on information from the Ministry of Mines and
Energy). Also during 2016, Ecopetrol S.A. carried out development drilling mainly in the Oriente and Orinoquia regions, drilling
133 development wells; 83 of those through direct operations and 50 through joint ventures.



In terms of operational
structure, Ecopetrol S.A. manages its production operations through a regional organization. Since July 1, 2014, three regional
Vice-Presidencies were created: Central, Orinoquia and Southern. After the company took over the operations of the Rubiales field
in July of 2016, a new Vice-Presidency, the Eastern Region, was incorporated to this scheme. Our operating assets are distributed
in the following regions:



| | · | Central Region: comprising 30 fields with active production in 2016.
| | - | --------------------------------------------------------------------



| | · | Orinoquía Region: comprising 19 fields with active production in 2016.
| | - | ----------------------------------------------------------------------



| | · | Southern Region: comprising 34 fields with active production in 2016.
| | - | ---------------------------------------------------------------------



| | · | Eastern Region: comprising 4 fields with active production in 2016.
| | - | -------------------------------------------------------------------



A fifth Vice-Presidency, the Vice-Presidency
of Associated Operations, is responsible for all of the production activities in which a partner is involved, regardless of the
location of such activities in Colombia. This Vice- Presidency is comprised of 137 fields with active production in 2016.



The map below indicates the locations of
Ecopetrol S.A ́s operations with production information for each of our administrative regions following in the subsequent
paragraphs.



14







Graph 4 – Ecopetrol S.A. Operations
in Colombia







Note:
VAS is the countrywide Vice-presidency.



Crude Oil Production



The average daily production of crude oil
in Colombia by Ecopetrol S.A. (excluding its subsidiaries), was 552.1 mbod in 2016, 34.1 mbod lower than in 2015, which represents
a year-to-year decrease of 6%.



However, it is important to highlight that
since July of 2016 we took over the operations of the Rubiales and Cusiana fields. A plan was set up with more than two years in
advance, which allowed us to successfully transition between operators, without technical, operational or communities’ issues
in any of the two fields. In the case of the Rubiales field, it is important to highlight that we restarted investments in the
asset with new development drilling during the last quarter of the year 2016, which helped us mitigate the production decline observed
during 2015.



The following chart summarizes Ecopetrol
S.A.’s average daily crude oil production in Colombia by Region, prior to deducting royalties, for the periods indicated.



15







Table 7 – Ecopetrol S.A.’s
Average Daily Crude Oil Production in Colombia by Region Vice-Presidency





|                                                                   |  | For the year ended December 31, |      
|------------------------------------------------------------------ |  | ------------------------------- | -----
|                                                                   |  | 2016                            |      
|                                                                   |  | (thousand bpd)                  |      
|Central Region                                                     |  |                                 |      
|1) La Cira – Infantas                                              |  |                                 | 19.1 
|2) Casabe                                                          |  |                                 | 17.8 
|3) Yarigui                                                         |  |                                 | 16.6 
|4) Other                                                           |  |                                 | 21.3 
|Total Central Region                                               |  |                                 | 74.8 
|                                                                   |  |                                 |      
|Orinoquía Region                                                   |  |                                 |      
|1) Castilla                                                        |  |                                 | 121.3
|2) Chichimene                                                      |  |                                 | 74.0 
|3) Cupiagua                                                        |  |                                 | 11.3 
|4) Other                                                           |  |                                 | 18.3 
|Total Orinoquía Region                                             |  |                                 | 224.9
|                                                                   |  |                                 |      
|Eastern Region                                                     |  |                                 |      
|1) Rubiales(1)                                                     |  |                                 | 61.5 
|2) Caño Sur(2)                                                     |  |                                 | 0.4  
|Total Eastern Region                                               |  |                                 | 61.9 
|                                                                   |  |                                 |      
|Southern Region                                                    |  |                                 |      
|1) San Francisco                                                   |  |                                 | 6.5  
|2) Huila Area                                                      |  |                                 | 7.4  
|3) Tello                                                           |  |                                 | 4.4  
|4) Other                                                           |  |                                 | 9.4  
|Total Southern Region                                              |  |                                 | 27.7 
|                                                                   |  |                                 |      
|Associated Operations                                              |  |                                 |      
|1) Rubiales(1)                                                     |  |                                 | 41.4 
|2) Quifa                                                           |  |                                 | 19.6 
|3) Caño Limon                                                      |  |                                 | 23.3 
|4) Cusiana(3)                                                      |  |                                 | 2.6  
|5) Other                                                           |  |                                 | 75.9 
|Total Associated Operations                                        |  |                                 | 162.8
|Total average daily crude oil production Ecopetrol S.A. (Colombia) |  |                                 | 552.1








| | (1) | In the first half of 2016, the Rubiales field was part of the Vice-Presidency of Associated Operations.
Since July 1, 2016, it became a part of the Eastern Region.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | In the first half of 2016, the Caño Sur field was part of the Orinoquia Region. Since July
1, 2016, it became a part of the Eastern Region.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | In the first half of 2016, the Cusiana field was part of the Vice-Presidency of Associated Operations.
Since July 3, 2016, it became a part of the Orinoquia Region.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



Table 8 – Ecopetrol S.A. Production
per Type of Crude



|       |  | 2016  (mbod) |       |  | Year-on-Year ∆
(%) |  |       | 2015  (mbod) |  |  | Year-on-Year ∆ (%) |  |  | 2014 (mbod) |     
|------ |  | ------------ | ----- |  | ------------------ |  | ----- | ------------ |  |  | ------------------ |  |  | ----------- | ----
|Light  |  |              | 44.6  |  |                    |  | (0.0  | )%           |  |  | 44.6               |  |  |             | 0.2 
|Medium |  |              | 161.5 |  |                    |  | (13.7 | )%           |  |  | 187.1              |  |  |             | (5.8
|Heavy  |  |              | 346.0 |  |                    |  | (2.4  | )%           |  |  | 354.5              |  |  |             | 5.3 
|Total  |  |              | 552.1 |  |                    |  | (5.8  | )%           |  |  | 586.2              |  |  |             | 1.1 



Ecopetrol S.A.’s crude oil production
during 2016 consisted of approximately 37% light and medium crudes and 63% heavy crudes. In 2015, approximately 40% of the crude
oil production corresponded to light and medium crudes and 60% to heavy crudes. During 2014, production distribution was approximately
42% of light and medium crudes and 58% of heavy crudes.



Natural Gas Production



In 2016, the average daily production of
natural gas by Ecopetrol S.A. reached 116.0 mboed, including natural gas liquids (“NGLs”), corresponding to a 4% decrease
in comparison to 2015 production.



16







We have three main natural gas production
fields, Guajira, Cusiana and Cupiagua. In the Guajira field, we have partnered with Chevron who operates the field. The development
of Cusiana field had a change in participation, because Tauramena joint venture expired on July 3, 2016. The Tauramena block is
part of the Cusiana unified exploitation plan. As a consequence of the termination of the Tauramena joint venture, Ecopetrol ́s
participation increased from 63.4% to 97.8%, and Ecopetrol assumed the operation of the Cusiana unified exploitation plan. Ecopetrol
S.A. is the operator of the Cupiagua field.



Of our total natural gas production during
the year ended December 31, 2016, approximately 29% was supplied from the Guajira field, 25% from the Cusiana field, 25% from the
Cupiagua field and the remaining 21% from other fields.



The following table sets forth Ecopetrol
S.A.’s average daily natural gas production in Colombia, including NGLs, prior to deducting royalties, for the years ended
on December 31, 2016, 2015 and 2014.



Table 9 – Ecopetrol S.A.’s
Average Daily Natural Gas Production in Colombia



|                                        |  | For the year ended December 31, |       
|--------------------------------------- |  | ------------------------------- | ------
|                                        |  | 2016                            |       
|                                        |  | (thousand boepd)                |       
|COLOMBIA                                |  |                                 |       
|Central Region                          |  |                                 |       
|1) La Cira – Infantas                   |  |                                 | 0.17  
|2) Provincia                            |  |                                 | 3.09  
|3) Yarigui                              |  |                                 | 0.56  
|4) Gibraltar                            |  |                                 | 6.32  
|4) Other                                |  |                                 | 1.60  
|Total Central Region                    |  |                                 | 11.74 
|Orinoquía Region                        |  |                                 |       
|1) Cupiagua                             |  |                                 | 28.72 
|2) Cusiana(1)                           |  |                                 | 15.98 
|2) Other                                |  |                                 | 1.44  
|Total Orinoquía Region                  |  |                                 | 46.14 
|Southern Region                         |  |                                 |       
|1) Huila Area                           |  |                                 | 0.64  
|2) Tello                                |  |                                 | 0.35  
|3) Other                                |  |                                 | 0.03  
|Total Southern Region                   |  |                                 | 1.02  
|Associated Operations                   |  |                                 |       
|1) Guajira                              |  |                                 | 33.34 
|2) Cusiana(1)                           |  |                                 | 12.65 
|3) Other                                |  |                                 | 11.10 
|Total Associated Operations             |  |                                 | 57.09 
|Total Natural Gas Production (Colombia) |  |                                 | 115.99








| | Note: | Conversion between mcfpd and boepd is performed at 5,700 mcfpd to 1 boepd.
| | ----- | --------------------------------------------------------------------------



| | (1) | In the first half of 2016, the Cusiana field was part of the Vice-Presidency of Associated Operations.
Since July 3, 2016, it became a part of the Orinoquia Region.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



Projects to Increase Recovery Factor:



During
2016 Ecopetrol prioritized opportunities within its recovery factor increase program, keeping 18 active pilots in operation and
developing a new additional one. From the current pilots, 12 have already presented an increase in production within the area impacted
by the pilot.



17







Among
the main results of the pilots in 2016, it is important to highlight the positive results of the water flooding pilots in the heavy
crude fields of Castilla and Chichimene. These fields reported a growth in the recovery factor of 5.2% in the pilot area of Chichimene
field and 2.5% in the pilot area of Castilla field. Also in 2016, we continued the evaluation of steam injection pilots in the
Jazmin and Teca projects, with participation from partners, located in the Middle Magdalena Valley, where we also obtained positive
responses in terms of production.



In
the air injection pilot at Chichimene field, a detailed revision of the scope and of the works required was carried out due to
the drop in global oil prices. During 2017, additional works will be completed and it is expected that the start of the injection
will take place in the last quarter of 2017.



Since the beginning of the recovery factor
increase program, we have started 34 recovery pilots, of which 24 have shown positive results in terms of pressure increase and
19 in incremental crude production.



Development Wells



The following table sets forth the number
of gross and net development wells drilled in Colombia, both solely by Ecopetrol S.A. and with its joint ventures that reached
total depth for the years ended December 31, 2016, 2015 and 2014.



Table 10 – Ecopetrol S.A.’s
Gross and Net Development Wells in Colombia



|                                                                   |  | For the year ended December 31, |    
|------------------------------------------------------------------ |  | ------------------------------- | ---
|                                                                   |  | 2016                            |    
|                                                                   |  | (number of wells)               |    
|COLOMBIA                                                           |  |                                 |    
|Central Region                                                     |  |                                 |    
|Gross wells owned and operated by Ecopetrol                        |  |                                 | -  
|Orinoquía Region                                                   |  |                                 |    
|Gross wells owned and operated by Ecopetrol                        |  |                                 | 47 
|Southern Region                                                    |  |                                 |    
|Gross wells owned and operated by Ecopetrol                        |  |                                 | -  
|Eastern Region                                                     |  |                                 |    
|Gross wells owned and operated by Ecopetrol                        |  |                                 | 36 
|Total gross wells owned and operated by Ecopetrol S.A. in Colombia |  |                                 | 83 
|Associated Operations                                              |  |                                 |    
|Gross wells in joint ventures                                      |  |                                 | 50 
|Net wells(1)                                                       |  |                                 | 19 
|Total gross wells in joint ventures Ecopetrol S.A. in Colombia     |  |                                 | 50 
|Total net wells in joint ventures Ecopetrol S.A. in Colombia(1)    |  |                                 | 19 
|Total gross wells Ecopetrol S.A. in Colombia                       |  |                                 | 133
|Total net wells Ecopetrol S.A. in Colombia(1)                      |  |                                 | 102








| | (1) | Net wells correspond to the sum of wells owned and operated by our subsidiaries and their ownership
percentage of wells owned in joint ventures with their partners.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



18







Production
Acreage



The following table sets forth Ecopetrol
S.A.’s developed and undeveloped gross and net acreage of crude oil and natural gas production in Colombia for the year ended
December 31, 2016.



Table 11 – Ecopetrol S.A.’s
Developed and Undeveloped Gross
and Net Acreage of Crude Oil and Natural Gas Production in Colombia



|               |  | Production Acreage as of December 31, 2016 ( acres) |        
|-------------- |  | --------------------------------------------------- | -------
|               |  | Developed                                           |        
|               |  | Gross                                               |        
|Ecopetrol S.A. |  |                                                     | 448,782



Gross and Net Productive Wells



The following table sets forth Ecopetrol
S.A.’s total gross and net productive wells by region as of December 31, 2016.



Table 12 – Ecopetrol S.A.’s
Gross and Net Productive Wells by Region



|                                |  | As of December 31, 2016 (number of wells) |      
|------------------------------- |  | ----------------------------------------- | -----
|                                |  | Crude Oil(1)                              |      
|                                |  | Gross                                     |      
|COLOMBIA                        |  |                                           |      
|Ecopetrol S.A.                  |  |                                           |      
|Central region                  |  |                                           | 2,286
|Orinoquía region                |  |                                           | 952  
|Southern region                 |  |                                           | 583  
|Eastern Region                  |  |                                           | 780  
|Region of Associated Operations |  |                                           | 2,829
|Total (Ecopetrol S.A.)          |  |                                           | 7,430








| | Note: | The above table reflects the productive wells that directly contribute to hydrocarbon production
and therefore excludes wells used for injection, disposal, water abstraction, or other similar activities.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(1) | We consider crude oil wells to be those in which the main operation is oil production, although
many of these wells produce gas associated with oil production that, in some cases, have a commercial purpose.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Natural gas wells are those in which operations are directed only toward the production of commercial
gas.                                                                                                    



| | 3.4.2.1.2. | Ecopetrol S.A.’s Affiliates and Subsidiaries’ Production Activities in Colombia
| | ---------- | -------------------------------------------------------------------------------



Crude Oil Production



The following table sets forth our average
daily crude oil production from Hocol and Equion, prior to deducting royalties, for the periods indicated.



Table 13 – Ecopetrol S.A.’s
Subsidiaries in Colombia Average Daily Crude Oil Production



|                                                                    |  | For the year ended December 31, |     
|------------------------------------------------------------------- |  | ------------------------------- | ----
|                                                                    |  | 2016                            |     
|                                                                    |  | (thousand bpd)                  |     
|Hocol                                                               |  |                                 |     
|Joint venture operation                                             |  |                                 | 2.6 
|Direct operation                                                    |  |                                 | 15.4
|Total Hocol                                                         |  |                                 | 18.0
|Equion                                                              |  |                                 |     
|Joint venture operation                                             |  |                                 | 0.1 
|Direct operation                                                    |  |                                 | 12.3
|Total Equion                                                        |  |                                 | 12.4
|Production Tests                                                    |  |                                 | –   
|Total Average Daily Crude Oil Production (Subsidiaries in Colombia) |  |                                 | 30.4



19







The 15.4% decrease in Hocol’s production
in 2016 as compared to 2015 was mainly due to the temporary closure of the fields Guarrojo, Ortega, Toldado, Toy, Quimbaya and
Puli as a result of community blockages and governmental resolutions (Constitutional Court) which were lifted afterwards.



The 7% increase in Equion’s production
in 2016 as compared to 2015 was mainly due to the start of production of a new well and the increase of three wells previously
drilled as a result of specific interventions.



Natural Gas Production



The following table sets forth our subsidiaries’
average daily natural gas production, prior to deducting royalties, for the periods indicated.



Table 14 – Ecopetrol S.A.’s
Subsidiaries in Colombia Average Daily Natural Gas Production



|                                                        |  | For the year ended December 31, |    
|------------------------------------------------------- |  | ------------------------------- | ---
|                                                        |  | 2016                            |    
|                                                        |  | (thousand boepd)(1)             |    
|Hocol                                                   |  |                                 |    
|Joint venture operation                                 |  |                                 | 0.2
|Direct operation                                        |  |                                 | 0.6
|Total Hocol                                             |  |                                 | 0.8
|Equion                                                  |  |                                 |    
|Joint venture operation                                 |  |                                 | 0.1
|Direct operation                                        |  |                                 | 6.4
|Total Equion                                            |  |                                 | 6.5
|Production Tests                                        |  |                                 | –  
|Total Natural Gas Production (Subsidiaries in Colombia) |  |                                 | 7.3








| | (1) | Conversion between mcfpd and boepd is performed at 5,700
mcfpd to 1 boepd.
| | --- | --------------------------------------------------------------------------



Development Wells



The following table sets forth the number
of gross and net development wells drilled exclusively by our subsidiaries and in their joint ventures in Colombia for the periods
indicated.



Table 15 – Ecopetrol S.A.’s
Subsidiaries in Colombia Gross and Net Development Wells



|                                                 |  | For the year ended December 31, |  
|------------------------------------------------ |  | ------------------------------- | -
|                                                 |  | 2016                            |  
|                                                 |  | (number of wells)               |  
|Hocol                                            |  |                                 |  
|Gross wells owned and operated by Hocol          |  |                                 | 9
|Gross wells in joint ventures                    |  |                                 | –
|Net wells(1)                                     |  |                                 | 9
|Equion                                           |  |                                 |  
|Gross wells owned and operated by Equion(2)      |  |                                 | –
|Gross wells in joint ventures                    |  |                                 | 1
|                                                 |  |                                 |  
|Net wells(1)                                     |  |                                 | –
|Total gross wells owned and operated in Colombia |  |                                 | 9
|Total gross wells in joint ventures in Colombia  |  |                                 | 1
|Total net wells (Subsidiaries in Colombia)       |  |                                 | 9








|(1) | Net wells correspond to the sum of wells owned and operated by our subsidiaries and their ownership
percentage of wells owned in joint ventures with their partners.                                                                                                                                                                                                                   
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Even though for the last three years Equion has operated every well, Equion has not owned any well
100%; rather Equion has drilled wells in joint venture with Ecopetrol. Therefore, after a careful review of the categories, all
Equion data was moved from gross wells owned and operated by Equion to gross wells in joint ventures. However, the number of wells
remains the same.



20







Production Acreage



The following table sets forth our subsidiaries’
developed and undeveloped gross and net acreage of crude oil and natural gas production in Colombia for the year ended December 31,
2016.



Table 16 – Ecopetrol S.A.’s
Subsidiaries in Colombia Developed and Undeveloped Gross and Net Acreage of Crude Oil and Natural Gas Production



|                                 |  | Production acreage as of December 31, 2016 |         
|-------------------------------- |  | ------------------------------------------ | --------
|                                 |  | Developed                                  |         
|                                 |  | Gross                                      |         
|                                 |  | (in acres)                                 |         
|Hocol                            |  |                                            | 18,787.4
|Equion                           |  |                                            | 20,867.4
|Total (Subsidiaries in Colombia) |  |                                            | 39,654.8



Gross and Net Productive Wells



The following table sets forth our subsidiaries’
total gross and net productive wells in Colombia for the year ended December 31, 2016. We consider crude oil wells to be those
in which the main operation is oil production, although many of these wells produce gas associated with oil production that, in
some cases, have a commercial purpose. Natural gas wells are those in which operations are directed only towards production of
commercial gas. Information in the table below reflects productive wells that directly contribute to hydrocarbons production and
therefore excludes wells used for injection, disposal, water abstraction, or other similar activities.



Table 17 – Ecopetrol S.A.’s
Subsidiaries in Colombia Gross and Net Productive Wells



|                                 |  | For the year ended December 31, 2016 |    
|-------------------------------- |  | ------------------------------------ | ---
|                                 |  | Crude Oil                            |    
|                                 |  | Gross                                |    
|                                 |  | (number of wells)                    |    
|Hocol                            |  |                                      | 231
|Equion                           |  |                                      | 22 
|Total (Subsidiaries in Colombia) |  |                                      | 253



21







| | 3.4.2.2 | Production Activities Outside Colombia
| | ------- | --------------------------------------



Crude Oil Production



The following table sets forth our average
daily crude oil production outside Colombia, prior to deducting royalties, for the periods indicated.



Table 18 – Ecopetrol S.A.’s
Subsidiaries Outside Colombia Average Daily Crude Oil Production



|                                                         |  | For the year ended December 31, |    
|-------------------------------------------------------- |  | ------------------------------- | ---
|                                                         |  | 2016                            |    
|                                                         |  | (thousand bpd)                  |    
|Savia Perú                                               |  |                                 | 4.1
|Ecopetrol America Inc.                                   |  |                                 | 5.5
|Total average daily crude oil production (International) |  |                                 | 9.6



Natural Gas Production



The following table sets forth our average
daily natural gas production outside Colombia, prior to deducting royalties, for the periods indicated.



Table 19 – Ecopetrol S.A.’s
Subsidiaries Outside Colombia Average Daily Natural Gas Production



|                                                           |  | For the year ended December 31, |    
|---------------------------------------------------------- |  | ------------------------------- | ---
|                                                           |  | 2016                            |    
|                                                           |  | (thousand boepd)                |    
|Savia Perú                                                 |  |                                 | 1.3
|Ecopetrol America Inc.                                     |  |                                 | 1.2
|Total average daily natural gas production (International) |  |                                 | 2.5



Development Wells



The following table sets forth the number
of gross and net development wells outside Colombia, drilled exclusively by us and in joint ventures for the periods indicated.
Information in the table below reflects productive wells that directly contribute to hydrocarbons production and therefore excludes
wells used for injection, disposal, water abstraction, or other similar activities.



Table 20 – Ecopetrol S.A.’s
Subsidiaries Outside Colombia Gross and Net Development Wells



|                                  |  | For the year ended December 31, |    
|--------------------------------- |  | ------------------------------- | ---
|                                  |  | 2016                            |    
|                                  |  | (number of wells)               |    
|Savia Perú                        |  |                                 |    
|Gross wells                       |  |                                 | -  
|Net wells(1)                      |  |                                 | -  
|Ecopetrol America Inc.            |  |                                 |    
|Gross wells                       |  |                                 | 3  
|Net wells(1)                      |  |                                 | 0.7
|Total gross wells (International) |  |                                 | 3  
|Total net wells (International)   |  |                                 | 0.7








| | (1) | Net wells correspond to the sum of wells entirely owned by us or our subsidiaries and our ownership
percentage of wells owned in joint ventures with our partners.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



22







Production Acreage



The following table sets forth our developed
and undeveloped gross and net acreage of crude oil and natural gas production outside Colombia for the year ended December 31,
2016.



Table 21 – Ecopetrol S.A.’s
Subsidiaries Outside Colombia Developed and Undeveloped Gross and Net Acreage of Crude Oil and Natural Gas Production



|                          |  | Production acreage as of December 31, 2016 |        
|------------------------- |  | ------------------------------------------ | -------
|                          |  | Developed                                  |        
|                          |  | Gross                                      |        
|                          |  | (in acres)                                 |        
|Savia Perú                |  |                                            | 137,246
|Ecopetrol America Inc.(1) |  |                                            | 49,680 
|Total (International)     |  |                                            | 186,926








| | (1) | Production and acreage from Ecopetrol America Inc. is related to the K2, Dalmatian and Gunflint
field blocks in the Gulf of Mexico. For K2, there are four blocks in the production stage. For Dalmatian, there are six blocks,
five of which are held by production. For Gunflint, there are four blocks in production.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Gross and Net Productive Wells



The following table sets forth our total
gross and net productive wells outside Colombia for the year ended December 31, 2016.



Table 22 – Ecopetrol S.A.’s
Subsidiaries Outside Colombia Gross and Net Productive Wells



|                       |  | As of December 31, 2016 |    
|---------------------- |  | ----------------------- | ---
|                       |  | Crude Oil               |    
|                       |  | Gross                   |    
|                       |  | (number of wells)       |    
|INTERNATIONAL          |  |                         |    
|Savia Perú             |  |                         | 639
|Ecopetrol America Inc. |  |                         | 14 
|Total (International)  |  |                         | 653



| | 3.4.2.3 | Marketing of Crude Oil, Natural Gas and Refined Products
| | ------- | --------------------------------------------------------



In 2016, Ecopetrol sold 962.5 mboepd, out
of which 449.7 mbopd represented sales of crude oil (46.7%), 77.8 mboepd natural gas (8.1%) and 435.0 mboepd of fuels and petrochemicals
(45.2%).



Crude Oil Export Sales



Export sales of crude oil in 2016 decreased
by 101 mbopd as compared to 2015 primarily due to the crude Castilla blend and the Vasconia Norte blend being used as part of the
slate for Reficar and therefore not available for exporting activities. Ecopetrol’s crude oil export sales are traded both
in the spot and contract markets, primarily to refiners in the United States, Asia, Europe, Central America and the Caribbean.



The Castilla blend is the principal type
of crude oil for foreign sales, with 330.8 mbopd sold during 2016 (a 74% share of our crude oil basket) followed by the Vasconia
Norte with 32.3 mbopd (an 7% share in our crude oil basket) and the Magdalena blend with 24 mbopd (a 5% share of our crude
oil basket).



A market diversification strategy has allowed
Ecopetrol to shift towards markets where it captures a better value for its crudes. The United States, Europe, Central America
and Caribbean were destinations that showed an increase in our crude oil export volume, from 67% of total export sales in 2015
to 81% of total export sales in 2016. In contrast, other destinations, such as Asia, experienced a decrease in volume mainly due
to: (i) larger supply coming into this market from the Middle East and (ii) more opportunities for Ecopetrol S.A. to sell in the
United States because of the interest of refiners in imported crude.



23







Crude Oil Purchase Contracts



Ecopetrol has signed several crude oil
purchase contracts with third parties and business partners. Ecopetrol also purchases crude oil received by the ANH as royalties
from other producers in Colombia. This oil is processed in Ecopetrol’s refineries or exported. The purchase price corresponds
to export parity based on international market prices, plus a commercial fee.



The term of some of our purchase contracts
is linked to the term of the exploration and production contracts signed with our business partners. Other clauses of the contracts
such as price and place of delivery vary and may be subject to renegotiation during the term of the contract. Certain purchase
contracts not linked to joint venture agreements may be extended and renegotiated by the parties.



The table below sets forth the volumes
of crude oil purchased from our business partners and third parties and volumes of crude oil purchased from the ANH corresponding
to royalties for the years ended December 31, 2016, 2015 and 2014.



Table 23 – Ecopetrol Consolidated
Crude Oil Purchases



|                                       |  | For the year ended December 31, |     
|-------------------------------------- |  | ------------------------------- | ----
|                                       |  | 2016                            |     
|                                       |  | (million barrels)               |     
|Ecopetrol Corporate Group              |  |                                 |     
|Crude oil purchased from the ANH       |  |                                 | 42.9
|Crude oil purchased from third parties |  |                                 | 15.5
|Crude oil imported from third parties  |  |                                 | 22  



Import of Diluents



In 2016, Ecopetrol decreased by 12.3% (7.9
mboepd) the imports of diluents used to allow our heavy crudes to be pumped through pipelines, as compared to 2015, due to an increase
in the viscosity specifications in the transport of heavy crude oil.



Natural Gas Sales



Ecopetrol sells natural gas to distribution
companies through firm, interruptible and conditional contracts. These distributors supply natural gas to the residential market,
for compressed natural gas for vehicles and to industries in Colombia. We also market and sell natural gas to the industrial sector
and to gas-fired and combined cycle power plants.



Despite higher demand by thermal power
plants due to “El Niño” climate phenomenon, Ecopetrol’s natural gas sales decreased 15.9% (14.7 mboepd)
as compared to 2015 due to the decline of production at the Guajira field, restrictions on transporting natural gas by pipeline
to dispatch natural gas from fields found in the inner part of Colombia and the decrease in consumption of the industrial and vehicular
sectors. Our market share in 2016 was 64% as compared to 63% in 2015.



Natural Gas Delivery Commitments



The table below sets forth the commitments
we have in Colombia under firm contracts with local natural gas distribution companies, local industries, gas fired power generators,
and internal agreements with our refineries and fields.



24







Table 24 – Ecopetrol Consolidated
Natural Gas Delivery Commitments



|                               |  | For the year ended December 31, |      
|------------------------------ |  | ------------------------------- | -----
|                               |  | 2017                            |      
|                               |  | (gbtud)                         |      
|Volume for sales third parties |  |                                 | 475.2
|Volume for self-consumption    |  |                                 | 224.4
|Total Commitments              |  |                                 | 699.6



Neither Ecopetrol America, Equion nor
Savia Peru are included in the table above since they do not consolidate within Ecopetrol Group. In respect of Ecopetrol
America Inc., it does not have any natural gas delivery or supply commitments.



Refined Products



Domestic sales of refined
products increased by 3.6 mboepd, an increase of 1.2% compared with 2015. This increase is primarily the result of: (i) a
10%, or 10.2 mboepd, increase in gasoline sales mainly due to a 13% decrease in gasoline prices as compared to 2015 and less
production of ethanol for blending, (ii) a 5%, or 1.3 mboepd increase, in fuel sales mainly due to a 5% increase in the
number of passengers transported as compared to 2015 and a 2% increase in air freight as compared to 2015, (iii) a 28%, or
1.3 mboepd, increase in fuel oil sales mainly as a result of new contracts and higher domestic fuel sales at Reficar, and
(iv) a 1.9%, or 0.3 mboepd, increase in LPG sales mainly due to an increase in production at Reficar. These increases were
partially offset by a 6%, or 7.5 mboepd, decrease in diesel sales mainly due to the freight land transportation strike in
June and July 2016 and lower than expected economic growth.



Exports of products increased by 93.7%
as compared to 2015, due to 74 mboepd increase by Reficar mainly due to: (i) the finalization of the entire expansion and modernization
project, followed by the startup process completed in July 2016, thereby advancing to the stabilization phase, and (ii) an increase
in Propilco’s exports of close to 0.6 mboepd in 2016 (9.9 mboepd vs. 9.3 mboepd of 2015). This increase was partially
offset by a decrease in fuel oil exports by 6 mboepd, or 10%, due to lower fuel oil production in the Barrancabermeja Refinery.



In addition, local sales of petrochemicals
(included in domestic sales of products) decreased as compared to the previous year (19.2 mboepd in 2016 compared with 21.7 mboepd
in 2015), due to a decrease in asphalt and aromatic solvents sales by Ecopetrol S.A. and a decrease in Propilco’s sales.



| | 3.4.3 | Reserves
| | ----- | --------



The reserves audit process was conducted
in accordance with SEC definitions and rules set forth in Rule 4-10(a) of Regulation S-X and the disclosure guidelines contained
in the SEC’s Modernization of Oil and Gas Reporting final rule dated December 31, 2008 and effective as of January 1,
2010.



The estimated reserve amounts presented
in this report, as of December 31, 2016, are based on the average prices during the 12-month period prior to the ending date
of the period covered in this report, determined as the unweighted arithmetic averages of the prices in effect on the first day
of the month for each month within such period, unless prices were defined by contractual arrangements, as required by the SEC
regulations.



Our crude oil and natural gas net proved
reserves include reserves from our subsidiaries located in the United States (Gulf of Mexico) and Peru, and Equion and Hocol’s
assets in Colombia.



25







Estimated Net Proved Reserves



The following table sets forth our estimated
net proved developed reserves of crude oil and gas by region for the years ended December 31, 2016, 2015 and 2014.



Table 25 – Net Proved Developed
Reserves



|Net Proved Developed Reserves                                                    |  | Colombia |       |  | North America |  |    | South America excluding Colombia |  |  | Total | 
|-------------------------------------------------------------------------------- |  | -------- | ----- |  | ------------- |  | -- | -------------------------------- |  |  | ----- | 
|Net Proved Developed oil reserves in million barrels oil equivalent              |  |          |       |  |               |  |    |                                  |  |  |       | 
|At December 31, 2014                                                             |  |          | 967   |  |               |  | 2  |                                  |  |  | 10    | 
|At December 31, 2015                                                             |  |          | 849   |  |               |  | 3  |                                  |  |  | 6     | 
|At December 31, 2016                                                             |  |          | 710   |  |               |  | 6  |                                  |  |  | 7     | 
|Net Proved Developed NGL reserves in million barrels oil equivalent              |  |          |       |  |               |  |    |                                  |  |  |       | 
|At December 31, 2014                                                             |  |          | 62    |  |               |  | 0  |                                  |  |  | 1     | 
|At December 31, 2015                                                             |  |          | 54    |  |               |  | 0  |                                  |  |  | 1     | 
|At December 31, 2016                                                             |  |          | 55    |  |               |  | 0  |                                  |  |  | 1     | 
|Net Proved Developed gas reserves in billion standard cubic feet                 |  |          |       |  |               |  |    |                                  |  |  |       | 
|At December 31, 2014                                                             |  |          | 3,260 |  |               |  | 14 |                                  |  |  | 9     | 
|At December 31, 2015                                                             |  |          | 3,156 |  |               |  | 16 |                                  |  |  | 5     | 
|At December 31, 2016                                                             |  |          | 3,114 |  |               |  | 9  |                                  |  |  | 8     | 
|Net Proved Developed oil, NGL and gas reserves in million barrels oil equivalent |  |          |       |  |               |  |    |                                  |  |  |       | 
|At December 31, 2014                                                             |  |          | 1,602 |  |               |  | 5  |                                  |  |  | 12    | 
|At December 31, 2015                                                             |  |          | 1,457 |  |               |  | 5  |                                  |  |  | 7     | 
|At December 31, 2016                                                             |  |          | 1,311 |  |               |  | 8  |                                  |  |  | 10    | 



The conversion rate used is 5,700 standard
cubic feet = 1 barrel of oil equivalent.



We are required, as are all oil companies
undertaking exploratory and production activities in Colombia, to pay a percentage of our production to the Government as royalties.
However, the ANH’s Resolution 877 of 2013, Resolution 351 of 2014 and Resolution 640 of 2014 require natural gas royalties
to be paid in cash, which means that the determination of the property rights to the quantities of natural gas we produce is based
on the total volume produced without deductions on account of royalties. The main producing gas fields are Cusiana, Cupiagua, Pauto,
Chuchupa, Gibraltar, and Ballena.



The Ministry of Mines and Energy is responsible
for reviewing and approving the design of and tracks for crude oil pipelines in Colombia. The Ministry of Mines and Energy establishes
transportation rates based on information provided by the service suppliers, with the tariffs based on the principle of cost recovery
plus a reasonable rate of return.



In prior filings, Ecopetrol has used the
tariffs set by the Ministry of Mines and Energy as transportation cost to be deducted from the crude benchmark price for the purpose
of evaluating the economic production, economic life and reserves of Colombian assets.



Ecopetrol S.A. owns 100% of Cenit, a subsidiary
that operates in Colombia and is dedicated to the storage and transportation of hydrocarbons through pipelines. Cenit provides
transportation services for the entire Ecopetrol Group and we fully consolidate Cenit into our consolidated results of operations.
Therefore, the difference between the tariffs set by the Ministry of Mines and Energy and the real transportation costs (fixed
and variable operating expenses) does not affect our consolidated income statement. Thus, in presenting our reserves information
in this annual report, we have used our real transportation costs, rather than the regular tariffs set by the Ministry of Mines
and Energy.



26







The following table summarizes our proved
oil, NGL and natural gas reserves, which includes 234 billion standard cubic feet of fuel gas within our natural gas results and
671 billion cubic feet of royalties, as of December 31, 2016.



Table 26 – Proved Oil, NGL and
Natural Gas Reserves



|Reserves Category                 |  | Oil  (million barrels) |     |  | NGL (million barrels) |  |    | Natural Gas (bcf) |  |  | Total Oil and Gas (Mmboe) | 
|--------------------------------- |  | ---------------------- | --- |  | --------------------- |  | -- | ----------------- |  |  | ------------------------- | 
|PROVED DEVELOPED RESERVES         |  |                        |     |  |                       |  |    |                   |  |  |                           | 
|Total (Colombia)                  |  |                        | 710 |  |                       |  | 55 |                   |  |  | 3,114                     | 
|International:                    |  |                        |     |  |                       |  |    |                   |  |  |                           | 
|North America                     |  |                        | 6   |  |                       |  | 0  |                   |  |  | 9                         | 
|South America                     |  |                        | 7   |  |                       |  | 1  |                   |  |  | 8                         | 
|TOTAL PROVED DEVELOPED RESERVES   |  |                        | 723 |  |                       |  | 56 |                   |  |  | 3,131                     | 
|PROVED UNDEVELOPED RESERVES       |  |                        |     |  |                       |  |    |                   |  |  |                           | 
|Total (Colombia)                  |  |                        | 238 |  |                       |  | 13 |                   |  |  | 85                        | 
|International:                    |  |                        |     |  |                       |  |    |                   |  |  |                           | 
|North America                     |  |                        | 3   |  |                       |  | 0  |                   |  |  | 2                         | 
|South America                     |  |                        | 0   |  |                       |  | 0  |                   |  |  | 0                         | 
|TOTAL PROVED UNDEVELOPED RESERVES |  |                        | 241 |  |                       |  | 13 |                   |  |  | 87                        | 
|TOTAL PROVED RESERVES             |  |                        | 964 |  |                       |  | 69 |                   |  |  | 3,218                     | 



The conversion rate used is 5,700 standard
cubic feet = 1 barrel of oil equivalent.



Reserves Replacement



The reserves replacement ratio is defined
as the sum of additions and revisions of proved reserves divided by produced volumes in any given period. The following table presents
the changes in reserves in each category relating to the reserve replacement ratio for the years 2016, 2015 and 2014.



Changes in Proved Reserves



Table 27 – Changes in Proved
Reserves



|                                                      |  | As of December 31, |     
|----------------------------------------------------- |  | ------------------ | ----
|                                                      |  | 2016               |     
|Consolidated Company (million barrels oil equivalent) |  |                    |     
|Revisions of previous estimates                       |  |                    | (54 
|Improved Recovery                                     |  |                    | 11  
|Extensions and discoveries                            |  |                    | 27  
|Total reserves additions                              |  |                    | (16 
|Production                                            |  |                    | (235
|Net change in proved reserves                         |  |                    | (251












The reserves replacement ratio for 2016
was (0.07) compared to 0.06 in 2015. The average replacement ratio for the last three years was 0.48.



Table 28 – Reserves Replacement
Ratio (including purchase and sales)



|                   |  | As of December 31, |      
|------------------ |  | ------------------ | -----
|                   |  | 2016               |      
|Annual             |  |                    | (0.07
|Three year average |  |                    | 0.48 



27







Revisions of Previous Estimates



In 2016, revisions reduced reserves by
54 million boe, mainly as a result of:



| | (i) | A decrease of 157 million boe, due to: (i) economic factors, primarily the decrease in oil prices,
leading to a 114 million boe decrease in reserves (the ICE Brent crude price was 20% lower in 2016 as compared to 2015, which resulted
in the lowering of economic limits in some of our fields) and (ii) our portfolio of projects decreased by 43 million boe.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | An increase of 27 million boe due to: (i) 19 million boe increase at the Palagua-Caipal fields,
given the execution of the Company ́s plan to perform additional drilling activities in order to cover new proved area, and
(ii) the development projects in the Guatiquia, Ocelote, Provincia, Quifa and Dalmatian fields that increased reserves by 8 million
boe.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | An increase of 25 million boe, as a result of change in the percent of royalties collected from
the drilling project at the Rubiales field.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | An estimated 53 million boe increase given that Ecopetrol is using real transportation costs in
this annual report as opposed to the tariff established by the Ministry of Mines and Energy.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Improved Recovery



In 2016, improved recovery increased reserves
by 11 million boe. The additions were associated with the continued development of water flood projects through existing wells,
although additional drilling may be required to fully optimize the development configuration. The main additions were in La Cira-Infantas, Chichimene, Casabe and Yarigui fields, which collectively accounted for an 8 million boe increase.



Extensions and Discoveries



Extensions and discoveries during 2016
amounted to 27 million boe, which is comprised of 25 million boe of extensions of proved acreage and 2 million boe from newly
discovered fields and reservoirs. The newly discovered fields in Colombia corresponded to the Bayonero and Oripaya fields, and
new reservoirs were discovered in Coren, Corocora Sur and Cravo Este. The extensions of proved acreage resulted mainly from activities
in new proved areas in the Castilla, Chichimene, Gibraltar, Pauto and Rubiales fields, which accounted for 20 million boe
of the total of 25 million boe from extensions of proved acreage. The remaining 5 million boe corresponds to smaller
changes in several other fields.



Development of
reserves



As of December 31, 2016, our total proved
undeveloped oil and gas reserves amounted to 269 million boe, 27% of which are related to the drilling activities in Area
Castilla and 25% to the development activities in Rubiales field. The Cupiagua, Palagua, Pauto, Quifa, and Yarigui fields collectively
accounted for 27% of total proved undeveloped oil and gas reserves with the remaining 21% from several other fields.



Our proved undeveloped reserves represent
17% of our total proved reserves.



The Ecopetrol’s year-end development
plans are consistent with SEC guidelines for the development of proved undeveloped reserves within five years.



The following table reflects the developed
and undeveloped proved reserves estimates through the past three fiscal years.



Table 29 – Developed and Undeveloped
Proved Reserves



|Proved Reserves as of December 31, |  | Oil   |     |  | NGL   |  |    | Gas |  |  | Total | 
|---------------------------------- |  | ----- | --- |  | ----- |  | -- | --- |  |  | ----- | 
|                                   |  | Mmbls |     |  | Mmbls |  |    | Bcf |  |  | Mmboe | 
|2016 proved reserves               |  |       |     |  |       |  |    |     |  |  |       | 
|Developed                          |  |       | 723 |  |       |  | 56 |     |  |  | 3,131 | 
|Undeveloped                        |  |       | 241 |  |       |  | 13 |     |  |  | 87    | 
|2015 proved reserves               |  |       |     |  |       |  |    |     |  |  |       | 
|Developed                          |  |       | 858 |  |       |  | 55 |     |  |  | 3,176 | 
|Undeveloped                        |  |       | 308 |  |       |  | 18 |     |  |  | 303   | 
|2014 proved reserves               |  |       |     |  |       |  |    |     |  |  |       | 
|Developed                          |  |       | 979 |  |       |  | 63 |     |  |  | 3,284 | 
|Undeveloped                        |  |       | 405 |  |       |  | 18 |     |  |  | 245   | 



28







Of the total amount of proved undeveloped
reserves that Ecopetrol had at the end of 2015 (379 million boe), we converted approximately 68 million boe, or 18%,
to proved developed reserves during 2016, primarily associated with the development of crude oil and gas projects in the Castilla,
Pauto, Mamey, Bonga and Gunflint fields. These projects accounted for approximately 84% of the total conversion while the remaining
16% is associated with development execution in other fields such as the Quifa and Rubiales fields, among others. The amount of
investments made during 2016 to convert proved undeveloped reserves to proved developed reserves was US$709 million.



Changes in Undeveloped Proved Reserves



The following table reflects the main changes
in undeveloped proved reserves during 2016.



Table 30 – Changes in Undeveloped
Proved Reserves in 2016



|Consolidated Companies (million barrels oil equivalent) |  |  |       
|------------------------------------------------------- |  |  | ------
|Revisions of previous estimates                         |  |  | (60.4 
|Improved recovery                                       |  |  | 7.1   
|Extensions and discoveries                              |  |  | 11.8  
|Proved Undeveloped converted to Proved Developed        |  |  | (68.4 
|Net change in unproved reserves                         |  |  | (109.9










The conversion
rate used is 5,700 standard cubic feet = 1 barrel of oil equivalent.



Reserve Estimation Process



Ecopetrol’s reserves process is supervised
and coordinated by the Corporate Reserves Director, a highly experienced geologist and engineer, who reports to the Chief Financial
Officer. The reserves audit group is comprised of reserves coordinators who are geologist and petroleum engineers, each with more
than 10 years of experience in reservoir characterization, field development, estimation and reporting of reserves and who have
supervision and supporting responsibilities over the professionals involved in the estimation and reporting process.



Reserves are first estimated internally,
supervised and coordinated by the Corporate Manager of Reservoirs, a geologist who holds a Master’s degree in geology and
has more than 20 years of experience in projects associated with reservoir characterization and development, estimation, and reporting
of reserves. The employees involved in the reserves process meet the Society of Petroleum Engineers qualifications for reserves
estimators. Internally estimated reserves are submitted to an external audit process, which was conducted by the external engineers
(Ryder Scott and DeGolyer and MacNaughton). According to our corporate policy, we report the reserves values obtained from the
external engineers, even if they are lower than our internal estimated reserves.



The reserves estimation process ends when
the Corporate Reserves Director consolidates the results and presents them to the Reserves Committee, which is composed of the
Chief Financial Officer and the Vice-President of Development and Production. Results are presented to the Audit Committee of the
Board of Directors and finally approved by the Board of Directors.



Petroleum engineering consultants
DeGolyer and MacNaughton and Ryder Scott have audited Ecopetrol’s proved reserves as of December 31, 2016. These
external engineers audited 99% of our estimated net proved reserves. The reserves reports of the external engineers are
included as exhibits to this annual report. The external engineers DeGolyer and MacNaughton and Ryder Scott audited 99% of
our estimated net proved reserves for the year ended December 31, 2015 and 2014.



29







Ecopetrol uses deterministic methods that
are commonly used internationally to estimate reserves. These methods have some uncertainty with respect to degradation, and thus,
the estimates should not be interpreted as being exact amounts. However, the technology used to estimate reserves is considered
reliable. The majority of the producing proved reserves were estimated by applying appropriate decline curves or other performance
relationships. In analyzing decline curves, reserves were estimated by calculating economic limits that are based on current economic
conditions. In certain cases, where the methods previously employed could not be used, reserves were estimated by analogy with
similar reserves for which more complete data was available.



Estimates of reserves were prepared by
geological and engineering standard methods commonly used in the oil and gas industry. The method or combination of methods used
in the analysis of each reserve was adopted from experience analogy reserves, including information on the stage of development,
quality and completeness of basic data and production history.



The following table reflects the estimated
proved reserves of oil and gas as of December 31, 2014 through 2016, and the changes therein.



Table 31 – Estimated Proved Reserves
of Oil and Gas



|Consolidated companies     |  | Colombia                                      |        |   | North America |  |      | South America excluding Colombia |  |  | Total |  
|-------------------------- |  | --------------------------------------------- | ------ | - | ------------- |  | ---- | -------------------------------- |  |  | ----- | -
|                           |  | Net proved oil, NGL and gas reserves in Mmboe |       
|Revisions                  |  |                                               | 264.7  |   |               |  | 1.7  |                                  |  |  | 4.0   |  
|Purchase of Minerals       |  |                                               | 0.0    |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Improved Recovery          |  |                                               | 34.1   |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Extensions and discoveries |  |                                               | 50.1   |   |               |  | 0.8  |                                  |  |  | 0.0   |  
|Sales                      |  |                                               | 0.0    |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Production                 |  |                                               | (239.6 | ) |               |  | (1.5 | )                                |  |  | (2.0  | )
|At December 31, 2014       |  |                                               | 2,043  |   |               |  | 18   |                                  |  |  | 23    |  
|Revisions                  |  |                                               | (14.8  | ) |               |  | (2.8 | )                                |  |  | (7.1  | )
|Purchase of Minerals       |  |                                               | 0.0    |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Improved Recovery          |  |                                               | 15.8   |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Extensions and discoveries |  |                                               | 24.4   |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Sales                      |  |                                               | 0.0    |   |               |  | 0.0  |                                  |  |  | 0.0   |  
|Production                 |  |                                               | (247.5 | ) |               |  | (1.4 | )                                |  |  | (1.8  | )
|At December 31, 2015       |  |                                               | 1,821  |   |               |  | 14   |                                  |  |  | 14    |  
|Revisions                  |  |                                               | (51    | ) |               |  | (0.7 | )                                |  |  | (2.5  | )
|Improved Recovery          |  |                                               | 11     |   |               |  | 0    |                                  |  |  | 0     |  
|Extensions and discoveries |  |                                               | 27     |   |               |  | 0    |                                  |  |  | 0     |  
|Production                 |  |                                               | (231   | ) |               |  | (2.3 | )                                |  |  | (1.7  | )
|At December 31, 2016       |  |                                               | 1,577  |   |               |  | 11   |                                  |  |  | 10    |  



For more information regarding the potential
impacts of oil prices on our reserve estimates, see the sections Financial Review—Trend Analysis and Sensitivity Analysis
and Risk Review—Risk Factors.



| | 3.4.4 | Joint Venture and Other Contractual Arrangements
| | ----- | ------------------------------------------------



We conduct our exploration and production
business through a variety of types of contractual arrangements with the Colombian government or with third parties. Below is a
general description of each type of contractual arrangement to which we were a party as of December 31, 2016:



30







Association Contract



Created by the Decree 2310 of 1974, the
purpose of this contract is the exploration of the areas covered by the contract, and the exploitation of hydrocarbons found in
that area. This type of contract, together with E&P contracts and Special Contracts (Casabe and La Cira) which are described
below, are the most significant in terms of our production and proved reserves.



Under association contracts, the exploratory
risk is assumed entirely by Ecopetrol S.A.’s contractual partner, the associate. If there is a discovery and Ecopetrol S.A.
agrees that the relevant field is commercially viable, Ecopetrol S.A. will participate in the field’s development. A joint
account will be created and Ecopetrol S.A. and the partner will participate in the expenses and investments in the proportions
established in the corresponding contract. Ecopetrol S.A. will reimburse the direct exploratory expenses incurred by the contractual
partner in the proportions established by the contract.



If Ecopetrol S.A. does not believe that
the relevant field is commercially viable, the partner has the right to execute on its own all activities considered necessary
for the field’s exploitation as a “sole risk operation”, and to be reimbursed for a defined percentage of all
investments for such sole risk operation in accordance with the corresponding contract.



Every association contract provides for
an executive committee that makes all technical, financial and operational decisions if Ecopetrol S.A. has agreed that a field
is economically viable. All major decisions of this committee must be made unanimously by the parties.



The maximum term of an association contract
is 28 years. The first six years of the contract are for the exploratory phase, and are extendible for 1 or 2 more years at the
partner’s request. The remaining time is for the exploitation phase.



Incremental Production Contract



We enter into incremental production contracts
to obtain incremental hydrocarbon production beyond a base production curve that is established based on the proven reserves of
a specific field or well. Under this type of arrangement, Ecopetrol S.A. owns 100% of the hydrocarbons defined by the base production
curve. The incremental production (i.e. the hydrocarbon volume obtained beyond the basic production as a result of investment activities),
will be owned by the parties to such incremental production contract in the proportions established by such contract.



The initial phase of an incremental production
contract has a term of up to 3 years, in which the contractual partner executes an initial work program approved by Ecopetrol S.A.
in order to gain the right (but not the obligation) to continue with the second phase. If Ecopetrol’s partner decides to
continue with the project for the second phase (the complementary phase), it must inform Ecopetrol S.A. in writing no later than
90 days prior to the termination date of the initial phase and deliver a proposed development plan for each covered field. The
second phase is the production phase and has a maximum term of 22 years minus the length of the initial phase.



Incremental production contracts provide
for an executive committee that is responsible for taking all decisions in order to approve, control, and supervise all operations
that take place during the duration of the contract. These contracts also provide for a steering committee, which is responsible
for the supervision of the execution of the work programs, the annual budget, and other items.



Risk Production Contract for Discovered
Undeveloped and Inactive Fields (First Round 2003)



We have entered into risk production contracts
for discovered undeveloped fields to promote exploration by private companies of both undeveloped and inactive fields. Under these
contracts, the contracting party assumes all costs and expenses for the development and operation of a field in exchange for a
percentage interest in the fields’ production as specified in the contract. This type of contract has a ten-year term calculated
as from its date of execution; one year for the evaluation period and a maximum of nine years for the development period. Some
of these contracts have subsequently been extended beyond their original term.



31







Operation for Risk Production
Contracts for Discovered Undeveloped and Inactive Fields (Second Round 2005)



The contracts awarded in the second round
of undeveloped and inactive discovered fields are service contracts wherein services rendered are payable with a percentage of
the production. Ecopetrol S.A. keeps all rights to explore and exploit hydrocarbons found in the area.



These contracts have a 10 year term, including
an evaluation period of 8 months, within which the operator has to comply with a minimum commitment to conduct a technical evaluation
of the field at its own risk.



The facilities built during the term of
the contract, other than facilities associated with drilled wells, will be owned by the operator, who will remain responsible for
them, even after contract ends. Only drilled wells become property of Ecopetrol S.A. upon the contract’s termination.



Risk Participation Contract



The purpose of this contract is the exploration
of the contracted area, and the exploitation of the oil found in the contracted area. Unlike in the association contract, Ecopetrol
S.A. shares exploratory risks and costs with the contractual partner, the associate, together with the oil produced, in the proportions
established by the contract.



Risk participation contracts provide for
an executive committee which is created upon the execution of the contract.



These contracts have a 28 year term,
including an exploratory period of six years (which period is extendible under certain contracts for one or two years), after
which the exploitation period commences.



Special Contracts



We are party to a Joint Venture Contract for Exploration and
Exploitation of “La Cira-Infantas” Area; and a Services and Technical Collaboration Contract for the “Casabe”
field.



Joint Venture Contracts for Exploration and Exploitation
of “La Cira-Infantas” Area and of “Teca-Cocorná” Area



These contracts between Ecopetrol S.A. and Occidental Andina
LLC, executed on September 6, 2005 and June 24, 2014, respectively, have as purpose a joint collaboration between the parties with
the goal of increasing the economic value of the La Cira-Infantas field and the Teca-Corcorná field, by means of hydrocarbon
exploration and production activities including, among others, an incremental production project to improve the recovery factor,
process optimization, and exploratory activities.



Ecopetrol S.A. partially assigned its exploratory and production
rights in the Contracted Areas to Occidental Andina LLC. Ecopetrol S.A. provides financial resources and the preferential rights
of use for the existing infrastructure in that zone and Occidental Andina LLC provides financial resources and the technical and
operative experience in mature fields redevelopment projects and enhanced recovery technologies.



Ecopetrol S.A. is the operator under both Joint Venture Contracts,
and on behalf of the parties is responsible for the conduction, execution and control, directly or via contractors, of the operational
activities.



The La Cira-Infantas contract’s term is divided in three
phases. The first phase lasts 180 days, the second 730 days and the third up to the economical limit.



The incremental production, after deduction of the royalties,
is owned 52% by Ecopetrol S.A. and 48% by Occidental Andina LLC. These same percentages apply to the participation in the operational
and direct expenses. Adjustments to the participations for the benefit of Ecopetrol S.A. will occur if there are high production
levels or high prices.



32







The Teca-Cocorná contract’s term is divided in
two phases. The first phase lasts three years, extendable for up to an additional year, the second 20 years counted as from the
initiation for the second phase and will be reduced by the term of any extensions of the first phase.



The incremental production, after deduction of the royalties,
is owned 60% by Ecopetrol S.A. and 40% by Occidental Andina LLC. These same percentages apply to the participation in the operational
and direct expenses. Adjustments to the participations for the benefit of Ecopetrol S.A. will occur if there are high production
levels and high prices.



Services and Technical Collaboration Contract “Casabe”



The purpose of the contract executed between Ecopetrol S.A.
and Schlumberger Surenco S.A. on April 26, 2004, is the evaluation, design and execution of work programs specifically with the
purpose of increasing the value in the Casabe field, by means of development of activities to obtain incremental production, application
of new technologies, application of techniques for deposits management and operational costs reduction. Ecopetrol S.A. is the operator
and Schlumberger Surenco S.A. keeps the right of first option regarding the activities to be executed in the area of interest.



Both parties can invest in all the activities seeking to evaluate,
obtain and incorporate incremental value in the area of interest. Such activities are developed directly by the parties or via
contractors (Ecopetrol) or subcontractors (Schlumberger). Amounts expended pursuant to the contract are reimbursed depending on
the incremental value (monthly valuation in US$ of the results obtained from the execution of the work programs) created through
the contract and the activities executed thereunder.



Both Ecopetrol S.A. and Schlumberger Surenco S.A. commit to
assume full responsibility for damages and/or losses suffered by their respective personnel and goods in development of the contract,
regardless of the cause. The maximum authority is the Management Committee.



The contract had an initial term of 10 years, and was amended
several times to include an additional term of six years for which a new business was structured.



The National Hydrocarbons Agency
(ANH) and its Contracts



The National Hydrocarbon Agency (“ANH”)
was created by Decree Law 1760 of 2003 and was given the authority to administer all national hydrocarbon reserves under contracts
executed beginning on January 1, 2004 (Decree Law 1760 of 2003 states, “The Empresa Colombiana de Petróleos,
Ecopetrol, is split, its organic structure is modified, and the Agencia Nacional de Hidrocarburos and the Sociedad Promotora de
Energía de Colombia S.A. are created”). Prior to January 1, 2004, Ecopetrol S.A. had the authority to contract
with third parties for the exploration and production of new areas. The creation of the ANH did not modify the rights or obligations
of Ecopetrol or other parties with respect to contracts in existence at the time when ANH was created and Ecopetrol retains the
authority to execute agreements with respect to all areas that it held as of January 1, 2004 when the ANH was created.



Below, we include a brief description of each type of contract
that we have entered into with the ANH:



Technical Evaluation Agreement



This type of contract grants to the contractor
the right to develop technical evaluation operations with operational autonomy at its own cost and risk, seeking to appraise the
hydrocarbon potential, with the purpose of identifying the zones of prospective interest in the area by means of the execution
of an exploratory program. The contractor has the option to request the conversion of a technical evaluation agreement (“Technical
Evaluation Agreement” or “TEA”) into one or more E&P Contracts that cover the area of the TEA (or a portion
thereof).



The contractor can conduct evaluation activities
for terms that vary between 18, 24 and 36 months, depending on the terms of reference of the ANH’s bidding round.



33







E&P Contract



The ANH enters into concession contracts pursuant
to which the Nation grants exploration and production rights, and receives royalties and taxes. In turn, the contractor provides
100% of the investment and expenses resources, and receives 100% of the production after royalties and taxes. The ANH has named
this contract an “Exploration and Production Contract” (E&P Contract).



Pursuant to the first stage of this contractual
model, the ANH only received a percentage of oil revenues in two cases: (i) when the international oil prices rose beyond a specified
price, above which the ANH has a right to participate in a share of the increased revenues generated, or (ii) in the case of recognition
of production rights in an extended contractual phase.



Under all E&P contracts executed since
ANH’s 2008 bidding round, the ANH receives a percentage of the production from the beginning of the contract, and not only
in the extension phase of the contract as mentioned in the previous paragraph, in addition to economic rights when the price of
oil exceeds a reference price set in the contract (high price fee) and the superficiary canon.



E&P contracts have two phases: (i) an exploration
period, which term is 6 years counted from the effective date, renewable for two additional years, and (ii) a production period,
which is, with respect to each production field, 24 years plus any extensions, which are counted from the date of declaration of
commerciality of the corresponding field. The above-mentioned terms have been modified during ANH’s 2014 bidding round for
unconventional and offshore reservoirs to an exploration period of nine years and a 30 years production period.



ANH and Ecopetrol Agreements (Convenios)



At the time of termination or extension of
any association contract (executed by Ecopetrol S.A. before December 31, 2003), the rights over the production area and over
the movable and immovable assets therein will continue to belong to Ecopetrol S.A. Pursuant to article 2 of Decree 2288 of 2004,
which regulates Decree Law 1760 of 2003, Ecopetrol S.A. must execute an agreement with the ANH to regulate the exploration and
exploitation terms and conditions of the relevant area, which was previously subject to an association contract.



Decree 2288 of 2004 also established that Ecopetrol
S.A. would have to execute agreements with ANH covering fields directly operated by Ecopetrol S.A. Under these agreements ANH recognizes
the exclusive right of Ecopetrol S.A. to explore and exploit the hydrocarbons property of the Nation that are obtained in the areas
they cover, until resource depletion or until Ecopetrol S.A. returns the area to the Nation through the ANH.



These agreements also provide the conditions
under which Ecopetrol S.A. is able to assign, partially or completely, its rights and duties thereunder to third parties.



| | 3.5 | Transportation and Logistics
| | --- | ----------------------------



| | 3.5.1.1 | Transportation Activities
| | ------- | -------------------------



The transportation and logistics segment includes
the transportation of crude oil, motor fuels, fuel oil and other refined products including diesel and biofuels. We conduct most
of these activities through our wholly-owned subsidiary Cenit and its subsidiaries.





34







The map below shows the locations of the main
transportation networks owned by our business partners and us.



Graph 5 – Map of Oil
Pipelines









35







Graph 6 – Map of Multipurpose Pipeline







The table below sets forth the volumes of crude
oil and refined products transported through the crude oil pipelines and multipurpose pipelines owned by us.





36







Table 32 – Volumes of Crude Oil and
Refined Products Transported



|                              |  | For the year ended December 31, |      
|----------------------------- |  | ------------------------------- | -----
|                              |  | 2016                            |      
|                              |  | (thousand bpd)                  |      
|Crude oil transport(1)        |  |                                 | 867  
|Refined products transport(2) |  |                                 | 263  
|Total                         |  |                                 | 1,130








| | (1) | The crude oil transported volumes correspond to the following systems: Ocensa Segment 3, ODC, Vasconia-Galan,
Ayacucho-Galan, Ayacucho-Coveñas and Trasandino Pipeline.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The pipelines transporting refined products include the following: Galan-Sebastopol, Galan-Salgar,
Galan-Bucaramanga, Buenaventura-Yumbo and Cartagena-Baranoa.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



The volume of crude oil transported by Cenit ́s
main systems and those of affiliates decreased in 2016 by 11% compared to the previous year. This decrease was mainly the result
of lower production volumes in Colombia and impacted most of our crude oil pipelines. Of the total volume of crude transported
by oil pipeline, approximately 68% belonged to Ecopetrol’s corporate group.



The volume of refined products transported
by Cenit increased by 4% in 2016 mainly due to a higher volume of products transported through the Galan – Sebastopol system
to fulfill the demand in the central region. Of the total volume of refined products transported in multi-purpose pipelines during
the year, 20% belonged to Ecopetrol’s corporate group.



Transportation Capacity



During 2016, we increased the capacity of our
primary and secondary oil pipelines and loading facilities due to the reversion of the Ayacucho-Galan 14” system. Meanwhile,
our main expansion projects are under way with our main focus being to perform the adjustments to our infrastructure to allow the
transportation of heavier crude oil. Our main crude oil pipeline systems’ operating capacity increased from 1,336,000 bpd
in 2015 to 1,369,000 bpd in 2016.



Our main refined products pipeline transportation
capacity decreased from 529 thousand bpd in 2015 to 515 thousand bpd in 2016. This decrease in capacity was primarily the result
of a reduction in the utilization of drag reducer agent (DRA) in our Galan – Sebastopol 12” system and the transportation
of three refined products (naphtha, gasoline and diesel) in our Pozos Colorados – Galan system instead of the two refined
products (naphtha and diesel) transported in 2015.



References to our crude oil transportation
capacity in this annual report refer to the capacity of the pipelines that belong to Cenit and its subsidiaries to transport crude
oil volumes either to the Barrancabermeja Refinery or to our export facilities. In addition, we have other feeder systems that
transport oil volumes from producing facilities or other pumping stations to these main pipelines. References to our refined products
transportation capacity refer to the capacity of our Galan-Sebastopol, Galan-Bucaramanga, Cartagena-Baranoa, Pozos Colorados-Galan
and Buenaventura-Yumbo systems.



| | 3.5.1.2 | Pipelines
| | ------- | ---------



As of December 31, 2016, we, directly or indirectly
with private partners, own, operate and maintain an extensive network of crude oil and refined products pipelines. These pipelines
connect our own and third-party production centers, import facilities and terminals to refineries, major distribution points and
export facilities in Colombia. Cenit directly owns 49% of the total crude oil pipeline shipping capacity in Colombia. When aggregated
with the crude oil pipelines in which Cenit owns an interest, Cenit owns 81% of the oil pipeline shipping capacity in Colombia.
By December 31, 2016, our network of crude oil and multipurpose pipelines was approximately 8,860 kilometers in length. The transportation
network consists of approximately 5,146 kilometers of main crude terminals and oil pipeline networks connecting various fields
to the Barrancabermeja Refinery and Reficar, as well as to export facilities. We also own 3,714 kilometers of multipurpose pipelines
for transportation of refined products from the Barrancabermeja Refinery and from Reficar to major distribution points. Out of
the 5,146 kilometers of crude oil pipelines, owned by us, 2,985 kilometers of crude oil pipeline are wholly owned and 2,161 kilometers
of crude oil pipeline are owned through non-wholly owned subsidiaries.





37







The following table sets forth our main pipelines
in which we own an indirect interest as of December 31, 2016.



Table 33 – Our Main Pipelines



|Pipeline                                |  | Kilometers |     |  | Capacity
                                                                                      (mbd) |  |     | Product Transported |  | Origin    |  | Destination |  | Indirect Ownership Percentage | 
|--------------------------------------- |  | ---------- | --- |  | ---------------------------------------------------------------------------------------------------- |  | --- | ------------------- |  | --------- |  | ----------- |  | ----------------------------- | 
|Caño Limón-Coveñas                      |  |            | 771 |  |                                                                                                      |  | 250 |                     |  | Crude Oil |  | Caño Limón  |  | Coveñas                       | 
|Oleoducto de Alto Magdalena (OAM)       |  |            | 391 |  |                                                                                                      |  | 110 |                     |  | Crude Oil |  | Tenay       |  | Vasconia                      | 
|Oleoducto de Colombia (ODC)             |  |            | 483 |  |                                                                                                      |  | 236 |                     |  | Crude Oil |  | Vasconia    |  | Coveñas                       | 
|Oleoducto Central –Ocensa  (*Segment 2) |  |            | 836 |  |                                                                                                      |  | 616 | *                   |  | Crude Oil |  | Cupiagua    |  | Coveñas                       | 
|Oleoducto de los Llanos (ODL)           |  |            | 260 |  |                                                                                                      |  | 340 |                     |  | Crude Oil |  | East fields |  | Monterrey Cusiana             | 
|Oleoducto Bicentenario de Colombia      |  |            | 230 |  |                                                                                                      |  | 110 | (1)                 |  | Crude Oil |  | Araguaney   |  | Banadia                       | 








| | (1) | Represents the contractual crude oil transportation capacity for the pipeline currently in operation.
| | --- | -----------------------------------------------------------------------------------------------------



As of December 31, 2016 we owned 68 stations,
34 located in crude oil pipelines, 30 in refined products pipelines, 2 in crude oil ports and 2 in refined product ports.



As of December 31, 2016, we had a nominal storage
capacity associated with the transportation network of 16 million barrels of crude oil and 4 million barrels of refined products.
We do not own any tankers.



Pipeline Projects SAN FERNANDO – MONTERREY



The San Fernando – Monterrey project’s
objectives include ensuring the ability to transport 300,000 bpd of diluted crude oil from the Chichimene and Castilla fields to
the Monterrey pumping station and the transportation of 45,000 bpd of diluent (naphtha) between the Apiay station and the Castilla
and Chichimene fields.



The scope of the project includes the construction
of a new 30” 171 km crude oil pipeline, a receipt, storage and pumping station, and the reversion/conversion of the existing
pipeline of 16” between the Castilla II plant and the Apiay station in order to transport diluent (naphtha) from the Apiay
station to the Castilla II plant.



As a result of the evaluations we made and
due to the reduction in production forecasts, the scope of the project was modified and the transportation capacity was reduced
from 390,000 bpd to 300,000 bpd from the San Fernando station to the Monterrey station.



During 2016 progress was achieved on construction
of the San Fernando station, especially with regards to the assembly of the pumping system units. We completed the construction
of the lines between San Fernando and Apiay, and the branch lines between San Fernando and the Castilla and Chichimene stations.
By the end of the first quarter of 2017 the filling of tanks and lines and the testing of main pumping units had been completed.



OCENSA (P135)



The OCENSA P135 project’s main objective
is to increase the pipeline transportation capacity by 135,000 bpd. The project involves improving the pumping system and increasing
the storage capacity. The main project activities were completed at the end of December 2016 and the shippers were notified of
such completion by Ocensa. Before commencing operations, Ocensa is expecting the ruling required by the Colombian Ministry of Mines
and Energy.





38







OLEODUCTO AL PACIFICO SAS



Cenit is participating in the Oleoducto al
Pacífico SAS, led by Enbridge, which intends to transport heavy crude oil to the Colombian Pacific coast. In 2015, the scope
of work was focused on reviewing the business case for the development of the project, conducting advance prior consultations with
communities along the rights of way, negotiating project governance matters and reviewing regulatory, commercial and technical
issues.



Due to the environment of the oil industry
and uncertainty about future volume of oil production in Colombia, the project continuity is under review and it was put on hold.



TRANSPORTATION OF HIGHER VISCOSITY CRUDES



In 2016 crude was transported at viscosities
greater than 405 cSt on the principal systems, particularly at Ocensa, where since the last quarter of 2016 there has been the
ability to transport crudes at viscosities of up to 600 cSt.



Adaptations were also made to one of the single
buoy moorings of the Coveñas terminal to permit the importation of naphtha for dilution at this terminal. Integral capacity
tests are scheduled to be executed in 2017 for the transport of crude with this viscosity, and transport is expected to begin in
the second quarter of 2017.



The main modifications are on: the
ODL pipeline (Oleoducto de los Llanos; Rubiales – Cusiana), on Ocensa Segment 1  (Cusiana – Porvenir), Segments 2
&  3 (El Porvenir – Vasconia – Coveñas) and on the Oleoducto de Colombia Pipeline (ODC
– Oleoducto de Colombia). This project, combined with the expansion of capacity on Ocensa (P-135), will make it
possible to transport higher viscosity crudes.



| | 3.5.1.3 | Export and Import Facilities
| | ------- | ----------------------------



We currently have concessions granted by the
Nation for four export/import docks for crude oil and refined products: Coveñas, Tumaco, Pozos Colorados and Cartagena.
Our export capacity reached 1.24 million bpd for crude oil. Our import capacity of refined products reached 0.18 million bpd.



Our crude oil loading facilities can load tankers
of up to 350 thousand deadweight tonnage (DWT). Adjacent to these loading facilities we also have crude oil storage facilities
that are capable of storing 9 million barrels. Our docks used for import and export of refined products can load tankers of
70 thousand DWT. Additionally, these facilities have storage capacity of up to 1.2 million barrels.



| | 3.5.2 | Other Transportation Facilities
| | ----- | -------------------------------



We have entered into transportation agreements
with tanker-truck and barge companies in order to transport crude oil from locations that do not have pipeline connections to refineries
and export facilities. The volume of refined products that cannot be transported in pipelines or in tanker trucks because of capacity
limitation is transported by barges. During 2016, 22.9 million barrels of crude oil and refined products were transported
by tanker trucks and 7.9 million barrels of crude oil and refined products were transported by barges, particularly using the Rio
Magdalena, connecting Barrancabermeja with Barranquilla and Cartagena.



| | 3.5.3 | Marketing of Transportation Services
| | ----- | ------------------------------------



Cenit and its subsidiaries’ main line
of business is the crude oil pipeline transport (73% of revenues), followed by the refined products pipeline transport (17% of
revenues) and ports and related services (8% of revenues).



Transportation contracts of crude oil may take
several forms: ship or pay (payment for the availability of a fixed capacity in the system), ship and pay (payment for volumes
actually transported) or spot. The main users for the crude oil transportation business are Ecopetrol S.A., Metapetroleum Corp.,
Petrominerales, Occidental de Colombia, Mansarovar and Gran Tierra, who collectively represented 92% of this business segment’s
revenues in 2016. Transportation services for crude oil provided to Ecopetrol S.A. represented 60% of this business segment’s
crude oil transport revenues.





39







Cenit also transports refined products. Its
main client for this service is Ecopetrol S.A., which accounted for 41% of refined products pipeline transport revenues in 2016,
principally due to the transport of naphtha. Cenit also has 15 other fuel wholesalers’ customers for whom it transports other
refined products. The most significant of these customers are Organizacion Terpel, ExxonMobil, Chevron Petroleum Company, Biocombustibles
and Petrobras Colombia.



Deregulated businesses such as ports and crude
loading facilities represent a smaller portion of Cenit’s revenue (8% in 2016). Clients for these businesses include some
of the same parties for which Cenit provides crude oil and refined products transportation services.



| | 3.6 | Refining and Petrochemicals
| | --- | ---------------------------



| | 3.6.1 | Refining
| | ----- | --------



Our main refineries are: (i) the Barrancabermeja
Refinery, which Ecopetrol S.A. directly owns and operates, and (ii) Reficar Refinery, located in the free trade zone in Cartagena,
which is a wholly owned subsidiary of Ecopetrol S.A. Ecopetrol S.A. also owns and operates two other minor refineries – Orito
and Apiay, but these are considered part of the upstream segment since the majority of the products are for local on-site consumption.



These refineries produce a full range of refined
products, including gasoline, diesel, jet fuel, liquefied petroleum gas (LPG), and heavy fuel oils, among others.



The following table sets forth our daily average
installed and actual refinery capacity for each of the last three years:



Table 34 – Daily Average Installed
and Actual Refinery Capacity



|                |  | For the year ended December 31, |        
|--------------- |  | ------------------------------- | -------
|                |  | 2016                            |        
|                |  | Capacity                        |        
|                |  | (bpd)                           |        
|Barrancabermeja |  |                                 | 250,000
|Reficar(1)      |  |                                 | 150,000
|Apiay(2)        |  |                                 | 2,500  
|Orito(2)        |  |                                 | 2,500  
|Total           |  |                                 | 405,000








| | (1) | Reficar operations were shut down in March 2014 to enable the completion of the expansion and modernization
project. The new crude unit began start-up process in October 2015. During 2016, Reficar was under stabilization, with full operation
in July 2016. The refinery’s design capacity, tested in 2016, is 150 thousand barrels per day.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Apiay and Orito are considered to be part of the upstream segment, not the refining segment, and
the majority of products are for local on-site consumption.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The capacity indicated in 2015 was 165 thousand barrels per day which includes a design safety
factor of 10%.
| | --- | -------------------------------------------------------------------------------------------------------------



| | 3.6.1.1 | Barrancabermeja Refinery
| | ------- | ------------------------



The Barrancabermeja Refinery supplies 73.8% of the fuels consumed
in Colombia according to internal calculations made by the Barrancabermeja Refinery and Colombia ́s fuels consumption reported
by the Ministry of Finance.



The following table sets forth the production
of refined products of Barrancabermeja for the periods indicated.



Table 35 – Production of Refined
Products from Barrancabermeja Refinery



|                                                      |  | For the year ended December 31, |        
|----------------------------------------------------- |  | ------------------------------- | -------
|                                                      |  | 2016                            |        
|                                                      |  | (bpd)                           |        
|LPG, Propylene and Butane                             |  |                                 | 11,956 
|Gasoline Fuels and Naphtha                            |  |                                 | 59,305 
|Diesel                                                |  |                                 | 48,233 
|Jet Fuel and Kerosene                                 |  |                                 | 20,435 
|Fuel Oil                                              |  |                                 | 55,730 
|Lube Base Oils and Waxes                              |  |                                 | 668    
|Aromatics and Solvents                                |  |                                 | 2,879  
|Asphalts and Aromatic Tar                             |  |                                 | 14,092 
|Polyethylene, Sulfur and Sulfuric Acid                |  |                                 | 1,541  
|Total                                                 |  |                                 | 214,839
|Difference between Inventory of Intermediate Products |  |                                 | (661   
|Total Production                                      |  |                                 | 214,178





40







In 2016, total production from the Barrancabermeja
Refinery decreased 3.0% from 220,713 bpd in 2015 to 214,178 bpd in 2016 primarily due to the processing of a heavier crude slate
which lowered throughput, and the scheduled maintenance of two of its crude units in March and October 2016.



We own and operate four petrochemical plants
and one paraffin and lube plant located within the Barrancabermeja Refinery. In 2016, we produced 55,642 tons of low-density polyethylene,
an increase of 26% compared to the production of 44,161 tons in 2015. This increase was due primarily to the recovery of the Turbo
expander unit, which resumed operations in August 2015 and supplied a greater amount of feedstock (ethylene) to polyethylene plants.
We produced 1,994 mboepd of aromatics (benzene, toluene, xylene, orthoxylene, heavy aromatics and cyclohexane), a 12% decrease
as compared with the production of 2,259 mboepd of aromatics in 2015. The decline was mainly the result of lower demand.



The gross refining margin decreased from US$16.8
per barrel in 2015 to US$14 per barrel in 2016, primarily due to price differentials of refined products as compared to crude oil,
in line with international market trends.



The average conversion ratio for Barrancabermeja
Refinery was 74.6% in 2016 and 73.5% in 2015. This increase in the conversion ratio was primarily due to the upgrading of a gasoil
hydro-treating unit to a mild hydrocracker unit allowing higher middle distillate yields.



| | 3.6.1.2 | Reficar
| | ------- | -------



The following table sets forth the production
of refined products from Reficar for the periods indicated.



Table 36 – Production of Refined
Products from Reficar



|                                                      |  | For the year ended December 31,(1) |        
|----------------------------------------------------- |  | ---------------------------------- | -------
|                                                      |  | 2016                               |        
|                                                      |  | (bpd)                              |        
|LPG, Propylene and Butane                             |  |                                    | 6,080  
|Motor Fuels                                           |  |                                    | 35,012 
|Diesel                                                |  |                                    | 40,950 
|Jet Fuel and Kerosene                                 |  |                                    | 5,768  
|Fuel Oil                                              |  |                                    | 24,602 
|Sulfur                                                |  |                                    | 241    
|Total                                                 |  |                                    | 112,653
|Difference between Inventory of Intermediate Products |  |                                    | 911    
|Total Production (2)                                  |  |                                    | 113,564
|                                                      |  |                                    |        
|Petcoke (Metric tons)                                 |  |                                    | 601,163








| | (1) | The table shows the entire production of Reficar.
| | --- | -------------------------------------------------



| | (2) | Does not include petcoke.
| | --- | -------------------------



During the second half of 2016, the refinery
initiated its stabilization period.





41







The following tables set forth the imports
and sales of refined products from Reficar for the periods indicated.



Table 37 – Imports and Sales of Refined
Products from Reficar



|                      |  | For the year ended December 31, |       
|--------------------- |  | ------------------------------- | ------
|                      |  | 2016                            |       
|                      |  | (bpd)                           |       
|Imports               |  |                                 |       
|Motor Fuels           |  |                                 | 3,641 
|Diesel                |  |                                 | 6,155 
|Jet Fuel and Kerosene |  |                                 | 2,211 
|Alkylate              |  |                                 | 83    
|LPG and Butane        |  |                                 | 355   
|Total Imports         |  |                                 | 12,445



During 2016, Reficar imported products to cover
the North Coast sales demand.



|                      |  | For the year ended December 31, |        
|--------------------- |  | ------------------------------- | -------
|                      |  | 2016                            |        
|                      |  | (bpd)                           |        
|Sales                 |  |                                 |        
|Motor Fuels           |  |                                 | 38,534 
|Diesel                |  |                                 | 46,060 
|Jet Fuel and Kerosene |  |                                 | 7,479  
|Fuel Oil              |  |                                 | 16,593 
|Other Products        |  |                                 | 22,990 
|Total Sales           |  |                                 | 131,656



After seven years of construction work, Reficar
reached its most important historical milestone to date by entering 34 operating units into operation in July 2016. Reficar ́s
new and expanded processing capacity may exceed 150 thousand barrels of crude oil per day with a high value product conversion
factor of 97.5%. A number of critical milestones were reached during the first semester of 2016, including finishing project construction
activities and developing successful sequential start-up of the units up to July 2016. Reficar is now the most modern refinery
in Latin America, introducing new technology to the Colombian refinery industry with delayed coking and hydrocracking facilities;
and it now has the ability to process heavier crudes and produce gasolines and diesel fuels with ultra-low sulphur contents.



In September 2016, the operation of the new
refinery was formally transferred to Ecopetrol under an Operation and Maintenance Agreement that leverages on Ecopetrol ́s
existing refining capabilities while keeping Reficar as independent manager and owner of the assets.



Following full start-up, the focus areas of
the operation have been the stabilization of the production process and the execution of individual unit’s performance tests,
(62%, or 21 of 34, have been performed to date). The reliability test of the refinery as a whole is expected to be performed in
the second half of 2017.



In terms of gross refining margin, the refinery
advanced from an average of approximately US$ 3 per barrel between January and July 2016, to around US$ 9 per barrel between August
and December 2016 (stabilization and performance testing period), with expectations that in 2017 the margin will be in line with
the market trend for highly complex refineries.



Reficar ́s 2016 financials already reflect
the operation of the new units, thus total sales have increased 85% as compared to 2015, from US$ 1,155 million in 2015 to US$
2,142 million in 2016. A total of 42.9 million barrels of crude were processed in 2016 compared to 3.8 million barrels processed
in 2015. Exports to international markets represented 54% of total sales (US$ 1,158 million). The refinery’s production has
substituted 10 million barrels of gasoline and diesel imports, which previously had to be imported in order to supply the domestic
demand. As per information provided by the Colombian Government (specifically by the National Statistics Department –DANE-),
Reficar’s entrance into operation contributed 3.8% to the National Industrial GDP, and 0.4% to the National GDP during 2016.





42







Financing



On December 30, 2011, with the approval
from the Colombian Ministry of Finance and Public Credit, Reficar executed a US$3.5 billion project finance to partially fund
the expansion and modernization of the refinery in Cartagena, loans with tenors of 14 and 16 years from Commercial Banks and Export
Credit Agency Facilities, respectively. The aggregate amount drawn under these finance agreements totaled US$3,496.6 million.
As of December 31, 2016, the principal amount owed to the senior lenders under these finance agreements was US$2,796.3 million.
Interest payments during 2015 and 2016 were US$92 million and US$87 million, respectively.



As part of the project finance structure, Ecopetrol
S.A. entered into a Construction Support Agreement (the “Construction Support Agreement”) and a Debt Service Guarantee
Agreement (the “Debt Service Guarantee Agreement”) to support certain obligations of Reficar. Pursuant to the terms
of the Construction Support Agreement, Ecopetrol S.A. agrees to support up to the completion date, any additional costs, expenses
or delays incurred during the construction phase of the expansion and modernization of the refinery in Cartagena. By means of the
Debt Service Guarantee Agreement, Ecopetrol S.A. provides a liquidity mechanism, allowing Reficar to pay its debt service in situations
in which there are liquidity shortfalls.



During 2016, Reficar received capitalizations
for US$615 million to cover project capital expenditures, start-up costs, one-off stabilization costs of the new refinery and
a portion its debt service payments. The amount requested by Reficar under the Construction Support Agreement was US$425 million.
The amount requested by Reficar under the Debt Service Guarantee Agreement was US$170 million. There was no need to request additional
contributions under the Debt Service Guarantee to cover the debt service payment due on December 2016. Total debt service payments
during 2016 totaled US$356 million.



The current credit agreements include a mechanism
to exit the project finance by transferring the debt at the level of Ecopetrol S.A., either by (i) the occurrence of a Mandatory
Debt Assumption Event or (ii) a Voluntary Debt Assumption; as defined in said agreements.



In total, the Reficar modernization project
has had capital expenditure needs of US$7,867 million of a total capital expenditures approval of US$8,016 million.



| | 3.6.1.3 | Polipropileno del Caribe S.A.
| | ------- | -----------------------------



During 2016, Propilco production totaled 445
thousand tons of petrochemical products, a 2.5% increase compared to the 434 thousand tons produced in 2015, due to higher sales
volumes explained by greater competitiveness in the local market. The total contribution margin in 2016 (including the contribution
of polypropylene, polyethylene and masterbatches) was 9% higher than in 2015, an increase from US$293 per ton in 2015 to US$318
per ton in 2016. The increase in contribution margin was primarily due to the execution of a new commercial strategy focused on
differentiation and value-added products and services.



Table 38 – Operating Capacity of
Propilco



|                 |  | For the year ended December 31, |        
|---------------- |  | ------------------------------- | -------
|                 |  | 2016                            |        
|                 |  | (Metric Tons)                   |        
|Average capacity |  |                                 | 470,000
|Throughput       |  |                                 | 444,812
|% Use            |  |                                 | 95     



| | 3.6.1.4 | Biofuels
| | ------- | --------



We have investments in two biofuels companies: (i) Bioenergy S.A.,
in which we own 98.6% of the shares, currently advancing on the construction of an ethanol plant with theoretical capacity of 480,000
liters / day, and (ii) Ecodiesel S.A., in which we own 50% of the shares, currently in operations with a theoretical capacity of
100,000 tons per year of biodiesel.





43







| | 3.6.2 | Marketing and Supply of Refined Products
| | ----- | ----------------------------------------



We are the main producer and supplier of refined
products in Colombia. We market a full range of refined and feedstock products including regular and high-octane gasoline, diesel
fuel, jet fuel, natural gas and petrochemical products, among others.



| | 3.7 | Research and Development; Intellectual Property
| | --- | -----------------------------------------------



The Colombian Petroleum Institute, the innovation
and technology center of Ecopetrol, was created in June 1985 to add value to our business segments through innovation and the development
of technologies and competitive advantages.



The focus of technology development is on designing
high added-value products and solutions for Ecopetrol and the Colombian oil industry. The scope of the Colombian Petroleum Institute
activities covers all of our value chain segments: exploration, production, refining, transportation and commercialization, as
well as environmental sustainability, asset integrity and automation. Each year Ecopetrol presents to the Colombian Institute for
the Development of Science and Technology (Instituto Colombiano para el Desarrollo de la Ciencia y la Tecnología,
or COLCIENCIAS) its research, technology development projects and innovation initiatives, in order to obtain certifications for
its science and technology investments. COLCIENCIAS certifies science and technology investments, which are deductible from income
tax upon execution; and Ecopetrol takes advantage of that tax benefit. In 2016, we obtained US$5.6 million in science and technology-related
tax benefits certified by COLCIENCIAS.



Our intellectual capital is preserved through
a technological value-generation process and an intellectual property protection process, which include the consolidation of trade
secrets, patents, copyrights, trademarks, industrial designs, and publications in specialized journals. Ecopetrol has filed 194
patent applications in the last ten years, 12 of them in 2016. Our most recent patent applications include innovative technologies
such as (i) a catalyst to efficiently upgrade heavy oil residues in a slurry-type hydrocracking reactor; (ii) a system for the
early prediction of production events that are likely to trigger artificial lift system failures that may be avoidable; (iii) an
intelligent tool to locate restrictions in pipelines; and (iv) two methods to obtain nanotechnology-based fluids, to prevent the
flocculation of asphaltenes around the wellbore, and to break down emulsions, respectively. In 2016, Ecopetrol declared three industrial
secrets that strengthen its competitive advantages in exploration of Colombian basins.



In 2016, Colombian and international authorities
granted us 10 new patents. We currently hold 79 patents in Colombia, the United States, Mexico, Russia, Peru, Venezuela, Ecuador,
Brazil, Nigeria, Indonesia, and Malaysia.



In 2016, Ecopetrol S.A. licensed twelve (12)
of its technologies to private companies for manufacturing, marketing commercialization, and after-sales support. To date, we have
licensed 28 technologies to Colombian and multi-national companies. These licensed technological products have been tested and
successfully used in our organization to solve problems related to refining, production and transportation of hydrocarbons, and
some have potential uses in other industries.



| | 3.8 | Applicable Laws and Regulations
| | --- | -------------------------------



| | 3.8.1 | Regulation of Exploration and Production Activities
| | ----- | ---------------------------------------------------



| | 3.8.1.1 | Business Regulation
| | ------- | -------------------



Pursuant to the Colombian Constitution, the
Nation is the exclusive owner of all hydrocarbon resources located in Colombia and has full authority to determine the rights to
be held and royalties or compensation to be paid by investors for the exploration or production of any hydrocarbon reserves. The
Ministry of Mines and Energy and the ANH are the authorities responsible for regulating all activities related to the exploration
and production of hydrocarbons in Colombia.





44







Decree Law 1056 of 1953 (the Petroleum Code,
or Código de Petróleos) declares that the hydrocarbon industry and its activities of exploration, exploitation,
refinement, transportation and distribution are of public interest, which means that, in the interest of the hydrocarbon industry,
the Colombian government may order necessary expropriations in order to develop such industry. The hydrocarbon industry is under
governmental supervision and control, regulated mainly by the Ministry of Mines and Energy and the ANH.



Ministry of Mines and Energy Resolution 181495
of 2009, as amended by Resolution 40048 of 2015, establishes a series of regulations regarding hydrocarbon exploration and production.



Ministry of Mines and Energy Resolution 180742
of 2012, partially repealed by Resolution 90341 of 2014, included a series of technical regulations for unconventional hydrocarbon
resources, including the procedures for advancing the exploration and exploitation of unconventional reserves. It also establishes
the types of wells and their classification as well as the fulfillment of those minimum (drilling and abandoning) conditions, necessary
to initiate or perform E&P activities. Furthermore, it contemplates the applicable procedure to resolve disputes between mining
sector and the oil and gas sector, regarding the coexistence of their rights in some specific projects.



On May 26, 2015, the Ministry of Mines and
Energy issued Decree 1073 which compiles the majority of Colombian decrees and regulations in force regarding the administrative
sector of mines and energy.



Agreement (Acuerdo,a type of
regulation) 004 of 2012, as issued by the ANH, amends Agreement 008 of 2004 and sets forth the rules governing the award of exploration
and production areas and the execution of contracts.



Agreement 003 of 2014, as issued by the ANH,
complements Agreement 004 of 2012 by setting forth the contractual framework for the carrying out of activities in unconventional
reservoirs, the procurement regulations for the exploration and exploitation of unconventional fields and the procurement process
for the awarding of hydrocarbon exploration and exploitation areas.



Agreement 002 of 2015, as issued by the ANH,
partially amends Agreement 004 of 2012 and sets forth the initial rules and measures the Government can take to mitigate the adverse
effects of the decline of international oil prices. The main measures established by this agreement are the following:



| | (i) | The extension of terms and deadlines for the execution of activities related to investments in
exploration and evaluation phases and for the declaration of commercial discoveries;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | The establishment of procedures to transfer investments in exploration programs between allocated
areas: and
| | ---- | ------------------------------------------------------------------------------------------------------------



| | (iii) | The levelling of the contractual terms of offshore contracts entered before 2014 to the ones included
in the contracts executed as a result of the 2014 Colombian Round.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Agreement 003 of 2015, as issued by the ANH,
modifies and also partially amends Agreement 004 of 2012, and provides certain rules and measures the Government can take to mitigate
the adverse effects of the decline of international oil prices. This agreement permits performance guarantees required under E&P
contracts to be reduced in the same amount as the works actually performed during the term of the respective phase.



Agreement 004 of 2015, as issued by the ANH,
also partially amends Agreement 004 of 2012, and provides certain rules and measures for the Government to mitigate the adverse
effects of the decline of international oil prices. This agreement allows contractors to attribute additional activities carried
out under a TEA to commitments under the first phase of an E&P contract.



| | 3.8.1.1.1. | Environmental Licensing and Prior Consultation
| | ---------- | ----------------------------------------------



Law 99 of 1993 and other environmental regulations,
such as particularly Decree 1076 of 2015, impose on companies, including oil and gas companies, the obligation to obtain an environmental
license prior to undertaking any activity that may result in the serious deterioration of renewable natural resources, or that
may have the capacity of materially modifying the physical environment.





45







The National Authority on Environmental Licensing
(ANLA), created by means of Decree 3573 of 2011, is the entity responsible for evaluating the applications and issuing the environmental
licenses for oil & gas-related activities, as well as surveilling and overseeing all hydrocarbons projects and monitoring the
environmental compliance of such activities.



If the projects or activities could have a
direct impact over the territories or the interests of indigenous, Afro-Colombian or Raizal communities, the Colombian Constitution
provides that the companies developing such projects or activities must undertake a public consultation process with those communities
before initiating such projects or activities. This consultation process is a pre-requisite for obtaining the required environmental
licenses.



In addition, the Colombian Constitution and
laws establish that, as part of the public participation mechanisms, Colombian individuals may request information regarding the
activities of the project and their potential impacts. They may also request to undertake an environmental hearing so as to obtain
information of the project subject to environmental licensing.



On May 26, 2015, the Ministry of Environment
and Sustainable Development issued Decree 1076, which compiles the majority of Colombian regulations in force regarding environment
and sustainable development.



The environmental license encompasses all of
the necessary permits, authorizations, concessions and other control instruments necessary under Colombian environmental law to
undertake a project or activity that may result in the serious deterioration of renewable natural resources, or that have the capacity
of materially modifying the physical environment. The license shall define specific conditions under which the beneficiary of the
license may undertake such project or activity. The procedure to obtain an environmental license begins when the company files
an Environmental Impact Study (EIA) related to the project before the ANLA. The licensing process includes an application for the
use of natural renewable resources (water, soil and air), the filing of an EIA and a plan to prevent, mitigate, correct and compensate
for any activity that may harm the environment, known as the Environmental Management Plan (PMA).



A new environmental licensing procedure came
into force in Colombia on January 1, 2015 as a result of the enactment of Decree 2041 of 2014, which now is compiled by Decree
1076 of May 26, 2015, repealing the licensing process defined in decree 2820 of 2010. According to the regulation currently in effect,
the procedure to obtain an environmental license shall not take more than 90 business days but, depending on the complexity of
the information requested by the ANLA and administrative delays, including an oral hearing to determine the viability of the project,
the procedure may take between 165 and 265 business days, depending on whether the applicant is required to file additional information.
The new procedure incorporates an oral hearing between the ANLA and the applicant in order to evaluate the information provided
in the license application and whether it is necessary to request additional information about the proposed project. The ANLA will
have no other opportunities to request additional information after this hearing.



The Ministry of Environment and Sustainable
Development is also responsible for establishing guidelines regarding climate change policies for the hydrocarbon sector in Colombia.
We are in compliance with those guidelines. At present, the Ministry of Environment and Sustainable Development has not proposed
any specific steps for the implementation of the Kyoto Protocol or the Paris Agreement, as they relate to our operations. We are
continuously monitoring climate change requirements that could be applicable to us. A company that does not comply with the applicable
environmental laws and regulations, does not execute the Environmental Management Plan (PMA) approved by the environmental authority
or ignores the requirements imposed by an environmental license may be subject to an administrative proceeding initiated by the
ANLA or the regional environmental authorities established by Law 1333 of 2009. The proceeding may result in oral or written warnings,
monetary penalties, fines, license revocation or the temporary or permanent suspension of the activity being undertaken. Apart
from administrative sanctions, the Colombian judiciary or other law enforcement authorities may also impose civil and even criminal
sanctions if environmental damages are verified as a consequence of having breached the environmental laws and regulations applicable
to the project.



| | 3.8.1.1.2. | Royalties
| | ---------- | ---------



In Colombia, the Nation is the owner of minerals
and non-renewable resources located in the subsoil, including hydrocarbons. Thus, companies engaged in exploration and production
of hydrocarbons, such as Ecopetrol, must pay to the National Hydrocarbons Agency (ANH), as representative of the National Government
of Colombia, a royalty on the production volume of each production field, as determined by the ANH.





46







Royalties may be paid in kind or in cash. Each
production contract has its applicable royalty arrangement in accordance with applicable law. In 1999, a modification to the royalty
regime established a sliding scale for royalty payments for crude oil and natural gas production fields discovered after July 29,
1999 and depending on the quality of the crude oil produced. Since 2002, as a result of the enactment of Law 756 of 2002, the royalty
rate was fixed as a sliding scale depending on the produced volume from 8% for fields producing up to five thousand bpd to 25%
for fields producing in excess of 600 thousand bpd. Changes in the royalty regime only apply to new discoveries and do not apply
to fields already in the production stage as of July 29, 1999. Producing fields pay royalties in accordance with the royalty
law in force at the time of the discovery.



Regarding natural gas, in accordance with Resolution
877 of 2013, as amended by Resolution 640 of 2014, starting on January 1, 2014, the ANH has received royalties in cash rather
than in kind. Thus, the producer may dispose of its gas production volumes corresponding to royalties paid in cash.



| | 3.8.2 | Regulation of Transportation Activities
| | ----- | ---------------------------------------



Hydrocarbon transportation activity is considered
a public interest activity in Colombia and a public service. As such, it is under governmental supervision and control, regulated
mainly by the Ministry of Mines and Energy and CREG.



Transportation and distribution of crude oil,
liquefied petroleum gas and refined products must comply with the Petroleum Code, the Code of Commerce and all governmental decrees
and resolutions. According to Law 681 of 2001, multipurpose pipelines owned by Ecopetrol (through Cenit) must be open to third-party
use on the basis of equal access to all.



Notwithstanding the general rules for hydrocarbon
transportation in Colombia, natural gas transportation is subject to regulations specific to the natural gas industry as issued
by CREG, due to the categorization of natural gas distribution as a public interest activity under Colombian laws.



Transportation systems, classified as crude
oil pipelines and refined product pipelines, may be owned by private parties. Pipeline construction, operation and maintenance
must comply with environmental, social, technical and economic requirements under national guidelines and international standards
for the oil and gas industry.



Construction of transportation systems requires
licenses and local permits awarded by the Ministry of Mines and Energy, the Ministry of Environment and Sustainable Development
and regional environmental authorities, respectively.



Crude oil transport



The regulatory framework relating to crude
oil transportation accounts for both private use and public use pipelines. Private use pipelines are those built by the operating
or refining entity for its own exclusive right and that of its affiliates. Public access pipelines are defined as pipelines built
and operated by a public or private legal entity, for the purpose of publicly providing crude oil transportation services. The
Colombian government, through the ANH, has a preferential right to use up to 20% of the total capacity of any public or private
access pipeline to transport its share of production. However, for both private and public access pipelines, the ANH must pay the
tariff for the pipeline use to transport its percentage of production.



The Ministry of Mines and Energy is responsible
for reviewing and approving the design of and tracks for crude oil pipelines, by establishing transport rates based on information
provided by the service providers. It also oversees the calculation and payment of hydrocarbon transport-related taxes and manages
the information system for the oil product distribution chain.





47







In 2014, the Ministry updated the transport
regulation and the rate calculation method for this line of business. It introduced a framework for the secondary market and incentives
for new pipeline construction and current pipeline capacity expansions. According to the Petroleum Code, rates are to be revised
every four years. During the scheduled revision of 2015 and due to the dramatic changes in international crude oil prices, the
Ministry of Mines and Energy allowed, by means of Resolution 31 325 of 2015, transportation companies and oil production companies
to engage in direct negotiations in order to agree on a tariff suitable for both parties. The negotiation period was extended until
June 2016. Notwithstanding the fact that tariff agreements were reached with certain companies, the results of the negotiations
were not positive. Thus, tariffs were set by the Ministry of Mines and Energy in accordance with the criteria previously established
by Resolution 72146 of 2014, latterly amended by Resolution 31325 of 2015.



The Port Superintendence is the authority that
oversees the port business for crude oil and refined products. Although this business is not highly regulated, market participants
are required to report certain information to the Port Superintendence.



As a result of the enactment of Decree 119
of 2015, operators of private use hydrocarbon ports are currently able to provide hydrocarbon transport services to third parties
pursuant to a mechanism established under that decree.



Refined products transport



In 2014 CREG assumed responsibility for regulating
product pipeline transportation from the Ministry of Mines and Energy, in addition to its pre-existing regulatory responsibility
for liquefied petroleum gas, natural gas and electric energy transportation.



CREG is in the process of defining and introducing
the transportation regulation and the rate calculation method for refined products. On September 25, 2015, CREG published a draft
resolution that established the proposed regulations for transport of liquid fuels and liquefied petroleum gas. The primary goals
and components of the proposed regulation are: a) to ensure access to the transport systems for liquid fuels and the LPG pipeline
systems without discrimination; b) to promote the timely expansion of the transport system in line with the needs of the market;
c) to promote competition and prevent restrictive practices; d) to separate the operations of refining and transport;
and e) to ensure the efficient and continuous operation of transport systems. Currently, CREG continues with the task of drafting
this regulation.



| | 3.8.3 | Regulation of Refining and Petrochemical Activities
| | ----- | ---------------------------------------------------



Article 58 of the Petroleum Code establishes
that oil refining activities can be developed throughout the Colombian territory and are not reserved to the State. However, Article
4 establishes that such activities are considered of public interest subject to governmental regulation, and the development of
those activities must comply with technical requirements established by regulation.



In 2008, Law 1205 was issued with the main
purpose of contributing to a cleaner environment. It established the minimum quality specifications for fuels in Colombia. Since
August 2010, Ecopetrol has been selling diesel and gasoline at its refinery in Barrancabermeja in order to produce diesel
and gasoline that complies with the requirements of the aforementioned law.



| | 3.8.3.1 | Regulation of Liquefied Petroleum Gas (LPG) and Liquid Fuels
| | ------- | ------------------------------------------------------------



Wholesale marketing, transport, distribution
and retail marketing of LPG are mainly regulated by CREG Resolution 74 of 1996, and subsequent resolutions. LPG in Colombia is
primarily obtained through Ecopetrol’s refineries, field production and imports. The LPG must meet minimum quality standards
to be marketed. Our marketing activities are regulated by Resolution 53 of 2011 (as amended by Resolutions 108 of 2011, 154 of
2014, 019 of 2015, and 034, 063 and 064 of 2016). The LPG price is regulated by CREG Resolutions 66 of 2007 (as amended by Resolutions
59 of 2008, 002 of  2009, 123 of 2010, 095 of 2011, 65 and 129 of 2016).



According to Article 212 of the Petroleum Code
and Law 39 of 1987 (added by Law 26 of 1989), the distribution of liquid fuels and their derivatives is considered a public utility.
Consequently, individuals or entities engaged in these activities are subject to regulations issued by the Colombian government.
The Government has the power to determine quality standards, measurement and control of liquid fuels, and establish penalties that
may apply to dealers who do not operate in compliance therewith.





48







The Ministry of Mines and Energy is the entity
that controls and exercises technical supervision over the distribution of liquid fuels derived from petroleum, including the refining,
import, storage, transportation and distribution in the country. Law 812 of 2003 identified the agents of the supply chain of petroleum-based
liquid fuels.



The distribution of liquid fuels, except LPG,
is governed by Decree 1073 of 2015, which establishes the requirements, obligations and penalties applicable to supply agents in
the distribution, refining, import, storage, wholesale, transportation, retail sale and consumption of liquid fuels.



Decree 1073 of 2015 establishes the minimum
technical requirements for the construction of storage plants and service stations. This Decree also regulates the distribution
of liquid fuels, establishing the minimum requirements for distributors and the activities and types of agreements permitted for
these agents. The Ministry of Mines and Energy also regulates the types of liquid fuels that can be sold and purchased and the
penalties for noncompliance with governmental regulations.



Pursuant to Law 1430 of 2010, the distribution
of fuels in areas near Colombian borders is the responsibility of the Ministry of Mines and Energy and is subject to specific regulations
that impose strong control procedures and requirements. The Ministry of Mines and Energy establishes the safety standards for LPG,
storage equipment, maintenance and distribution of LPG. Resolution 31514 of 1992 established that any LPG household, commercial
and industrial facility with a storage capacity of LPG greater than 420 pounds must receive an authorization from the Ministry
of Mines and Energy prior to commencing operations.



The Domestic Public Service Superintendence
also oversees the liquefied petroleum gas transportation business. Cenit reports key operational and financial indicators to it
on a monthly basis.



| | 3.8.3.2 | Regulation Concerning Production and Prices
| | ------- | -------------------------------------------



According to the Decree - Law 4130 of 2011,
CREG is in charge of setting the prices of petroleum by-products throughout the entire chain of production and distribution except
for current gasoline engine, diesel and biofuels. On the other hand, by Decree 381 of 2012, as amended by Decree 1617 of 2013,
the Ministry of Mines and Energy is in charge of setting the methodology to determine the reference price of gasoline, diesel (ACPM),
biofuels and mixtures thereof.



Then, since May 2012, CREG fixes the prices
for most crude oil by-products, but for gasoline, diesel, ACPM and biofuels. CREG determines the methodology to calculate their
price while the Ministry of Mines and Energy fixes the relevant prices in accordance with said methodology. The ANH does not intervene
in the definition of prices of gasoline and diesel fuel.



The methodology for calculating jet fuel prices
is set out in Law 1450 of 2011, and jet fuel prices themselves are set by the Ministry of Mines and Energy.



The ANH determines the formula that is used
to calculate royalty payments corresponding to the production of crude oil and the crude oil price reference for local refining.



Decree 381 of 2012 and 1617 of 2013, as amended
by Decree 2881 of 2013, restructured the Ministry of Mines and Energy and gave it the responsibility to study industry problems
and implement short- and long-term refining planning policies.  The Ministry is also responsible for establishing the governmental
policies and goals to ensure the reliability, stability and continuity for the production of liquid fuels, biofuels and others.



Pursuant to Article 58 of the Petroleum Code,
any refining company operating in Colombia must provide a portion or, if needed, the total of its production to supply local demand
prior to exporting any production.  If local demand increases, and imported crudes are needed, the refining company may charge
the State additional transportation costs in proportion to the imported crudes delivered to the refinery.



The Fuel Price Stabilization Fund (FEPC) was
created by means of Law 1151 of 2007 with the aim to mitigate, in the domestic market, the impact of fluctuations in fuel prices
(gasoline and motor fuel oil) in international markets.  As per article 2.3.4.1.3 of Decree 1068 of 2015, the funding for
the operation of the FEPC comes from the following sources: (i) financial returns on the funds of the FEPC; (ii) extraordinary
contributions from the National Treasury; and (iii) resources from the General Budget of Colombia.





49







The FEPC is currently regulated by Decree 1068
of 2015, which compiles Decree 1880 of 2014, and sets forth the calculation method of the Differential as the product of the volume
reported by the refiner and/or importer to the Ministry of Mines and Energy times the difference between the international parity
price and the reference price.  It also provides that refiners and/or importers shall submit monthly reports to the Ministry
of Mines and Energy on the volume, origin and type of fuel (gasoline and motor fuel oil) sold in the domestic market for said period.



Based on those reports, the Ministry of Mines
and Energy shall calculate and liquidate the Net Position every six months by issuing a resolution provided, however, that such
Net Position results from the sum of the differentials for the relevant six-month period.  Decree 1068 of 2015 also provides
that the FEPC shall pay in Colombian Pesos the value corresponding to the six-month Net Position of each refiner and/or importer
within the term that the Ministry of Mines and Energy establishes and based on availability of resources of the FEPC. For more
information regarding the FEPC and Ecopetrol, see the section 5.1.2.



By Resolution 31356 of 2016, the Ministry of
Mines and Energy liquidated the net positions for Ecopetrol corresponding to December 23 to 31, 2014 and the first and second quarters
of 2015, establishing that Ecopetrol must pay to FEPC COP$114,172,749,145.09 as a contribution differential; Ecopetrol appealed
but the Ministry of Mines and Energy confirmed its decision by Resolution 31121 of 2017.



By Resolution 31127 of 2017, the Ministry of
Mines and Energy liquidated the net position for the third quarter of 2015 and October 1 to November 25, 2015, establishing that
FEPC must pay to Ecopetrol COP$318,638,400,647.33.



By Resolution 31128 the Ministry of Mines and
Energy liquidated the net position for Ecopetrol corresponding to November 26 to December 31, 2015 and the first half of 2016 establishing
that FEPC must pay to Ecopetrol COP$338,252,758,969.68.



As of the date of this annual report, the Ministry
of Mines and Energy has not calculated or liquidated the Net Position for each fuel (gasoline and motor fuel oil) to be paid by
the FEPC to Ecopetrol for its sales during the second half of 2016.



Recently, Law 1819 of December 29, 2016, created
a contribution to finance the FEPC which will come from the sales in Colombia of gasoline or ACPM by the refiner or importer to
the wholesale distributor, on the basis of the differential between the international parity price and the reference price.



The Ministry of Mines and Energy will
exercise the functions of control, management, settlement, determination, discussion and collection of the contribution. In
particular, it will calculate the contribution to the FEPC through the liquidation of the quarterly Net Position of each
refiner or importer with respect to the FEPC based on the reporting of information that refiners and/or importers
present.



| | 3.8.3.3 | Regulation of Biofuel and Related Activities
| | ------- | --------------------------------------------



The sale and distribution of biofuels is regulated
by the Ministry of Mines and Energy. Regulations establish the quality and pricing standards for biofuels and impose minimum requirements
for mixing ethanol with gasoline and biodiesel with diesel.



The sale and distribution of biofuels is provided
under CREG Resolution 240 of 2016, which particularly regulates: a) sorts of market that will be served with biogas and biomethane;
b) quality and safety conditions; and c) tariff regime (article 2). Pursuant to article 4 of the before mentioned Resolution, biogas
supply through isolated networks to serve non-regulated users and natural gas vehicles (“GNV” as per its Spanish acronym),
shall be incorporated as a public utility company. Furthermore, article 5 provides that biomethane supply through isolated networks
or interconnected networks to the National Transportation System shall also be incorporated as a public utility company. Finally,
article 12 states that biogas suppliers may develop the production, transportation, distribution and commercialization activities
through integrated structures, provided that they keep separate accounts for each activity and grant free access to the networks
to both regulated and non-regulated users. In the same way, production, distribution and commercialization of biomethane through
interconnected networks to the National Transportation System may be developed through integrated structures as long as the supplier
keeps separate accounts for each activity and grants free access to the networks to both regulated and non-regulated users.





50







| | 3.8.4 | Regulation of the Natural Gas Market
| | ----- | ------------------------------------



Decree 1073 of 2015, issued by the Ministry
of Mines and Energy, established that all producers have to issue a production statement that includes the volumes of natural gas
available for sale for a period of ten years.  This decree established the regime for the selling and marketing of natural
gas in Colombia, including specific procedures that regulate the Colombian market in order to manage the remaining natural gas
reserves owned by the Nation, and to protect domestic consumers, especially residential consumers, by prioritizing delivery of
gas to residential consumers, regulating the export of natural gas and setting forth the export restrictions applicable during
an internal shortage of natural gas.



Currently in Colombia, other than with respect
to the Opón field, the price of natural gas is determined by the market.



CREG issued Resolutions 088 of 2013 and 089
of 2013 (amended by CREG Resolutions 204 of 2013, 089 and 122 of 2014, 022, 032, 088, 105, 139, 143, and 218 of 2015, 137 and 070
of 2016 and 001 of 2017) that established the procedures for marketing natural gas in Colombia.  However, pursuant to Decree
1073 of 2015, such procedures do not apply to the following activities: a) natural gas exports; b) natural gas as raw material
in petrochemical production; c) natural gas commercialization from minor fields (production capacity under 30 million cfpd);
d) natural gas commercialization from hydrocarbon fields under testing phase or which have not yet been declared commercially viable;
e) natural gas commercialization from unconventional reservoirs; and f) internal consumption from natural gas producers.



CREG determines which agents can participate
in the primary and secondary markets.  Ecopetrol is authorized to participate as a seller in the primary market as a natural
gas producer and as a buyer in the secondary market when Ecopetrol requires natural gas from other producers for its own needs. 
CREG regulations provide that a natural gas producer cannot participate as a merchant of natural gas in the secondary market except
that it may purchase gas to meet its existing contractual obligations.  Ecopetrol is also able to re-sell available natural
gas transportation capacity into the secondary market.



Priority for the Supply of Natural Gas



The export of natural gas, in contrast, is
not considered a public utility activity under Colombian law and therefore is not subject to Law 142 of 1994.  Nevertheless,
the internal supply of natural gas is a priority for the Colombian government and is considered to be a public utility complementary
activity, and therefore public utility regulations apply to the internal supply of natural gas.



Decree 1073 of 2015 (amended by Decree 2345
of 2015) provides that in the event the supply of natural gas is reduced or halted as a result of a shortage, the Colombian government
has the right to suspend the supply of natural gas for exportation.  If such export contracts are suspended by the Colombian
government, the export agents are entitled to receive compensation in accordance to article 2.2.2.2.15 and 2.2.2.2.38 of Decree
1073, 2015.  Notwithstanding the foregoing, Decree 1073 of 2015 establishes freedom to export natural gas under normal gas-reserve
conditions.  Producers of natural gas may enter into natural gas export contracts if the ratio of proved reserves to consumption
exceeds seven years, as determined by the Colombian Energy Planning Authority (or UPME for its Colombian acronym).



Decree 1073 of 2015 (amended by Decree 2345
of 2015) establishes an order of supply when restrictions are placed on the supply of natural gas or serious emergency situations
arise that preclude the continued provision of certain services, as follows: (i) essential demand, as established in Decree 1073
of 2015, (ii) non-essential demand under an existing agreement with a warranty of uninterrupted provision, and (iii) fair exports
delivery.



The order of priority for the supply of natural
gas is as follows: (i) the operation of the compressor stations of the National Transportation System, (ii) residential users and
small business users engaged in the distribution network, (iii) vehicular compressed natural gas and (iv) gas refineries, excluding
those destined for self-generation of electricity that can be replaced with energy from National Transportation System, which has
first priority.  The Ministry of Mines and Energy also establishes distribution priorities in the event of a natural gas shortfall
derived from supply or infrastructure issues.  This order of priority is based on the type of contract, with firm supply contracts
having priority over interruptible supply contracts.





51







Decree 1073 of 2015 and CREG Resolutions 089
of 2013 and 204 of 2013 provide specific procedures and forms of supply agreements determined by CREG pursuant to which an agent
may sell and buy natural gas in the Colombian primary and secondary market produced from large fields (capacity of more than 30 million
cfpd).  Decree 1073 of 2015 and CREG Resolution 089 of 2013 permits the sale of natural gas from small fields (capacity under
30 million cfpd) pursuant to contracts that fulfill certain regulatory requirements but whose form is not prescribed by law.



| | 3.9 | Sustainability Initiatives
| | --- | --------------------------



| | 3.9.1 | HSE
| | ----- | ---



This section describes the health, safety and
environmental (HSE) practices of Ecopetrol S.A. Currently, subsidiaries of Ecopetrol S.A. establish their own HSE models, provided
that these models must be consistent with guidelines established by Ecopetrol S.A.



| | 3.9.1.1 | Ecopetrol S.A.
| | ------- | --------------



One of the principles that guide Ecopetrol
is our commitment to our employees and the development of those communities in which we operate. For that reason, Ecopetrol S.A.
is devoted to improving our health, safety and environmental (HSE) practices.



We have several programs in place aimed at
increasing the safety of our industrial processes and minimizing the number of occupational accidents and other major incidents.
Our HSE management model is based on key focus areas that are aligned with our integrated management system.







The results of the HSE strategies in 2016,
compared with the prior year, were:



| | · | A 25% decrease in road accidents, due to improvements in real-time monitoring of drivers’
safety habits, an increase in control check points for tracking tankers and awareness campaigns for drivers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Improved performance during maintenance activities, in order to ensure proper safety practices.
| | - | -----------------------------------------------------------------------------------------------



| | · | 16,287 training sessions related to 885 critical procedures for our workers.
| | - | ----------------------------------------------------------------------------



| | · | A 25% decrease in the number of incidents involving employee or contractor injuries that require
medical treatment or time off.
| | - | -------------------------------------------------------------------------------------------------------------------------------



| | · | A reduction in the severity of occupational incidents.
| | - | ------------------------------------------------------



| | · | A reduction in oil spills.
| | - | --------------------------



| | · | Improvement in reporting of minor oil spills and identification of their causes.
| | - | --------------------------------------------------------------------------------



Contingency Plans and Environmental
Remediation



All of our operational areas have preparedness
and emergency response plans, each in accordance with Colombian legal requirements and our new internal guidelines for emergency
management.





52







Our preparedness and emergency response plans
have been developed based on our analysis of risk scenarios, the estimated consequences of these events and the implementation
of strategies to be followed in response to each scenario.



The objectives of our contingency plans are
to:



| | · | Protect the health and safety of our workers, contractors and the communities in which we operate.
| | - | --------------------------------------------------------------------------------------------------



| | · | Prevent oil spills and leaks of harmful substances in offshore and onshore areas, fires and explosions
and mitigating environmental impacts.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



Our contingency plan includes:



| | · | Procedures for the containment of oil and other harmful substances, as well as procedures to safeguard
the safety of affected communities and the personnel involved in such containment actions.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Strategies for responding to emergencies located outside of our facilities and mutual aid emergency
plans, including actions developed with local environmental authorities, stakeholders, the local community and other organizations
for containment and recovery of spilled product, and cleaning and recovery of affected areas, monitoring of the environmental effects
and compensation for local communities and other affected persons.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Further, we are upgrading the skills of our
fire brigade, ensuring the reliability of firefighting and emergency equipment and working on improving our performance during
drills.



In offshore operations, our operator has the
responsibility of designing and implementing plans and strategies aligned with international best practices that cover various
emergency response scenarios.



Total Recordable Incident Rate –
Employees and Contractors



Ecopetrol S.A. places an important emphasis
on understanding, monitoring and controlling our impacts on workers and contractors.



Ecopetrol S.A. monitors a standard measure
of occupational safety known as the Total Recordable Incidents Frequency Index (TRIF), which represents the number of employee
or contractor injuries that require medical treatment or time off for every million hours worked.



TRIF has improved from 4.28 incidents per million
hours worked in 2010 to 1.09 in 2016. In 2016, 28% of occupational accidents affecting our employees and contractors resulted in
a medical treatment, restricted work or time away from work that lasted for three days or less. Additionally, we had a 38% reduction
in occupational incidents compared to 2015 as a result of the sustained implementation of the HSE management system.



Graph 7 – Total Recordable Incident
Rate – Employees andContractors (*) (**)












| | * | Number of employee or contractor injuries requiring medical treatment or time off for every million
hours worked
| | - | ----------------------------------------------------------------------------------------------------------------



| | ** | Includes data for Ecopetrol S.A. and the Vice-Presidency of Transport and Logistics, but does not
include data for subsidiaries of Ecopetrol S.A.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------





53







Frequency of process safety incidents



Our “Process Safety Management”
(PSM) strategy is to: first, define high-risk processes; second, prioritize intervention in high-risk processes; and third, apply
all PSM elements in the prioritized high-risk processes.



Loss of primary containment is the number of
unplanned or uncontrolled releases of oil, gas or other hazardous materials.



We report Tier 1 process safety events per
million hours worked, which are the losses of primary containment of greatest consequence causing harm to a member of the workforce,
costly damage to equipment or exceeding defined quantities according to API-754.  We reduced our Tier 1 process safety indicator
by 33% compared to 2015 (2016: 0.06 and 2015: 0.09).  The reporting thresholds for API-754 Tier 1 is an unplanned or uncontrolled
release of any material, including non-toxic and non-flammable materials, from a process that results in one or more health, safety
or environmental consequences set forth under those guidelines. In 2016, there were 0.06 Tier 1 process safety incidents per million
hours worked.



Frequency of Tier 1 process safety incidents
per hours worked (per million hours worked):



Graph 8 – Tier 1 Process Safety Incidents
(*) (**)














| | * | Tier 1 process safety incidents per million hours worked (API-754)
| | - | ------------------------------------------------------------------



| | ** | Includes data for Ecopetrol S.A. and the Vice-Presidency of Transport and Logistics classified
according to the criteria in API-754 Tier 1, but does not include figures for Ecopetrol S.A.’s subsidiaries.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Environmental Incidents



In 2016, Ecopetrol S.A. recorded 8 environmental
incidents compared with 11 in 2015 and 29 in 2014. The volume of oil spills was 202 barrels in 2016, a decrease from 207 barrels
in 2015 and 885 barrels in 2014. The decrease in the numbers of environmental incidents and oil spills was the result of the identification
of critical equipment operating in high or very high risk conditions, and the implementation of asset integrity plans designed
to mitigate those risk conditions.



| | 3.9.1.2 | Cenit
| | ------- | -----



While Cenit had previously followed Ecopetrol’s
HSE guidelines, in 2015, Cenit established its own HSE practice and set and defined its own HSE Key Performance Indicators (KPIs)
and targets in respect of its non-operative facilities and offices. This resulted in significant cost reductions with no change
in risk levels in 2015 and 2016. Local and field operations, however, are still conducted under Ecopetrol’s HSE model and
guidelines.



Cenit intends to implement its own HSE Management
System based on Decree 1072 of 2015 during the first half of 2017. Cenit is also leading the definition of HSE KPIs with all of
the midstream subsidiaries to be able to measure the transportation business as a whole and share the lessons learned and best
practices within the industry.





54







| | 3.9.1.3 | Refinería de Cartagena
| | ------- | ----------------------



In 2016, around 10.4 million man-hours were
employed conducting Reficar’s business activities. Our HSE performance indicators for Total Recordable Cases (TRIF), Process
Safety Incident (ISP) and Environmental Incident (EI) were well-within our established guidelines.



The following table covers Reficar ́s
Total Recordable Cases (TRIF) for 2015 and 2016, which includes Ecopetrol Operation and Maintenance (O&M), Reficar and subcontractors.
The table presents statistics related to construction, pre-commissioning, start-up and operating activities. Reficar reported more
than 145 million man-hours without fatalities (accidents that caused deaths) during the period 2010-2016.



Table 39 – Performance Indicators



|METRIC                          |  | 2016 |            |  | 2015(1) | 
|------------------------------- |  | ---- | ---------- |  | ------- | 
|Man-hours                       |  |      | 10,351,896 |  |         | 
|Recordable accidents            |  |      | 29         |  |         | 
|Total recordable cases (TRIF)*  |  |      | 2.80       |  |         | 
|Environmental Incidents (EI)    |  |      | 0          |  |         | 
|Process Safety Incidents (ISP)* |  |      | 0.19       |  |         | 








(1) In our annual report on Form
20-F for 2015, man hours and accidents corresponding to Reficar’s construction stage were reported. This report registers
man hours and accidents of 2015 corresponding to the entire operation of the Refinery.

* In the second half of 2016, these risks were
associated with the new stage of operation of the units while in 2015 they were associated with the construction, commissioning,
precomissioning and start-up of the new refinery.



The results of other related performance indicators
during 2016 were:



| | · | Lost Time Injury Incidents: 12 incidents, which include eight for Ecopetrol O&M and four incidents
for Reficar and subcontractors.
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| | · | Medical Treatment Injury: six incidents, which include four for Ecopetrol O&M, and two incidents
for Reficar and subcontractors.
| | - | --------------------------------------------------------------------------------------------------------------------------------



| | · | Restricted Work Incidents: 11 incidents, which include 10 for Ecopetrol O&M, and one incident
for Reficar and subcontractors.
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | · | Environmental Incidents: None.
| | - | ------------------------------



| | · | Process Safety Incident: Two.
| | - | -----------------------------



| | 3.9.2 | Human Rights
| | ----- | ------------



Ecopetrol has a Human Rights Policy with an
integrated and systemic management approach to human rights based on the due diligence principle, which we continued to strengthen
in 2016.



In view of our commitment to respect and promote
human rights, Ecopetrol updated its human rights risk assessment in order to evaluate and mitigate human rights impacts. As a result
of this assessment, Ecopetrol S.A. has focused its efforts on the following principles:



| | · | Right to life, liberty and personal security,
| | - | ---------------------------------------------



| | · | Right of association and collective bargaining,
| | - | -----------------------------------------------





55







| | · | Abolition of forced or compulsory labor,
| | - | ----------------------------------------



| | · | Abolition of child labor,
| | - | -------------------------



| | · | Equality and non-discrimination at work,
| | - | ----------------------------------------



| | · | Just, equitable, and satisfactory conditions of work,
| | - | -----------------------------------------------------



| | · | Rights of ethnic groups, and
| | - | ----------------------------



| | · | Collective rights and the environment.
| | - | --------------------------------------



| | 3.9.3 | Environmental Sustainability
| | ----- | ----------------------------



| | 3.9.3.1 | Environmental Practices
| | ------- | -----------------------



Ecopetrol S.A.



During 2016, the environmental management strategy
of Ecopetrol included the following components:



| | 1. | Environmental Viability: this strategy concentrates on obtaining environmental licenses
and permits as well as adequate land management that ensures the sustainability of operations through timely prevention efforts
and management of environmental impacts, constant and systematic relationships with stakeholders and participation in the sustainable
development of the territories in which we operate.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Climate Change: this strategy aims to decrease our carbon emissions and reduce the vulnerability
of our operations and our facilities to the effects of climate change through the implementation of four strategic action lines:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Mitigation: reducing our carbon dioxide emissions and creating carbon offset alternatives;
| | - | ------------------------------------------------------------------------------------------



| | · | Vulnerability and Adaptation: reducing the risks and impacts to our operations posed by climate
variability and change;
| | - | -----------------------------------------------------------------------------------------------------------------------



| | · | Research and Technology: reducing our greenhouse gas emissions through action on research and development,
process optimization, implementation of energy efficient strategies, carbon capture and sequestration and diversification into
low carbon energy sources; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Involvement in Policymaking: informing and influencing government policies on climate change.
| | - | ---------------------------------------------------------------------------------------------



| | 3. | Biodiversity: this strategy aims to reduce Ecopetrol’s impacts on the ecosystems in
areas where we operate. This strategy mainly focuses on knowledge building and conservation efforts in areas where we operate.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Eco-efficiency: this strategy aims to maximize our efficient use of resources and mitigate
our environmental impacts. Through this strategy, which extends to our supply chain, we seek to utilize energy, materials, and
in general all natural resources as efficiently as we can, thereby reducing the environmental impacts from our operations and projects
and minimizing emissions, effluents and waste disposal from our operations and projects while taking into account our production
benchmarks.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Integrated Management of Water Resources: this strategy aims to ensure compliance with water
resources laws and reduce conflicts over water use in the areas near our projects and operations. Our core focus areas under this
strategy are aligned with the objectives defined by the 2010 National Water Policy for the Management of Water Resources in Colombia
which focuses on water supply, demand, quality, risk governance and institutional strengthening.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Since 2009, Ecopetrol has reported its achievements
in the sphere of environmental management to various relevant organizations focused on promoting sustainable business practices,
such as the Dow Jones Sustainability Index, the Carbon Disclosure Project (CDP) and the CDP Water Information Request; Environmental
Benchmarking of ARPEL.





56







| | 3.9.4 | Energy
                                         Projects
| | ----- | --------------------------------------------------------



Refining



Ecopetrol’s refining companies have been
undertaking significant efforts to make efficient and rational use of energy resources in its production processes and reduce energy
consumption and costs and carbon dioxide emissions. We focus on efficiency, reliability and optimization, and energy diversification.
During 2016, the refinery segment’s average monthly energy consumption was 61.42 MWhm (megawatts per hour per month) equivalents,
from which 99.9% was provided through self-generation and the remaining 0.01% with non-regulated energy purchased from the National
Transmission System.



Production



Further, during 2016, Ecopetrol S.A.’s
production sector had an average a monthly energy consumption of 272,839 MWhm (megawatts per hour per month) for its direct operation,
from which 76% was provided through self-generation and the remaining 24% with non-regulated energy purchased from the National
Transmission System.



| | 3.10 | Related Party and Intercompany Transactions
| | ---- | -------------------------------------------



Set forth below is a description of material
related party transactions. For additional information about transactions with related parties, see Note 32 – Related Parties
to our consolidated financial statements.



Ocensa



Ecopetrol S.A. has entered into a number of
agreements with its 72.65%-owned subsidiary Ocensa, of which the following are the most significant:



| | · | In March 1995, Ecopetrol S.A. entered into an agreement for the transportation of crude oil
through the Ocensa pipeline. Pursuant to the terms of this agreement, Ecopetrol S.A. was required to make monthly payments that
varied depending on both the volume of crude oil transported through the pipeline and a tariff imposed by Ocensa on the basis of
Ocensa’s financial projections and their expected volumes of crude oil. On January 17, 2013, this agreement was amended
as a result of Ocensa’s new business model. Among other changes, this amendment to the transportation agreement establishes
the payment of the tariff calculated according to Resolutions issued in 2010 by the Ministry of Mines and Energy. In 2013, another
amendment was executed that modified the terms by which the payments of invoices should be made. In 2015 Ecopetrol received a temporary
release of capacity from Vitol of 24,000 barrels per day for segment I and II and 14,000 barrels per day for segment III.
In 2016, payments made by Ecopetrol S.A. under this agreement amounted to US$873 million.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In December 2011, Ecopetrol S.A. entered into an operation and maintenance agreement for the
Porvenir, Miraflores and Vasconia pumping stations with Ocensa. In 2015, pursuant to the terms of this agreement, Ecopetrol S.A.
received payments of approximately US$9 million at fixed and variable costs plus applicable taxes. Pursuant to the terms of
the agreement, in September 2015 Ocensa notified Ecopetrol of its decision not to extend the term of the contract, which expired
in March 2016.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On July 10, 2012, Ecopetrol entered into a ship or pay agreement for the unloading of up to
8 thousand barrels per day of crude oil barrels at Ocensa’s unloading facilities. This agreement was later amended on March 12,
2013 and on July 19, 2013. The fees correspond to a cost of US$1.50 per barrel of crude oil that is unloaded. The agreement
has a term of five years. On April 11, 2014 Ecopetrol entered into an additional ship or pay agreement for the operation of
Ocensa’s unloading facilities by means of which Ecopetrol has the right to unload an additional volume of up to 2,000 barrels
per day. The additional agreement has a five year term. On 2015, as a result of certain modifications made by Ocensa to the unloading
facilities that make it possible to receive crude with lower API gravity, the parties signed an addendum to the agreement whereby
crude of 18 API can be unloaded by Ecopetrol at Ocensa’s facilities. On March 2016 Ocensa temporarily modified the fee for
unloading operations based on the stretch market conditions to US$0.50. By virtue of these agreements, Ecopetrol S.A. paid fees
of US$2.6 million to Ocensa in 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





57







| | · | On January 17, 2013, Ocensa and its shareholders – Cenit, Ecopetrol Pipelines International
Limited, Santiago Pipelines Company, New Santiago Pipelines Company, Total Colombia Pipeline, Inversiones Sol del Sur S.A.S. and
Cepsa Colombia S.A. – entered into a shareholders agreement that establishes the basis for a new business model, pursuant
to which Ocensa has become a profit center instead of a cost center. This agreement became effective as of the date of execution
and will be in effect until Ocensa is registered on an exchange. Additionally, this agreement might be renegotiated if the control
structure of Ocensa is modified.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Ocensa shareholders’ agreement
establishes the basis for Ocensa’s corporate governance model. It provides for a board of directors composed of five members,
two of which must be independent. Cenit may nominate three members of the board of directors, including the two independent members,
while minority shareholders may together nominate the remaining two members.



The Ocensa shareholders’ agreement
provides the minority shareholders with certain rights, including the right to nominate two members of the five-member board of
directors. Significant decisions must be approved by a qualified majority of at least four Ocensa shareholders, and by supermajorities
of the outstanding Ocensa shares. These actions include, among others (i) issuing additional shares or publicly listing shares,
declarations of dividends in amounts other than all distributable income and certain amendments to Ocensa’s bylaws and (ii)
asset sales in excess of US$50 million;



| | · | On October 28, 2013, Ecopetrol entered into a natural gas supply contract in force until November
30, 2018, pursuant to which Ecopetrol S.A. supplies gas to Ocensa and receives a fixed price per MBTU (million British Thermal
Units). This agreement replaced the contract for natural gas supply in Cusiana entered into on December of 2004, under which
Ocensa paid a variable rate to Ecopetrol. In 2016, Ecopetrol S.A. received an aggregate sum of US$4.9 million under the contract.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ocensa has entered into the following agreements,
among others, with some of our other subsidiaries:



| | · | In March 1995, Equion and Santiago Oil Company entered into agreements for the transportation
of crude oil through the Oleoducto Central S.A. (Ocensa) pipeline. In November 2012, Equion and Santiago Oil Company transferred,
by means of various transactions, its shares (24.8%) and transportation rights (19.8%) holdings in the Ocensa pipeline to wholly
owned subsidiaries of Ecopetrol S.A. (51%) and Talisman (49%). Equion and Santiago Oil Company kept 5% of transportation rights
in Ocensa. In 2014, the transportation fees billed by Ocensa were: Equion (US$44.4 million), Santiago Oil Company (US$3.8 million)
and Hocol (US$30.8 million). On January 17, 2013, this agreement was amended as a result of Ocensa’s new business model.
Among other changes, the amendment to the transportation agreement establishes that tariff payments are to be calculated according
to resolutions issued by the Ministry of Mines and Energy. On May 23, 2013, another amendment was executed that modified the terms
by which the payments of invoices should be made. In 2016, Ocensa billed Equion US$13.6 million and Santiago Oil Company US$1.6
million, in each case for transportation fees. Ocensa billed Hocol, as assignee of transportation rights from original shippers,
US$13 million in 2016.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On July 9, 2012, Ocensa and ODL entered into a strategic alliance for the dilution of crude
oil in the Cusiana station. The term of this contract is of five years. Once the initial term of the agreement ends, Ocensa
has a purchase option over the assets that perform the dilution process. In 2015, the parties signed two addenda to the agreement
in order to include additional construction work to be conducted by ODL and supervised by Ocensa for an agreed fee. ODL paid Ocensa
US$2.6 million under this contract in 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





58







Oleoducto de Colombia S.A. (ODC)



Ecopetrol S.A. entered into the following agreements
with its 73%-owned subsidiary ODC:



| | · | In July 1992, a take-and-pay agreement was signed for the transportation of hydrocarbons.
Pursuant to this agreement, Ecopetrol S.A. must pay a previously agreed tariff for the volume of hydrocarbons transported. The
duration of this agreement is indefinite; however the contract will remain in force as long as Ecopetrol S.A. holds shares in Oleoducto
de Colombia S.A., whether directly, or through an affiliate. As of January 2013, the parties agreed that the applicable tariff
would be the one set by the Ministry of Mines and Energy (the “MME Tariff”). The MME Tariff had been set in 2011 for
a four-year term, with a yearly adjustment based on the consumer price index. In 2016, payments made by Ecopetrol S.A. under this
agreement amounted to US$105 million.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In August 1992, an operation and maintenance agreement was signed for the Vasconia and Coveñas
terminals both property of ODC. The duration of this agreement is indefinite, but can be terminated by any party upon six months’
notice. The initial contract included services rendered by Ecopetrol directly or by third-party contractors hired by Ecopetrol
through mandate; with a variable surcharge over expenses and third-party contracts between 5% and 12% plus any applicable taxes.
In 2014, an amendment to the agreement was signed, adjusting the monthly fixed rate to include expenses of services rendered directly
by Ecopetrol, plus an additional 10% fee, and to eliminate the administrative surcharge. The contract also includes a variable
sum related to contracts and purchases made by Ecopetrol through mandate. In March 2015, the monthly rate was adjusted for both
Vasconia and Coveñas Stations. Pursuant to the terms of this agreement, ODC paid approximately US$20 million in 2016.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In March 1998, a joint operation agreement was signed for the TLU-1 Coveñas buoy. The
duration of this agreement is indefinite and can be terminated by mutual agreement. In December 2013, Ecopetrol S.A. assigned
its rights under this agreement to Cenit, though Ecopetrol S.A. kept its role as operator under the agreement. Pursuant to the
terms of this agreement, ODC paid Ecopetrol S.A. approximately US$7 million in 2016.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In September 1999, a joint operation agreement was signed for the TLU-3 Coveñas buoy between
Ocensa, ODC and Ecopetrol. Pursuant to the terms of this agreement, ODC paid approximately US$5 million in 2016. The duration
of this agreement is indefinite. In December 2013, Ecopetrol S.A. assigned its rights under this agreement to Cenit, though
Ecopetrol S.A. kept its role as operator under the agreement.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In July 2006, an operation and maintenance agreement was signed for the Caucasia station and
the Vasconia-Coveñas pipeline system. The duration of this agreement is indefinite. Since 2010, this agreement only covers
the operation of the Caucasia station and the Vasconia-Coveñas pipeline system, both property of ODC. The initial contract
included services rendered by Ecopetrol directly or by third party contractors hired by Ecopetrol through mandate; with a variable
surcharge over expenses and third party contracts between 5% and 12% plus any applicable taxes. In 2014, an amendment to the agreement
was signed, adjusting the monthly fixed rate to include expenses of services rendered directly by Ecopetrol, plus an additional
10% fee, and to eliminate the administrative surcharge. The contract also includes a variable sum related to contracts and purchases
hired by Ecopetrol through mandate. In 2015, an addendum was signed which adjusted the fixed rate. In 2016, ODC paid Ecopetrol
US$10 million under this agreement.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ODC has entered into the following agreements
with some of our other subsidiaries:



| | · | Between March 1992 and January 1993, Hocol, Equion and Santiago Oil Company each entered
into agreements with ODC for the transportation of crude oil through the Vasconia-Coveñas pipeline. The term of each of
these agreements is indefinite. As of January 2013, the applicable tariff is the one set by the Ministry of Mines and Energy.
In 2016, the transportation fees billed by ODC were: Equion (US$11 million), Santiago Oil Company (US$1 million) and Hocol
(US$8 million).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





59







Oleoducto de los Llanos Orientales (ODL)



Ecopetrol S.A. has entered into the following
agreements, among others, with its 65%-owned subsidiary ODL:



| | · | In March 2009, Ecopetrol S.A. entered into a ship-or-pay agreement with ODL that establishes
a financing tariff used to pay ODL’s indebtedness to Grupo Aval for five years. This agreement was superseded by a new contract
executed in May 2010, with a seven-year term, to reflect new conditions agreed with Grupo Aval. In August 2013, this contract
was amended, providing a new term of seven years, including two two-year grace periods, and an interest rate of DTF + 2.5%. This
financing tariff is collected through a trust fund, which in turn is responsible for making the debt service payments to Grupo
Aval. Under this agreement, ODL has committed to transport 75,000 bpd during the initial two-year grace period of the facility
and 90,000 bpd during the remaining years including the new term. Ecopetrol S.A. is responsible for 65% of this capacity. Payments
by Ecopetrol S.A. under this contract were COP$115 billion in 2016.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In September 2009, Ecopetrol S.A. entered into a second ship-or-pay agreement with ODL that establishes
a financing tariff collected through a trust fund that in turn is responsible for making debt service payments to security holders.
Under this agreement, ODL committed to transport 19,500 bpd during the first phase of the ODL project (which began in September
2009 and ended in the first quarter of 2010) and 39,000 bpd upon commencement of the second phase of the ODL project which occurred
in the first quarter of 2010 and was completed in the third quarter of 2016 (termination date of the agreement). Payments by Ecopetrol
S.A. under this contract were COP$112 billion in 2016.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In December 2009, Ecopetrol S.A. entered into a service agreement with ODL to transport crude
oil. This agreement was replaced in January 2014 by a new agreement that expires in December 2020. This is a “ship
or pay” agreement covering 167,000 bpd for 2014, 149,000 bpd for 2015 and 139,000 bpd until 2020. Payments by Ecopetrol S.A.
under this contract were COP$421 billion in 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In March 2010, Ecopetrol S.A. entered into a pipeline operating and maintenance agreement with
ODL. This agreement had an original five-year term and was amended in 2015 to extend the term another five years, adjusting certain
conditions. Pursuant to the terms of this agreement, ODL paid to Ecopetrol S.A. COP$8 billion in 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In July 2013, Ecopetrol S.A. entered into a service agreement with ODL to dilute, in the facilities
of the Cusiana field, crude oil transported in the Rubiales – Monterrey/Cusiana pipeline, with a committed capacity of 182,000
bpd. In 2014, this contract was amended to include an oil transfer service that has a “take or pay” volume of 15,000
bpd. Payments by Ecopetrol S.A. under this contract were COP$31 billion in 2016.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In August 1, 2015, ODL entered into an indefinite management agreement with Oleoducto Bicentenario
by means of which ODL receives legal representation and provides management services to Oleoducto Bicentenario. Pursuant to the
terms of this agreement, Bicentenario paid to ODL COP$13 billion plus applicable taxes in 2016.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Oleoducto Bicentenario de Colombia S.A.S.



Ecopetrol S.A. has entered into the following
agreements, among others, with its 55.97% owned subsidiary Oleoducto Bicentenario:



| | · | In June 2012, Ecopetrol S.A. entered into ship-or-pay and ship-and-pay crude oil transportation
agreements with Oleoducto Bicentenario that establish a price, which requires the payment of Oleoducto Bicentenario’s indebtedness
to local banks for 12 years. This tariff is collected through a trust; the trust is also responsible for making the debt service
payments to the banks. The duration of the ship-or-pay agreement is the earlier of 12 years or when the credit has been entirely
paid, and the duration of the ship-and-pay agreement is 20 years after the ship-or-pay terminates. Under these agreements,
Oleoducto Bicentenario has committed to transport at least 110,000 bpd, of which the 55% of the agreement volume is provided directly
by Ecopetrol S.A. and 0.97% indirectly by Hocol. In March 2014, the parties signed an amendment to this contract under which
Oleoducto Bicentenario acknowledges having received an advance tariff payment which can be amortized through volumes of crude transported
in excess of 110,000 bpd. In April 2015, this contract was amended to modify certain definitions to reflect new terms from the
negotiation of the debt, which included a modification of participant banks and a reduction of the interest rate. Pursuant to the
terms of this agreement, in 2016 Ecopetrol and Hocol paid to Bicentenario S.A. COP$603 billion plus applicable taxes.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





60







| | · | In June 2012, Ecopetrol S.A. and Hocol entered into storage or pay and storage and pay agreements
with Oleoducto Bicentenario. Under these agreements, Oleoducto Bicentenario is committed to receive, store, preserve and deliver
our crude oil. The storage or pay agreement will terminate when Oleoducto Bicentenario’s indebtedness to local banks has
been entirely paid, and the duration of the storage and pay agreement is 20 years after the storage or pay agreement terminates.
In April 2015, this contract was amended to modify certain definitions to reflect new terms from the negotiation of the debt, which
included a modification of participant banks and a reduction of the interest rate. Pursuant to the terms of this agreement, in
2016 Ecopetrol and Hocol paid to Bicentenario COP$25 billion plus applicable taxes.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In August 2012, Ecopetrol S.A. entered into an Operation and Maintenance agreement for the
Araguaney – Banadia pipeline system. The duration of this agreement is 15 years. Pursuant to the terms of this agreement,
Ecopetrol S.A. received COP$15 billion in 2016.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ecodiesel



| | · | Ecopetrol S.A. entered into a supply agreement with Ecodiesel Colombia S.A. (“Ecodiesel”),
a company in which Ecopetrol S.A. has a 50% equity interest. This agreement has been operative since August 1, 2010. Pursuant
to the terms of this agreement, Ecodiesel must deliver to Ecopetrol S.A. and Ecopetrol S.A. must in turn purchase 48,100 barrels
of Ecodiesel’s biodiesel production each month. Payments vary depending on the purchased volumes and the prices of biodiesel.
This agreement expires on December 31, 2017. In 2016, a total of COP$264 billion was paid under this contract.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Savia Peru S.A.



| | · | On February 19, 2016, Ecopetrol S.A., as lender and shareholder of 50%, and Savia Perú,
as borrower, entered into a five-year loan agreement for an aggregate principal amount not to exceed US$70 million. The proceeds
of the facility will be used to (i) repay short term loans and (ii) pay shortfalls related to final judgments (in case they materialize).
The loan agreement accrues interest at an annual rate of 4.99%, which can be adjusted on an annual basis, with semi-annual interest
payments and principal payments beginning on the 21st month following the disbursement date. As of April 2017, Ecopetrol
disbursed US$56.5 million under the loan agreement. Korea National Oil Corporation (KNOC), as shareholder of the other 50% of Savia
Perú, signed a facility under the same terms and conditions as described above.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Transactions with Other State-Controlled
Entities



Other than the agreements that we have entered
into with the ANH, in the ordinary course of business we enter into transactions with other state-owned entities that include but
are not limited to the following:



| | · | Selling and purchasing goods, including crude oil purchases of ANH royalties (see below);
| | - | -----------------------------------------------------------------------------------------



| | · | Properties and other assets;
| | - | ----------------------------



| | · | Rendering and receiving services;
| | - | ---------------------------------



| | · | Leasing assets;
| | - | ---------------



| | · | Depositing and borrowing money; and
| | - | -----------------------------------



| | · | Using public utilities.
| | - | -----------------------





61







For the years ended December 31, 2016,
2015 and 2014, we purchased the following volumes of crude oil from the ANH (National Hydrocarbon Agency) corresponding to royalties
paid in kind by oil producers in Colombia: 42.9 million barrels, 45.6 million barrels and 45.4 million barrels, respectively.
See the section Business Overview—Applicable Laws and Regulations—Regulation of Exploration and Production Activities—Business
Regulation—Royaltiesfor a description of the current royalty scheme.



| | 3.11 | Insurance
| | ---- | ---------



We have a clear and defined corporate policy
based on risk financing guidelines that summarizes the Company’s risk transfer and retention alternatives and provides support
and guidance for all the insurance-related issues of all of our affiliated and subsidiary companies.



There are three corporate insurance programs
covering Ecopetrol S.A. and its subsidiaries. In the text and tables below, we set forth our insurance programs and the companies
covered, along with limits and coverage details.



Group 1- Downstream Program:This insurance
program provides coverage for downstream (assets and operations) of Ecopetrol S.A. and all of its subsidiaries in excess of their
local insurance programs, when applicable. Coverage includes all physical damage and sabotage and terrorism, which were designed
to cover downstream operations.



Table 40 – Group 1 Downstream Program



|                       |  | Limit (eel/agg*)             |       |  | Deductible |  | Ecopetrol |          |  |  |          
|---------------------- |  | ---------------------------- | ----- |  | ---------- |  | --------- | -------- |  |  | ---------
|                       |  | Onshore                      |       |  | Offshore   |  |           | On shore |  |  | Off shore
|                       |  | (figures in USD in millions) |      
|Policies               |  |                              |       |  |            |  |           |          |  |  |          
|Property all risk      |  |                              | 2,744 |  |            |  | 0         |          |  |  | 5        
|Sabotage and terrorism |  |                              | 600   |  |            |  | 0         |          |  |  | 0.5      








(*) Eel: each
and every loss. Agg: Aggregate



Group 2 – Up and Midstream Program:This program provides coverage for upstream and midstream (assets and operations) of Ecopetrol’s interests and all of
its upstream subsidiaries. Coverage includes all physical damage, sabotage and terrorism and control of wells.



Table 41 – Group 2 Upstream and Midstream
Program



|                       |  | Limit (eel/agg*)             |          |  | Deductible |  |     | Ecopetrol |  |  |          |  |  |          |     |        |  |       |  |        
|---------------------- |  | ---------------------------- | -------- |  | ---------- |  | --- | --------- |  |  | -------- |  |  | -------- | --- | ------ |  | ----- |  | -------
|                       |  | Onshore                      |          |  | Offshore   |  |     | Onshore   |  |  | Offshore |  |  | Upstream |     | Equion |  | Hocol |  | América
|                       |  | (figures in USD in millions) |         
|Policies               |  |                              |          |  |            |  |     |           |  |  |          |  |  |          |     |        |  |       |  |        
|Property all risk      |  |                              | 400      |  |            |  | 400 |           |  |  | 0.25     |  |  |          | 0.5 |        |  | X     |  | X      
|Sabotage and terrorism |  |                              | 55       |  |            |  | 0   |           |  |  | 0.5      |  |  |          | N/A |        |  | X     |  | X      
|Control of Wells       |  |                              | 250/50** |  |            |  | 400 |           |  |  | 0.25-0.5 |  |  |          | 5   |        |  | X     |  | X      








(*) Eel:
each and every loss. Agg: Aggregate

(**) Drilling
USD250M / Production USD50M





62









Group 3 – Transversal Program:This
program provides coverage for downstream, upstream and midstream operations of Ecopetrol and its subsidiaries and all of its subsidiaries
in excess of their local insurance programs. Coverage includes general liability, directors and officers, cargo, crime and charterers’
liability.





Table 42 – Group 3 Transversal Program





|                      |  | Limit (eel/agg*)             |  | Deductible |     | Ecopetrol |           |             |            |         |              |  |    |         | Ecopetrol |  |          |  |  |           |    |  |        |  |   |       |  |  |         |  |  |        |    | 
|--------------------- |  | ---------------------------- |  | ---------- | --- | --------- | --------- | ----------- | ---------- | ------- | ------------ |  | -- | ------- | --------- |  | -------- |  |  | --------- | -- |  | ------ |  | - | ----- |  |  | ------- |  |  | ------ | -- | 
|                      |  | On
 shore                    |  | Off
 shore |     |           | On
 shore |             | Off
 shore |         | Down
 stream |  |    | Reficar |           |  | Propilco |  |  | Up stream |    |  | Equion |  |   | Hocol |  |  | América |  |  | Brazil |    | 
|                      |  | (figures in USD in millions) | 
|Policies              |  |                              |  |            |     |           |           |             |            |         |              |  |    |         |           |  |          |  |  |           |    |  |        |  |   |       |  |  |         |  |  |        |    | 
|Third Party Liability |  | 500                          |  |            | 500 |           |           | 1           |            | 1       |              |  | X  |         |           |  | X        |  |  |           | X  |  |        |  | X |       |  |  | X       |  |  |        | X  | 
|Crime                 |  | 75/150                       |  |            |     |           |           | Various     |            | Various |              |  | X  |         |           |  | X        |  |  |           | X  |  |        |  | X |       |  |  | X       |  |  |        | X  | 
|Directors& Officers   |  | 250                          |  |            |     |           |           | Various     |            | Various |              |  | X  |         |           |  | X        |  |  |           | X  |  |        |  | X |       |  |  | X       |  |  |        | X  | 
|Cargo                 |  | 120                          |  |            |     |           |           | 3% dispatch |            | NA      |              |  | X  |         |           |  | X        |  |  |           | NA |  |        |  | X |       |  |  | NA      |  |  |        | X  | 
|Charterers            |  | 750                          |  |            |     |           |           | 0.02        |            |         |              |  | NA |         |           |  | NA       |  |  |           | NA |  |        |  | X |       |  |  | NA      |  |  |        | NA | 








(*) Eel: each
and every loss. Agg: Aggregate



Our third-party liability insurance policies
cover Ecopetrol S.A., our subsidiaries and affiliates in excess of local underlying policy limits for claims made against them
by third parties. Our commercial general liability coverage will pay on behalf of or indemnify amounts for which an insured becomes
legally obligated to pay, including damages in respect of bodily injury, property, pollution and product liability. Coverage of
bodily injury and property damage is subject to coverage territory during the policy period.



With respect to offshore operations in the
U.S. Gulf Coast, Ecopetrol America Inc. is party to Operating Agreements, or OAS, that include customary conditions and which contain
similar terms and provisions to those in the Model Form of Offshore Deepwater Operating Agreement of the American Association of
Professional Landmen. In general, pursuant to these OAs, the obligations, duties, and liabilities of the contract parties are several,
and not joint or collective, for all operations covered by the OAs.



| | 3.12 | Human Resources/Labor Relations
| | ---- | -------------------------------



| | 3.12.1 | Employees
| | ------ | ---------



As of December 31, 2016, the Ecopetrol Corporate
Group had 10,920 employees, an increase of 1.48% from 2015. Most of our employees are located in Colombia. The table below presents
the breakdown of Ecopetrol employees according to the business segments where they work, and the personnel of our subsidiaries
for the years ended December 31, 2016, 2015 and 2014.



Table 43 – Corporate Group’s
Employees



|                                                     |  | As of December 31,    |       
|---------------------------------------------------- |  | --------------------- | ------
|                                                     |  | 2016                  |       
|                                                     |  | (number of employees) |       
|Ecopetrol S.A.                                       |  |                       |       
|Exploration and Production                           |  |                       |       
|Exploration                                          |  |                       | 225   
|Production                                           |  |                       | 2,095 
|Others                                               |  |                       | 452   
|Total Exploration and Production                     |  |                       | 2,772 
|Downstream                                           |  |                       |       
|Refining                                             |  |                       | 2,685 
|Marketing                                            |  |                       | 133   
|Others                                               |  |                       | 72    
|Total Downstream                                     |  |                       | 2,890 
|Transport                                            |  |                       | 949   
|Others                                               |  |                       | 244   
|Total Operations                                     |  |                       | 6,855 
|Corporate                                            |  |                       | 1,993 
|TOTAL ECOPETROL S.A.                                 |  |                       | 8,848 
|Ecopetrol America Inc.                               |  |                       | 71    
|Bioenergy S.A.                                       |  |                       | 145   
|Bioenergy Zona Franca S.A.S.                         |  |                       | 258   
|Hocol S.A.                                           |  |                       | 179   
|Equion Energía Limited                               |  |                       | 321   
|Oleoducto Central S.A.                               |  |                       | 290   
|Oleoducto de Colombia S.A.                           |  |                       | 2     
|Oleoducto de los Llanos S.A.                         |  |                       | 55    
|Oleoducto Bicentenario de Colombia S.A.S.            |  |                       | 0     
|Ecopetrol del Perú S.A.                              |  |                       | 0     
|Ecopetrol Costa Afuera de Colombia S.A.S.            |  |                       | 0     
|Refinería de Cartagena S.A.                          |  |                       | 170   
|Ecopetrol Óleo e Gás do Brasil Ltda.                 |  |                       | 16    
|Polipropileno del Caribe S.A. (Esenttia S.A.)        |  |                       | 409   
|Cenit Transporte y Logistica de Hidrocarburos S.A.S. |  |                       | 156   
|TOTAL                                                |  |                       | 10,920








| | (1) | 31 persons employed by us during 2015 were not included in our 2015 employee statistics as they
were independent contractors involved in non-regular activities and cannot be classified as temporary employees.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | 79 persons employed by us during 2014 were not included in our 2014 employee statistics as they
were independent contractors involved in non-regular activities and cannot be classified as temporary employees.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





63







Loans and investment on training and
development for our employees



To improve the quality of life of our employees,
Ecopetrol S.A. extends various types of loans to its employees, including housing loans and general-purpose loans. The principal
amount of the loan depends on the applicant’s tenure and cannot exceed 59 times the applicant’s monthly salary. Ecopetrol
S.A. does not guarantee any loans made by third parties. In 2016, Ecopetrol S.A. extended 999 housing loans for a total of COP$173
billion and 1,742 general-purpose loans for a total of COP$13 billion. Ecopetrol S.A. also provided on-site and external training
and development, which total to COP$5.7 billion, and it extended a total of COP$165 billion in subsidies for education.



We have not provided loans (including housing
loans), extended or maintained credit lines, arranged for the extension of credit by third parties, materially modified or renewed
an extension of credit lines, in the form of a personal loan to or for any of our executive officers since our ADSs were registered
under the Exchange Act.



There are no executive officers with housing
loans from Ecopetrol.



Labor Regulation



In accordance with article 123 of the Colombian
Constitution and the article 7th of the Law 1118 of 2006, our employees are considered “public servants”; even though
they are subject to the common labor law. As such, their behavior is subject to the rules to those who handle public interests
and goods and could be held liable for their illegal actions and omissions pursuant to the following regimes: (i) disciplinary (Law
734 of 2002), (ii) criminal or (iii) civil.



| | 3.12.2 | Collective Bargaining Arrangements
| | ------ | ----------------------------------



Ecopetrol S.A.



A collective bargaining agreement between us
and our main labor unions governs labor relations with our unionized employees, which amounted to 4,180 employees as of January
1, 2017. The agreement also governs our labor relations with the 2,818 non-unionized employees who, according to current labor
legislation, have been beneficiaries of the collective bargaining agreement.



We currently have five industry-wide labor
unions and seven company labor unions:



| | · | Unión Sindical Obrera de la Industria del Petróleo — USO (industry labor union);
| | - | --------------------------------------------------------------------------------





64







| | · | Asociación de Directivos Profesionales, Técnicos y Trabajadores de las Empresas de
la Rama de Actividad Económica del Recurso Natural del Petróleo y sus Derivados de Colombia — ADECO (industry
labor union);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Sindicato Nacional de Trabajadores de Empresas Operadoras, Contratistas, Subcontratistas de Servicios
y Actividades de la Industria del Petróleo y Similares — SINDISPETROL (industry labor union);
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Unión de Trabajadores de la Industria Energética Nacional y de Servicios Públicos
– UTEN (industry labor union);
| | - | ----------------------------------------------------------------------------------------------------------------



| | · | Asociación Sindical de Trabajadores de la Industria
del Petróleo – ASTIP (industry labor union);
| | - | ------------------------------------------------------------------------------------------------



| | · | Asociación de Profesionales de Ecopetrol — ASPEC (company labor union);
| | - | -----------------------------------------------------------------------



| | · | Sindicato Nacional de Trabajadores de Ecopetrol — SINCOPETROL (company labor union);
| | - | ------------------------------------------------------------------------------------



| | · | Asociación Sindical de Empleados de Ecopetrol – ASOPETROL (company labor union);
| | - | --------------------------------------------------------------------------------



| | · | Asociación Sindical de Trabajadores de Ecopetrol – TRASINE (company labor union);
| | - | ---------------------------------------------------------------------------------



| | · | Asociación Sindical de Trabajadores de Ecopetrol – ASTECO (company labor union);
| | - | --------------------------------------------------------------------------------



| | · | Sindicato de Trabajadores Petroleros de Ecopetrol – SINPECO (company labor union): and
| | - | --------------------------------------------------------------------------------------



| | · | Sindicato de Profesionales de Ecopetrol S.A. – SINPROECOP (company labor union).
| | - | --------------------------------------------------------------------------------



Currently Ecopetrol S.A. does not have any
workers in the SINCOPETROL union. This union does not participate in the negotiation process.



Any employee working for any company in the
oil and gas industry may join the USO, ADECO SINDISPETROL, UTEN or ASTIP. Only our employees may join the company labor unions.



Ecopetrol S.A. relations with unions are based
on a permanent dialogue and communication sessions where different matters are discussed in order to solve and prevent any labor
conflict.



The collective bargaining agreement has been
in effect since 2014 and expires on June 30, 2018. In 2016, the agreement was reviewed on application matters, except for monetary
expenses (including wages and benefits). This review ended with a mutual arrangement document, signed on December 10, 2016.



This agreement currently covers all workers
benefiting from the Collective Labor Convention, regardless of whether they are part of any labor union.



| | 4. | Financial Review
| | -- | ----------------



Our consolidated financial statements for the
years ended December 31, 2014, 2015 and 2016 were prepared in accordance with IFRS. Our date of transition from our previous
GAAP to IFRS was January 1, 2014.



IFRS differs in certain significant respects
from the current Colombian IFRS (which is the accounting standard we use for local statutory reporting purposes). As a result,
our financial information presented under IFRS is not directly comparable to certain of our financial information presented under
Colombian IFRS. A description of the differences between Colombian IFRS and IFRS is presented under Summary of Differences between
Internal Reporting (Colombian IFRS and IFRS) below.



Our consolidated financial statements were
consolidated line by line and all transactions and significant balances between affiliates have been eliminated. These financial
statements include the financial results of all subsidiaries companies controlled, directly or indirectly, by Ecopetrol S.A. See
Exhibit 1—Consolidated companies, associates and joint ventures, to our consolidated financial statements included in this
annual report.





65







| | 4.1 | Factors Affecting Our Operating Results
| | --- | ---------------------------------------



Our operating results were affected mainly
by international prices of crude oil and, to a somewhat lesser extent, international prices for refined products and local prices
for natural gas, as well as sales volumes, product mix, exchange rate and our operational performance. Crude oil prices and volumes
are particularly important to the results of our exploration and production segment. This is because as export volumes or export
prices of crude oil and products decrease or increase, thus revenues too. Results from our refining activities are also affected
by the price of crude oil used as raw material, changes in product prices in the international market, change in environmental
regulations, conversion ratios and utilization rates and refining capacity, all of which affect our refining margins. Changes in
the value of foreign currencies, particularly the U.S. dollar against the Colombian Peso, can also have a significant effect on
our financial statements. Finally, terrorist attacks by guerillas against our pipelines and other facilities can lead to loss of
revenues by restricting the availability of transport systems for exports or sales of crude oil and products in addition to the
direct costs of repairing and cleaning them.



Sales volumes and prices



Our results from the exploration and production
segment depends mainly on our sales volumes and average local and international prices for crude oil, petrochemicals and natural
gas. Additionally, sales volumes are affected by the purchase of crude oil and natural gas that we make from third parties and
the ANH.



We sell crude oil mainly in the international
market. We also process crude oil at the Barrancabermeja and Reficar refineries and sell refined and other petrochemical products
in the local and international markets.



Local sales and prices



We have a number of crude oil short-term commercial
agreements with local customers, and natural gas short and long-term supply contracts with gas-fired power plants and local natural
gas distribution companies. Local sale prices are determined in accordance with existing regulations, contractual arrangements
and the spot market linked to international benchmarks. Local sales represent 48% of our total revenues, on average, for the past
three years.



International Sales and Prices



Our foreign sales represented 52% of our total
revenues, on average, for the past three years.



International sale prices are determined in
accordance with contractual arrangements and the spot market linked to international benchmarks primarily ICE Brent benchmark.



A market diversification strategy has allowed
us to focus towards markets where we have been able to capture better value for our crudes and refined products. We sell our crudes
and refined products in various regions, such as the U.S., Central America and the Caribbean, Asia and Europe. In our negotiations
with potential customers, we seek to use the most liquid benchmark reference prices in each region.



Exploration costs



We account for exploratory drilling costs using
the successful efforts method, whereby all costs associated with the exploration and drilling of productive wells are initially
capitalized. Costs incurred in exploring and drilling of dry or unsuccessful wells are expensed in the period in which the well
is determined to be a dry or unsuccessful well and are accounted for under “Exploration and Project expenses.” Consequently,
an increase in the number of exploratory wells we declare as dry or unsuccessful will negatively affect our results and may cause
volatility in our operating expenses.



Royalties



Each of our production contracts has its own
royalty arrangement in accordance with applicable law. Law 141 of 1994 established a royalty fixed rate equivalent to 20% of total
production. In 1999, a modification to the royalty system established a sliding scale for royalty percentage linked to the production
level of crude oil and natural gas to fields discovered after July 29, 1999, depending on whether the production is crude
oil or natural gas, and on the quality of the crude oil produced. Since 2002, as a result of the enactment of Law 756 of 2002,
the royalty percentage has ranged from 8% for fields producing up to five thousand bpd to 25% for fields producing an excess of
600 thousand bpd. Producing fields pay royalties in accordance with the applicable royalty rate at the time of the discovery.
Also, Law 756 of 2002 establishes that in the fields of the association contracts that finalize or revert back, an additional royalty
rate of 12% of the basic production applies. Therefore, pursuant to this law, in 2016, as a result of the return of the Rubiales
field to Ecopetrol in July 2016, the royalty rate went from 20% to 32%.





66







Since January 2014, the ANH has collected
natural gas production royalties from producers settled in cash based on a formula, regardless of whether a producer has sold the
gas. As a result, we no longer commercialize this gas on behalf of the ANH. In addition, because the royalties are now payable
to the ANH in cash, all the gas we produce is considered part of our production, without any deduction for royalties. The cost
of natural gas royalties totaled COP$ 478,332 million in 2016.



Purchases of hydrocarbons



We continue purchasing all crude oil delivered
to the ANH as royalties by us and by third parties. The purchase price is calculated according to a formula set forth in a contract
between us and the ANH that reflects our export sales prices (crudes and products), a quality adjustment for API gravity and sulfur
content, transportation rates from the wellhead to the Coveñas and Tumaco ports and a marketing fee. We sell the physical
product purchased from the ANH as part of our ordinary business. In June 2016, the contract between the ANH and us was extended
until June 30, 2018.



Our purchases of hydrocarbons from the ANH
are made in the ordinary course of business, and on terms comparable to those offered to private parties. We have established procurement
policies and approval processes for purchases of products and services, which do not depend on whether the counterparties are state-owned
entities.



Since 2016, we import crude oil for Reficar
feedstock when such imports are to result in a better operational or economic performance of the Ecopetrol Group.



| | 4.2 | Effect of Taxes, Exchange Rate Variation, Inflation and the Price of Oil on our Results
| | --- | ---------------------------------------------------------------------------------------



| | 4.2.1 | Taxes
| | ----- | -----



In December 2016, the Colombian Congress adopted
Law 1819, which introduced more changes to the Colombian tax system, applicable beginning in 2017, including the following aspects:



| | · | The CREE and CREE surtax were eliminated. Instead, a unified income tax rate was set, which will
be 34% for 2017 and 33% for 2018 and onwards.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| | · | An income tax surtax for profits above COP$800 million is set which will be 6% in 2017 and 4% in
2018.
| | - | ------------------------------------------------------------------------------------------------------



| | · | Taxpayers must calculate their taxable income taking as initial base the year and result under
Colombian IFRS. Accounting profit is reconciled to obtain the net income tax. This is the basis upon which to calculate the income
tax.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A withholding tax on dividends is triggered for dividends paid to non-resident shareholders as
follows: (i) 5% dividend tax for dividends distributed out of profits already taxed at the company ́s level; (ii) 35% withholding
tax rate for dividends distributed out of profits not taxed at the company ́s level, and (iii) an additional 5% dividend tax
rate after having applied and deducted the initial 35% withholding. As of fiscal year 2017, for Colombian individuals, dividends
will be taxed between 5% and 10% depending on the dividend amount. Profits that did not pay tax at the corporate level would be
subject to a 35% withholding tax at the time of distribution. In this case, the base amount subject to the dividend tax would be
the remaining amount after the 35% withholding tax. Dividends tax will be applicable to profits generated as of 2017. Finally,
dividends paid to local corporations are not subject to this tax.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 2017 and future loss carryforwards are subject to a time-limit of 12 years.
| | - | ---------------------------------------------------------------------------





67







| | · | Depreciation and amortization methods and annual percentages are limited to the established
                                                                                                               in the fiscal rule and depends on the type of asset. For example, machinery and equipment depreciate at 10%,
                                                                                                               infrastructure (including pipelines) at 2.22% and vehicles and computers at 20%, among others.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The income tax for tax free zone users will increase from 15% to 20% in 2017. The tax rate of companies
located in a free trade zone with the legal stability contract is 15% during the contract’s duration term.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The presumptive income rate will increase from 3% to 3.5% as of 2017.
| | - | ---------------------------------------------------------------------



| | · | Tax rate for VAT will increase from 16% to 19%.
| | - | -----------------------------------------------



| | · | The charge on financial transactions is stabilized at 4x1,000.
| | - | --------------------------------------------------------------



| | · | A
new national carbon tax is established which will be triggered on the carbon content of fossil fuels used for combustion. The
rate will be COP$15,000 per ton of CO2.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the oil and gas industry the tax reform includes two tax benefits that are expected to improve the operations of the oil and gas industry:



| | · | “CERT: Certificado de Reembolso Tributario” incentive
| | - | -----------------------------------------------------



For exploration activities, the
“CERT” (for its acronym in Spanish) incentive was approved, consisting of the reimbursement of part of the investment
made in the exploration phase. The reimbursement will depend on certain percentages that should be established and further regulated
by Colombian Government.



The CERT will be granted when the
income tax return is filed, subject to the procedure to be established by the Colombian Government.



The CERT can only be redeemed to
pay taxes and is effective up to two years after it is issued. However, the CERT can also be sold and traded in fixed income market.



For production activities, the
CERT will be granted exclusively to investments that increase the recovery factor, i.e. investments that increase the reserves
that are currently proved in certain wells.



The effect of this regulation is
still uncertain and will depend on how and when the government issues the detailed regulations.



| | · | Refundable VAT on O&G exploration:
| | - | ----------------------------------



Taxpayers in the oil and gas industry
are entitled to refund VAT paid in the exploration phase for offshore projects. Taxpayers can request for this VAT as of the next
fiscal year in which the investment was made. VAT that is reimbursed cannot be used as a higher cost or expense for income tax
purposes.



| | 4.2.2 | Exchange Rate Variation
| | ----- | -----------------------



The functional currency of each Ecopetrol Group
company is determined in relation to the main economic environment where each company operates; however our consolidated financial
results are reported in Colombian Pesos, which is the Ecopetrol Group’s functional and presentation currency. A substantial
part of our consolidated revenues, coming from Ecopetrol Group companies whose functional currency is the Colombian Peso is derived
from local sales and exports of crude oil, natural gas and refined products are sold at prices referenced to benchmarks quoted
in U.S. dollars. Therefore, they are exposed to foreign currency exchange risk on revenues, capital expenditures and financial
instruments that are denominated in a currency other than its functional currency.



An appreciation of the Colombian Peso has a
negative impact on our results of operations because our revenues from exports of crude oil, natural gas and refined products are
primarily expressed in Colombian Pesos. Costs of imported goods and contracted services expressed in U.S. dollars will also be
lower when expressed in Colombian Pesos, but on balance, our operating income in Colombian Pesos tends to decline when the Colombian
Peso appreciates, other factors being equal. Conversely, when the Colombian Peso depreciates against the U.S. dollar, our reported
revenues, costs related to imported goods and services, interest costs, and operating income, all tend to increase. As crude oil
is priced in U.S. dollars, fluctuations in the exchange rate of the Colombian Peso against the U.S. dollar may have a significant
impact on revenues, cost, assets and liabilities held in foreign currency.





68







During 2016, 2015 and 2014, the Colombian Peso
depreciated on average 11.18%, 37.28% and 7.05%, respectively, against the U.S. dollar. Additionally, as of December 31, 2016 the
Colombian Peso appreciated 4.72% from the rate a year earlier. As of December 31, 2015 and 2014, in contrast, the Colombian Peso
depreciated 31.64% and 24.17%, respectively, from the rate a year earlier.



In 2016, our consolidated debt in foreign currency
increased by a total of US$975 million as Ecopetrol S.A. raised US$475 million through international loans and US$500 million through
an international bond issuance. In 2015, our consolidated debt in foreign currency increased by a total of US$3,425 million as
Ecopetrol S.A. raised US$1,925 million through an international loan and US$1,500 million through an international bond issuance.
In 2014, our consolidated debt in foreign currency increased through international bond issuances by Ecopetrol S.A. and Ocensa
for a total of US$3,700 million.



As of December 31, 2016 our U.S.
dollar-denominated total debt was US$15.2 billion, which we recognize in our financial statements at its amortized cost,
which corresponds to the present value of cash flows, discounted at the effective interest rate. Out of this total, US$12
billion relates to Ecopetrol S.A., whose functional currency is the Colombian Peso. Therefore, when the Colombian Peso
depreciates against the U.S. dollar, Ecopetrol S.A. is exposed to an exchange rate loss. In contrast, when the Colombian Peso
appreciates against the U.S. dollar, Ecopetrol S.A. has an exchange rate gain. Some of the Ecopetrol Group companies have the
U.S. dollar as functional currency and are not exposed to a material exchange rate risk resulting from fluctuations in the
Colombian Peso against the U.S. dollar. On the asset side, when the financial statements of the Group are consolidated, the
exchange rate differential of the subsidiaries’ assets and liabilities whose functional currency is the U.S. dollar is
recognized directly in equity, as part of the other comprehensive income.



The Company adopted hedge accounting as part
of its risk management strategy, using two types of natural hedges with its U.S. dollar debt as a financial instrument: i) a cash
flow hedge for exports of crude oil and ii) a hedge of a net investment in a foreign operation. As a result of the implementation
of both hedges 88% ($10.5 billion) of Ecopetrol S.A.’s debt in U.S. dollars was designated as a hedge. With the adoption
of hedge accounting, the effect of the volatility of the foreign exchange rate on the hedged portion of the debt is recognized
directly in equity, as part of the other comprehensive income.



The remaining portion of Ecopetrol S.A.’s
U.S. dollar-denominated debt, as well as the financial assets and liabilities denominated in foreign currency, continues to be
exposed to the fluctuation in the exchange rate, which means that an appreciation of the Colombian peso against the U.S dollar
could generate a loss if companies whose functional currency is the Colombian peso have an active net position in U.S. dollars
or a gain if they have a net liability position in U.S. dollars. Conversely, a depreciation of the Colombian peso against the U.S.
dollar could generate a gain if companies whose functional currency is the Colombian peso have a net active position in U.S. dollars
or a loss if they have a net liability position in U.S. dollars. As of December 31, 2016, Ecopetrol Group companies with the U.S.
dollar as functional currency have a net active U.S. dollar position after the instruments of natural hedging previously mentioned.



| | 4.2.3 | Effects of Inflation
| | ----- | --------------------



Inflation in Colombia has not exceeded an average
annual rate of 8% for the past ten years. It decreased in 2016 as compared to 2015. As measured by the general consumer price index,
average annual inflation in Colombia for the years ended December 31, 2016, 2015 and 2014; inflation was 5.75%, 6.77% and 3.66%,
respectively. The decrease in inflation in 2016 is mainly explained by the normalization of prices as a consequence of the ending
of “El Niño” weather phenomenon and the slight appreciation of the Colombian Peso against the U.S. dollar in
the second half of 2016. Cost inflation in the prices of goods, raw materials, interest cost of debt in local currency indexed
to inflation and services that are necessary for the development and operation of oil and gas producing assets can vary over time
and between each market segment.





69







| | 4.2.4 | Effects of the Price of Oil
| | ----- | ---------------------------



The average price of ICE Brent crude was US$45.1
per barrel in 2016 as compared to US$53.6 per barrel in 2015 and US$99.3 per barrel in 2014. As a consequence, our average price
crude oil basket was US$35.7 per barrel in 2016 as compared to US$43.9 per barrel in 2015 and US$87.3 per barrel in 2014, which
represents a decrease of US$8.2 per barrel in 2016 compared to 2015. This decrease is mainly explained by a continuing imbalance
between supply and demand in the global crude market due to higher OPEC production as well as a resilient North American production.
Nevertheless, the Ecopetrol’s average crude oil basket price relative to ICE Brent reported a discount of US$9.4 in 2016,
stronger than the US$9.7 and US$12 observed in 2015 and 2014, respectively, due to an active commercial strategy.



In the Operating Results section
below, we present the impact of the price decline in our revenue and cost of sales.



Additionally, fluctuations in the price of
oil have had an impact on the value of our oil and gas reserves. The valuation of these reserves was made using a price in accordance
with SEC regulations. A decline in hydrocarbon prices and reserves, as well as changes in environmental regulations may lead to
the recognition of impairment of assets. In 2015, in connection with the current adverse economic context faced by the hydrocarbons
sector, which resulted in a reduction in forecasted oil prices and an increase in market and country risk that is reflected in
the discount rate, as well as a reduction in the recoverable reserves amount and refining margin, among other factors, Ecopetrol
recognized an impairment of non-current assets of COP$7,864,875 million before taxes. In 2016, in connection with our evaluation
of the recoverable amount of the assets value, which includes the variation in estimations of future prices under the current scenarios
of OPEC’s oil quota agreements and the impact resulting from changes on specifications issued by the International Marine
Organization agreement regarding marine pollution, Marpol on crude and fuels with high sulfur content, Ecopetrol recognized an
impairment of non-current assets of COP$928,747 million before taxes. For additional information about this impairment charges,see Notes 14, 17 and 28 to our consolidated financial statements.



| | 4.3 | Accounting Policies
| | --- | -------------------



Our consolidated financial statements for the
years ended December 31, 2014, 2015 and 2016 were prepared in accordance with IFRS. Our date of transition to IFRS was January 1,
2014. The detail of the accounting policies is described in Note 4 to our consolidated financial statements.



| | 4.4 | Critical Accounting Judgments and Estimates
| | --- | -------------------------------------------



Critical accounting policies are those policies
that require us to exercise judgment or involve a higher degree of complexity in the application of the accounting policies that
currently affect our financial condition and results of operations. The accounting judgments and estimates we make in these contexts
require us to calculate variables and make assumptions about matters that are highly uncertain. In each case, if we had made other
estimates, or if changes in the estimates occur from period to period, our financial condition and results of operations could
be materially affected.



See Note 3 to our consolidated financial statements
for a summary of the critical accounting judgments and estimates applicable to us. There are many other areas in which we use estimates
about uncertain matters, but we believe the reasonably likely effect of changed or different estimates would not be material to
our financial presentation.



| | 4.5 | Operating Results
| | --- | -----------------



The following discussion is based on information
contained in our audited consolidated financial statements and should be read in conjunction therewith.



| | 4.5.1 | Consolidated Results of Operations
| | ----- | ----------------------------------



The following table sets forth components of
our income statement for the years ended December 31, 2016, 2015 and 2014.





70







Table 44 – Consolidated Income Statement



|Income Statement                   |  | For the Years ended December 31, |            |   | % Change | 
|---------------------------------- |  | -------------------------------- | ---------- | - | -------- | 
|(Colombian Pesos in millions)      |  | 2016                             |            |   | 2015     | 
|Revenue                            |  |                                  | 48,485,561 |   |          | 
|Cost of Sales                      |  |                                  | 34,251,423 |   |          | 
|Gross Profit                       |  |                                  | 14,234,138 |   |          | 
|Operating Expenses                 |  |                                  | 4,400,843  |   |          | 
|Impairment of non-current assets   |  |                                  | 928,747    |   |          | 
|Operating Income                   |  |                                  | 8,904,548  |   |          | 
|Finance results, net               |  |                                  | (1,175,367 | ) |          | 
|Share of profit of companies       |  |                                  | 61,345     |   |          | 
|Income before income tax           |  |                                  | 7,790,526  |   |          | 
|Income tax                         |  |                                  | (4,543,046 | ) |          | 
|Net Income (loss)                  |  |                                  | 3,247,480  |   |          | 
|Net Income (loss) attributable to: |  |                                  |            |   |          | 
|Company’s shareholders             |  |                                  | 2,447,881  |   |          | 
|Non-controlling interest           |  |                                  | 799,599    |   |          | 
|Net Income (loss)                  |  |                                  | 3,247,480  |   |          | 





71







| | 4.5.1.1 | Total Revenues
| | ------- | --------------



Table 45 – Third-Party Revenues by
Business Segment



The following table sets forth our principal
sources of third-party revenues by business segment for the years ended December 31, 2016, 2015 and 2014. An explanation of
how we classify our operations into business segments is included in Section 4.5.2 below.



|                                                            |  | 2016                        |             |  | 2015                                                                                                                  |  |      | 2014                                                                                                                                                                    |  |  | %
                                         Change Sales Revenues     | 
|----------------------------------------------------------- |  | --------------------------- | ----------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -------------------------------------------------------------------- | 
|Revenue
                                         by segment |  | Volume (barrels equivalent) |             |  | Average
                                         price U.S.
                                         dollars/ barrels |  |      | Sales
                                         revenues (Colombian
                                         Pesos in
                                         millions) |  |  | Volume
                                         (barrels equivalent) | 
|Local crude oil                                             |  |                             | 5,288,631   |  |                                                                                                                       |  | 35.0 |                                                                                                                                                                         |  |  | 553,666                                                              | 
|Foreign crude oil                                           |  |                             | 159,311,257 |  |                                                                                                                       |  | 35.7 |                                                                                                                                                                         |  |  | 17,278,579                                                           | 
|Trading of crude oil                                        |  |                             | -           |  |                                                                                                                       |  | -    |                                                                                                                                                                         |  |  | -                                                                    | 
|Natural gas local                                           |  |                             | 27,543,046  |  |                                                                                                                       |  | 23.6 |                                                                                                                                                                         |  |  | 1,988,336                                                            | 
|Foreign natural gas                                         |  |                             | 931,754     |  |                                                                                                                       |  | 20.9 |                                                                                                                                                                         |  |  | 58,809                                                               | 
|Other income(1)                                             |  |                             | 1,288,736   |  |                                                                                                                       |  |      |                                                                                                                                                                         |  |  | 647,942                                                              | 
|Exploration
    and production sales                        |  |                             | 194,363,424 |  |                                                                                                                       |  |      |                                                                                                                                                                         |  |  | 20,527,332                                                           | 
|Local refined products                                      |  |                             | 106,047,637 |  |                                                                                                                       |  | 54.9 |                                                                                                                                                                         |  |  | 17,771,166                                                           | 
|Foreign refined products                                    |  |                             | 51,843,743  |  |                                                                                                                       |  | 40.4 |                                                                                                                                                                         |  |  | 6,330,648                                                            | 
|Other income(1)                                             |  |                             | -           |  |                                                                                                                       |  | -    |                                                                                                                                                                         |  |  | 92,210                                                               | 
|Refining
    and petrochemicals                             |  |                             | 157,891,380 |  |                                                                                                                       |  |      |                                                                                                                                                                         |  |  | 24,194,024                                                           | 
|Transportation
    services                                 |  |                             | -           |  |                                                                                                                       |  | -    |                                                                                                                                                                         |  |  | 3,764,205                                                            | 
|Transportation
    and logistics                            |  |                             | -           |  |                                                                                                                       |  | -    |                                                                                                                                                                         |  |  | 3,764,205                                                            | 
|Total
    sales                                             |  |                             | 352,254,804 |  |                                                                                                                       |  |      |                                                                                                                                                                         |  |  | 48,485,561                                                           | 
|Crude oil                                                   |  |                             | 164,599,888 |  |                                                                                                                       |  | 35.7 |                                                                                                                                                                         |  |  | 17,832,245                                                           | 
|Natural gas                                                 |  |                             | 28,474,800  |  |                                                                                                                       |  | 23.5 |                                                                                                                                                                         |  |  | 2,047,145                                                            | 
|Refined products                                            |  |                             | 159,180,116 |  |                                                                                                                       |  | 50.1 |                                                                                                                                                                         |  |  | 24,101,814                                                           | 
|Other                                                       |  |                             | -           |  |                                                                                                                       |  |      |                                                                                                                                                                         |  |  | 4,504,357                                                            | 
|Total
    sales                                             |  |                             | 352,254,804 |  |                                                                                                                       |  |      |                                                                                                                                                                         |  |  | 48,485,561                                                           | 








| | Note: | All intercompany sales transactions have been eliminated in full in order to show our sales to
third parties. As a result of the evaluation of control over companies under IFRS, Ecopetrol does not consolidate Equion. As a
consequence, the volume information for 2014 included in this annual report (which has been prepared under IFRS) differs from the
information we previously published for 2014 under Colombian Government Entity GAAP (where we did consolidate Equion).
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | In the case of the exploration and production segment, corresponds to services and sales of refined
products (mainly LPG and asphalt) allocated to our exploration and production segment. In the case of the refining and petrochemicals
segment, corresponds to industrial services.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



72







In 2016, total revenues decreased by 7.4% as
compared to 2015, primarily as a result of: (i) a COP$6,456,917 million decrease in revenues mainly due to the 18.6%, or US$8.2
per barrel reduction of our average crude oil basket price, (ii) a COP$1,572,854 million decrease in revenues attributable to the
decrease in our sales volume and lower services provided by our transportations and logistics segment. This decrease was partially
offset by the 11.2% devaluation of the Colombian Peso against the U.S. dollar, from an average exchange rate of COP$2,746.47/US$1.00
in 2015 to an average exchange rate of COP$3,053.42/US$1.00 in 2016, resulting in an increase in sales revenue from exports, which
represented an increase of COP$4,168,061 million.



The decrease of our sales volume in 2016 as
compared to 2015 was the result of (a) the 18.1%, or 36.4 mbe, decrease in our crude sales volume caused mainly by lower crude
exports due to production decline, reduced purchases by third parties and lower availability of crude due to its use for feedstock
at Reficar, and (b) the 15.6%, or 5.3 mbe, decrease in natural gas sales volume due to lower thermal demand as a result of the
end of the “El Niño” weather phenomenon and the termination of our sales contract to Venezuela on June 30, 2015.
This decrease in sales volume was partially offset by the 20.2%, or 26.8 mbe, increase in sales of refined products given the increase
of operations at Reficar and higher demand due to the growth in the number of motor vehicles in Colombia.



In 2015, total revenues decreased by 20.7%
as compared to 2014, primarily as a result of: (i) a COP$27,847,772 million, decrease in revenues mainly due to the 49.7%, or US$43.4
per barrel reduction of our average crude oil basket price. This decrease was partially offset by (i) the 37.28% devaluation of
the Colombian Peso against the U.S. dollar, from an average exchange rate of COP$2,000.68/US$1 in 2014 to an average exchange rate
of COP$2,746.47/US$1 in 2015, resulting in an increase in sales revenue from exports as well as in services provided by our transportation
and logistics segment, which combined represented an upturn of COP$13,312,094 million and (ii) COP$882,873 million increase in
revenues which was attributable to increase our sales volume.



The increase of our sales volume in 2015 as
compared to 2014 was mainly the result of the 3.9%, or 4.97 mbe, increase in our refined products sales volume, which in turn was
primarily the result of the 8.2% increase in local sales of refined products given higher demand caused mainly by the increase
in the number of vehicles in Colombia, the higher consumption of diesel for energy generation at thermal power plants due to warmer
weather caused by the El Niño climate phenomenon and supplying the border area with Venezuela due to that country’s
decision to temporarily close its border with Colombia; partially offset by lower exports of fuel oil, as a result of the difficulties
in transporting these products to port by means of the Rio Magdalena due to the reduced flow from this river. This increase in
sales volume was partially offset by the 56.8%, or 3.8 mbe, decrease in natural gas exports due to the termination of our Venezuela
sales contract on June 30, 2015 and the natural decline in production at the Guajira field.



| | 4.5.1.2 | Cost of Sales
| | ------- | -------------



Our cost of sales was principally affected
by the factors described below. See Note 26 Cost of sales to our consolidated financial statements for more detail.



Cost of sales in 2016 was COP$34,251,423 million,
representing a COP$2,743,093 million (7.4%) decrease as compared to 2015, primarily as a result of the following factors:



| | · | A COP$2,043,600 million decrease in the purchase costs of crude oil, natural gas and refined products,
which were purchased for sales and in the case of raw materials for refining, which was primarily the result of (i) a lower average
purchase prices due to the COP$3,571,691 million decrease in international benchmark prices for crude oil, natural gas and refined
products, and (ii) a COP$142,758 decrease in volumes purchased due to the positive effect of a decrease in imports by Reficar and
lower products imports by the Refinery of Cartagena given its beginning of operation partially offset by greater purchases of crude
oil in the international market for its supply. This decrease was partially offset by a COP$1,670,849 increase in the average exchange
rate of the Colombian Peso against the U.S. dollar (which led to increased costs in Colombian Peso terms).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





73







| | · | A COP$966,578 million increase in maintenance and contracted
services cost, which was primarily the result of (i) a COP$630,576 million decrease in contracted services, mainly due to cost
savings achieved through the implementation of our business transformation plan and the transfer of the direct operation of the
Rubiales field to Ecopetrol in July 2016, ; and (ii) a COP$336,002 million decrease in maintenance costs, mainly due to savings
achieved from our 2016 maintenance plan which included the renegotiation of fees and the optimization of time without affecting
operations.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$587,696 million decrease in transportation costs,
which was the result of an optimization of the use of tanker trucks. This optimization included improvements in the pipeline transportation
system for the transportation of heavy crude oil and consequently less use of tanker trucks, use of shorter transportation routes
and renegotiation of fees for contracts.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The factors mentioned
above were partially offset by a a) COP$784,266 million increase in the amortization, depletion and depreciation of property, plant
and equipment in connection with the start-up of the Reficar units and capitalization of major maintenance costs at the Barrancabermeja
refinery and b) a COP$70,515 million decrease in other minor items.



Cost of sales in 2015 was COP$36,994,516 million,
representing a COP$5,980,612 million (13.9%) decrease as compared to 2014, primarily as a result of the following factors:



| | · | COP$4,900,941 million decrease in the purchase costs of
crude oil, natural gas and refined products (primarily diluents, diesel and gasoline), which were purchased for sales and in the
case of raw materials for refining, which was primarily the result of lower average purchase prices due to the COP$12,068,310
million decrease in international benchmark prices for crude oil, natural gas and refined products. This decrease was partially
offset by (i) a COP$5,156,625 increase in the average exchange rate of the Colombian Peso against the U.S. dollar (which led to
increased costs in Colombian Peso terms) and (ii) a COP$2,010,744 million increase in volumes purchased from third parties, primarily
consisting of increased purchases of gasoline volumes due to the closing of the Cartagena refinery for most of the year and increased
local demand in Colombia caused by an increased number of automobiles and the closure of Colombia’s border with Venezuela.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$898,407 million decrease in maintenance and contracted
services cost, which was primarily the result of (i) a COP$585,705 million decrease in contracted services, mainly due to cost
savings achieved through the implementation of our business transformation plan, operating cost optimizations contained in our
partnership contracts for the Rubiales, Nare and Quifa fields, and lower costs related to the Cravo Norte field, in which our
participation in 2015 was lower than in 2014; and (ii) a COP$312,702 million decrease in maintenance costs, mainly due to savings
achieved from our 2015 maintenance plan, which included the restructuring of maintenance services and quantities and the renegotiation
of fees for field maintenance contracts.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$357,835 million decrease in cost of sales, which
was primarily the result from the accumulation of inventories due to the start-up of Reficar’s operations.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$94,625 million decrease in transportation costs,
which was primarily the result of decreased use of tanker trucks as a result of the increased availability of pipelines due to
greater operating stability and improved security conditions during 2015, which led to a decrease in attacks on our infrastructure.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$70,032 million decrease in other minor items.
| | - | ---------------------------------------------------



The factors mentioned above were partially
offset by a COP$341,228 million increase in the amortization, depletion and depreciation of property, plant and equipment, primarily
as a result of higher investments in the Castilla, Chichimene, and Rubiales fields.





74







| | 4.5.1.3 | Operating Expenses before impairment of non-current assets effects
| | ------- | ------------------------------------------------------------------



Operating expenses and selling,
general and administrative expenses before taking into account the  impairment of non-current assets, amounted to
COP$4,400,843 million in 2016, a COP$ 955,872 million (17.8%) decrease as compared to 2015, mainly as a result of the
following factors (see Notes 27 and 29 to our consolidated financial statements for more detail).



| | · | A COP$855,659 million decrease in exploratory expenses as a result of decreased seismic activity
and fewer dry wells reported in the period;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$309,746 million decrease in commissions, fees, freights and services due to optimization
achieved through the implementation of the transformation program.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



This decrease
was partially offset by:



| | · | A COP$134,665 million increase in labor expenses mainly due to the implementation of a voluntary
retirement plan. This plan includes benefits such as monthly income, education and health until the date on which the employees
are granted their legal retirement pension.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$74,868 million increase in other minor items.
| | - | ---------------------------------------------------



Operating expenses and selling, general and
administrative expenses before taking into account the impairment of our non-current assets amounted to COP$5,356,715 million in
2015, a COP$886,451 million (14.2%) decrease as compared to 2014, mainly as a result of the following factors:



| | · | A COP$992,045 million decrease in exploratory expenses as a result of decreased seismic activity
and fewer dry wells reported in the period;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$365,786 million decrease in general expenses due to optimization in commissions fees, services
and agreements achieved through the implementation of the transformation program; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$157,433 million decrease in other minor items.
| | - | ----------------------------------------------------



This decrease
was partially offset by a COP$628,813 million increase in taxes mainly due to the wealth tax applicable for year 2015, as no accrual
was made for wealth tax expenses in 2014.



Each of our operating segments bears the costs
and expenses incurred for product use and marketing and each segment assumes administrative expenses and all non-operational transactions
related to its activity. Discussion of operating expenses by business segment is included in the section Financial Review—Operating
Results—Consolidated Results of Operations—Segment Performance and Analysis.



| | 4.5.1.4 | Impairment of non-current assets
| | ------- | --------------------------------



The impairment of our non-current assets includes
expenses (recovery) of impairment of property, plant and equipment and natural resources, investments in companies and goodwill.
The Company is exposed to certain future risks derived from variations in: a) oil prices, b) refining margins and profitability,
c) cost profile, d) investment and maintenance, e) amount of recoverable reserves, f) market and country risk reflected on the
discount rate, g) changes in domestic and international regulations, among others. Any change in the foregoing variables to calculate
the recoverable amount can have a material effect on the recognition or recovery of impairment charges. For example, the exploration
and production segment is highly sensitive to variation of hydrocarbon prices, while the refining segment is highly sensitive to
changes in product prices and raw materials in the international market, the discount rate given the leveraging, the refining margins,
changes in environmental regulations and the cost structure and the level of capital expenditures. (See Notes 3.2, 4.12, 17 and
28 to our consolidated financial statements for more detail). Impairment of non-current assets amounted to COP$928,747 million
in 2016, COP$7,864,875 in 2015 and COP$2,304,567 in 2014. These impairments are an accounting effect that does not involve any
disbursement of resources and they are susceptible to reversion when the fair value of the asset exceeds its book value.





75







We recognized a smaller impairment in 2016
as compared to 2015 mainly by the variation in estimations of future prices which include the current scenarios of oil quota agreements
of OPEC and the impact of changes in specifications issued by the Marpol (abbreviation of marine pollution) agreement on crude
and fuels with high sulfur content. Additionally, the impairment recognized in 2016 included the effect of operational adjustments
to the variables observed during Reficar’s stabilization period and new ethanol prices affecting Bioenergy.



The impairments recognized in 2015 and 2014
were mainly due to the existing low oil price environment, which resulted in a reduction in forecasted crude oil prices and an
increase in market and country risk, which had been reflected in the discount rate, as well as a reduction in the amount of recoverable
reserves.



| | 4.5.1.5 | Finance Results, Net
| | ------- | --------------------



Financial results, net, mainly includes the
exchange rate gains or losses and interest expense, yields and interest from our investments, non-current liabilities financial
costs (asset retirement obligation and post-benefits plan) and results from our hedging operations.



Finance results, net, amounted to a loss of
COP$1,175,367 million in 2016 as compared to a loss of COP$7,663,104 million in 2015. This decrease in loss was mainly due to:



| | · | The positive impact (COP$6,543,044 million) resulting from the depreciation of the Colombian Peso
against the U.S. dollar on our U.S. dollar net asset position. Our 2016 exchange rate gain was COP$976,430 million, as compared
to a loss of COP$5,566,614 million in 2015.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The adoption of
cash flow hedge accounting in October 2015 and the hedging of our net investment in June 2016 has allowed us to neutralize, overall,
the effect of the exchange rate fluctuation over 88% of the U.S. dollar debt of Ecopetrol S.A., since exchange rate changes are
recognized under other comprehensive income within equity.



| | · | A COP$688,664 million increase in financial income corresponding to the reversal of a provision
we had set aside relating to a litigation concerning Santiago de las Atalayas (the “Comuneros”). In November
2016, the Ministry of Mines and Energy concluded that the amounts being held were not royalties and therefore not due to the Comuneros.
The amounts belonged to Ecopetrol and therefore Ecopetrol recovered the provision it had been recognizing in its financial statements
relating to this dispute. See Note 23.3 to our consolidated financial statement for more detail.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$107,244 million increase in the valuation of our forward hedging operations used to mitigate
the volatility of the exchange rate in the cash flow required for the operations of our subsidiary Ocensa, whose functional currency
is the U.S. dollar.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A COP$145,191 million increase in other minor financial items.
| | - | --------------------------------------------------------------



This decrease in our financial loss was
partially offset by a COP$996,406 million increase in interest expenses as a result of (i) the recognition of Reficar’s
interest expenses which, up to 2015, had been capitalized (ii) the aggregate US$475 million international loans we entered
into in February and May 2016 and the US$500 million international bond we issued in June 2016, and (iii) the negative effect
the Colombian Peso had on our exchange rate on interest due on our foreign debt.



Finance results, net, amounted to a loss of
COP$7,663,104 million in 2015 as compared to a loss of COP$3,510,669 million in 2014. This increase in loss was mainly due to:



| | · | The negative impact (COP$3,296,421 million) resulting from the depreciation of the Colombian Peso
against the U.S. dollar on our U.S. dollar net liability position. Our 2015 exchange rate loss was COP$5,566,614 million, as compared
to a loss of COP$2,270,193 million in 2014.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





76







| | · | A COP$1,007,362 million increase in financial expenses due to higher interest expenses as a result
of the US$1,925 million international loan we entered into in February 2015 and the US$1,500 million international bond we issued
in June 2015 as well as the negative effect the Colombian Peso had on our exchange rate on interest due on our foreign debt.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This increase in our financial loss was partially
offset by (i) a COP$110,600 million gain resulting from the sale of shares in Empresa de Energía de Bogotá and dividends
received from equity instruments and (ii) a COP$40,748 million decrease in other minor financial expenditures.



For more details on our financial income and
expenses see Note 30 – Finance results, net to our consolidated financial statements.



| | 4.5.1.6 | Income Tax
| | ------- | ----------



Income taxes amounted to COP$4,543,046 million
in 2016, COP$710,353 million in 2015 and COP$5,434,855 in 2014. The above is equivalent to an effective tax rate of 58.3%, 12.7%
and 48.9% in 2016, 2015 and 2014, respectively.



The increase in the effective tax rate from
2015 to 2016 was mainly due to: i) lower recovery of deferred tax asset, ii) the effect of the adjustment in deferred tax resulting
from the application of the Colombian tax reform described above, and iii) the recognition of the presumptive tax on subsidiaries
reporting tax losses.



The decrease in the effective tax rate from
2014 to 2015 was mainly due to: (i) foreign exchange losses and a related adjustment for foreign currency translation, (ii) an
adjustment to the tax rate of entities whose tax rate differed from that of Ecopetrol S.A. and (iii) the implementation of a nondeductible
wealth tax in 2015.



See Note 10 –Taxes to our consolidated
financial statements.



| | 4.5.1.7 | Net Income (Loss) Attributable to Owners of Ecopetrol
| | ------- | -----------------------------------------------------



As a result of the foregoing, in 2016, net
income attributable to owners of Ecopetrol was COP$2,447,881 million whereas, in 2015, net loss attributable to owners of Ecopetrol
was COP$7,193,859 million and, in 2014, net income attributable to owners of Ecopetrol was COP$5,046,517 million.



| | 4.5.1.8 | Segment Performance and Analysis
| | ------- | --------------------------------



In this section, including the tables below,
we present our financial information by segment: Exploration and Production, Refining and Petrochemicals and Transportation and
Logistics. See the section Business Overview for a description of each segment.



The following tables present our revenues and
net income by business segment for the years ended December 31, 2016, 2015 and 2014:



Table 46 – Revenues by Business Segment



|                                     |  | Year ended December 31,       |             |   | % Change | 
|------------------------------------ |  | ----------------------------- | ----------- | - | -------- | 
|                                     |  | 2016                          |             |   | 2015     | 
|                                     |  | (Colombian Pesos in millions) |             |   |          | 
|Exploration and Production           |  |                               | 28,221,210  |   |          | 
|Third parties                        |  |                               | 20,527,332  |   |          | 
|Local crude oil                      |  |                               | 553,666     |   |          | 
|Foreign crude oil                    |  |                               | 17,278,579  |   |          | 
|Trading of crude oil                 |  |                               | -           |   |          | 
|Natural gas local                    |  |                               | 1,988,336   |   |          | 
|Foreign natural gas                  |  |                               | 58,809      |   |          | 
|Other income                         |  |                               | 647,942     |   |          | 
|Inter-segment net operating revenues |  |                               | 7,693,878   |   |          | 
|Refining and Petrochemicals          |  |                               | 24,823,714  |   |          | 
|Third parties                        |  |                               | 24,194,024  |   |          | 
|Local refined products               |  |                               | 17,771,166  |   |          | 
|Foreign refined products             |  |                               | 6,330,648   |   |          | 
|Other income                         |  |                               | 92,210      |   |          | 
|Inter-segment net operating revenues |  |                               | 629,690     |   |          | 
|Transportation and Logistics         |  |                               | 10,648,776  |   |          | 
|Third parties                        |  |                               | 3,764,205   |   |          | 
|Inter-segment net operating revenues |  |                               | 6,884,571   |   |          | 
|Eliminations of consolidations       |  |                               | (15,208,139 | ) |          | 
|Total revenues                       |  |                               | 48,485,561  |   |          | 



Total revenues by segment include exports and
local sales to third-parties and inter-segment sales. See the section Financial Review—Operating Results—Consolidated
Results of Operations—Total Revenues for prices and volumes to third parties.





77









Table 47 – Net Income by Business
Segment



|                                                    |  | Year ended December 31,       |            |   | % Change | 
|--------------------------------------------------- |  | ----------------------------- | ---------- | - | -------- | 
|Net income by segment                               |  | 2016                          |            |   | 2015     | 
|                                                    |  | (Colombian Pesos in millions) |            |   |          | 
|Exploration and Production                          |  |                               | 1,322,370  |   |          | 
|Refining and Petrochemicals                         |  |                               | (1,823,020 | ) |          | 
|Transportation and Logistics                        |  |                               | 2,960,449  |   |          | 
|Eliminations of consolidations                      |  |                               | (11,918    | ) |          | 
|Net Income attributable to owners of Ecopetrol S.A. |  |                               | 2,447,881  |   |          | 



| | 4.5.1.9 | Exploration and Production Segment Results
| | ------- | ------------------------------------------



In 2016, exploration and production segment
sales were COP$28,221,210 million, compared to COP$31,732,611 million in 2015. In 2016, our segment sales decreased by 11.1%
as compared with 2015 mainly as a result of:



| | · | Lower sales of crude oil to third parties, which decreased by 20% in 2016 as compared to 2015
                                                                                                               primarily due to: (i) a decline of 36.8 mmbls in crude oil exports and volumes available for commercialization mainly due to
                                                                                                               the decrease in the Ecopetrol Group’s production and delivery of crude oil destined for exports to Reficar for its own
                                                                                                               operations (ii) a decrease in the price of our crude oil basket of US$8.2 per barrel, (iii) a decrease of 2.0 mmboe in sales
                                                                                                               of foreign natural gas mainly due to the termination of our Venezuela sales contract on June 30, 2015. Notwithstanding, the
                                                                                                               decrease in sales to third parties was partially offset by an increase in the devaluation of the Colombian Peso against the
                                                                                                               U.S. dollar and higher sales of crude oil and local natural gas, the latter resulting from an increase in the prices of the
                                                                                                               natural gas basket of US $2/barrel, which was indexed to 2015 prices and impacted by the “El Niño” weather
                                                                                                               phenomenon; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Higher inter-segment revenues, which increased by 26.9% in 2016 as compared to 2015 mainly due
sales of crude oil in order to supply the Cartagena refinery.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



In 2015, exploration and production segment
sales were COP$31,732,611 million, compared to COP$45,155,191 million in 2014. In 2015, our segment sales decreased by 29.7 % as
compared with 2014 mainly as a result of:



| | · | Lower sales of crude oil to third parties, which decreased by 28.5% in 2015 as compared to
                                                                                                               2014 primarily due to: (i) a decline in crude oil exports mainly due to a decrease in the price of our crude oil basket of
                                                                                                               US$43.9 per barrel, (ii) decreased local sales of crude oil mainly due to lower prices of crude oil and (iii) increased
                                                                                                               availability of our transport systems for foreign crude oil. The decrease in sales of crude oil to third parties was offset
                                                                                                               by an increase in our sales volume, particularly in respect of natural gas sales mainly due to increased demand from domestic
                                                                                                               thermal power plants as a result of the El Niño climate phenomenon, which resulted in lack of water for the
                                                                                                               hydroelectric generating plants; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





78







| | · | Lower inter-segment sales, which decreased by 34.5% mainly due to: (i) lower prices of oil and
gas sold to our refining and petrochemical segment and (ii) a greater percentage of oil purchased from third parties in the mix
used in the Barrancabermeja Refinery.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Cost of sales affecting our exploration
and production segment is mainly related to: (i) the amortization and depletion of our production assets, (ii) contracted services
in partnership contracts and (iii) the costs related to maintenance, operational services, electric power, projects and labor in
the exploration and production segment. In addition, this segment’s costs are impacted by the purchases of crude oil from
ANH and third parties, naphtha for dilution and by transportation services.



In 2016, the cost of sales for this segment
decreased by 10.6% as compared with 2015, due to the net effect of:



| | · | Fixed costs decreasing by 3.7%, or COP$268,558 million, in 2016 as compared to 2015, mainly
                                                                                                               due to (i) a decrease in contracted services, maintenance and operating materials as a result of the cost efficiencies
                                                                                                               achieved by the transformation plan, which involved reduction of contract fees and optimization of maintenance timing without
                                                                                                               affecting operations, and (ii) a decrease in services contracted in association with partners as a result of the return of
                                                                                                               the Rubiales and Cusiana contracts to Ecopetrol in July 2016, showing the operational capacity and efficiency of the segment.
                                                                                                               This decrease was partially offset by an increase in the costs of hydrocarbon transportation services as a result of a ship
                                                                                                               or pay contract, indexed to the U.S. dollar, between the exploration, production, transportation and logistics segments.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Variable costs decreasing by 13.3%, or COP$2,467,666 million,
in 2016 as compared to 2015, as a result of (i) reduction in purchases of diluent as part of our cost efficiencies, strategy and
lower production of heavy crude oil, (ii) lower volumes of crude oil purchases from the ANH, third parties and other products
due to the fall in international prices and lower availability of crude oil due to lower production, (iii) lower transportation
costs due to the optimization of the use of tanker trucks and savings due to the increase in viscosity for the transportation
of heavy crude oil through pipelines, (iv) a decrease in services contracted in association with partners as a result of the return
of the Rubiales and Cusiana contracts to Ecopetrol in July 2016, and (v) capitalization of inventories as a result of higher
prices on purchases of crude oil, diluent in December 2016 compared to December 2015. This decrease was partially offset by an
increase of electric power costs and process materials as chemicals and catalysts used in our direct operation of the Rubiales
field and the increase in the average exchange rate of the Colombian Peso against the U.S. dollar (which led to increased costs
in Colombian Peso terms).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In 2015, the cost of sales for this segment
decreased by 8% as compared with 2014, due to the net effect of:



| | · | Fixed costs increasing by 6.2%, or COP$420,083 million, in 2015 as compared to 2014, mainly
                                                                                                               due to a COP$860,539 million increase in the costs of hydrocarbon transportation services as a result of a ship or pay
                                                                                                               contract, indexed to the U.S. dollar, between the exploration and production and transportation and logistics segments of the
                                                                                                               Bicentenario pipeline, offset by COP$440,456 million decrease in maintenance and contracted services cost as a result of the
                                                                                                               implementation of our business transformation plan.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Variable costs decreasing by 12.5%, or COP$2,638,994 million, in 2015 as compared to 2014, as a
result of (i) lower costs related to our purchases of crude oil from the ANH and third parties as well as our purchases of refined
products, in each case due to a decrease in international prices, and (ii) cost savings from our renegotiation of rates in some
of our contracts.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In 2016, operating expenses
before impairment of non-current assets decreased by 70.1% in 2016 as compared to 2015, primarily as a result of (i) lower
expenses related to our exploratory activity as we engaged in less seismic activity and exploratory drilling, (ii) minor commissions,
fees, freight and services as a result of the savings obtained in the implementation of our transformation plan, and (iii) a lower
wealth tax. This decrease was partially offset by an increase in labor expenses due to the implementation of the voluntary retirement
plan.





79







In 2015, operating expenses before impairment
of non-current assets decreased by 23.9% in 2015 as compared to 2014, primarily as a result of (i) lower expenses related to our
exploratory activity as we engaged in less seismic activity and exploratory drilling, (ii) a decrease in commissions, fees, freight
and services as a result of cost savings related to our transformation program, and (iii) the recovery of provisions for litigation
related to the payment of an electric-power-generation contribution by Ecopetrol S.A. and compensation to third parties for infringement
of the free competition clause in the Garcero association contract. This increase was partially offset by an increase in the Colombian
wealth tax.



The impairment of non-current
assetsrecognized in the exploration and production segment in 2016, which totaled COP$196,448 million in 2016 as compared
to COP$4,504,497 million in 2015, decreased by 95.6% as compared to 2015 mainly due to variation in estimations of future prices
which include the current scenarios of oil quota agreements of OPEC and the impact of changes on specifications issued by the Marpol
(abbreviation of marine pollution) agreement on crude and fuels with high sulfur content (See Note 17.1 to our consolidated financial
statements for more detail).



The increased impairment
charges for non-current assets in 2015, which totaled COP$4,504,496 million as compared to COP$965,607 million in 2014, was primarily
due to the existing low oil price environment, which resulted in a reduction in forecasted crude oil prices and an increase in
market and country risk, which was reflected in the discount rate, as well as a reduction in the amount of recoverable reserves.
The most significant cash generation units impacted by the impairments were the following fields: in Colombia, Chichimene, Tibú,
CP09, Apiay, Llanito and La Hocha and in the Gulf of Mexico, K2 and Dalmatian (see Note 17.1 to our consolidated financial statements
for more details).



The segment recorded net
income attributable to owners of Ecopetrol of COP$1,322,370 million in 2016 as compared to net loss attributable to owners
of Ecopetrol of COP$5,851,619 million in 2015 and net income attributable to owners of Ecopetrol of COP$5,089,841 million in 2014.



Lifting and Production Costs



The aggregate average production cost, on a
Colombian Peso basis, has decreased to COP$20,993 per boe during 2016 from COP$21,732 per boe during 2015, primarily due to:



| | · | Extension of our program for reducing operating costs as well as the implementation of our transformation
program. The key optimization strategies contributing to decreased production costs are:
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | Reduction in number of services due to equipment failure, equipment reuse for electric submersible
pump (ESP), less maintenance and well monitoring, renegotiation of tariffs and decrease in time to well interventions.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Less tariffs on surface maintenance, reduction of costs by adjustment in integrity strategy, change
in equipment inspection periods according to condition, decrease of tariffs of administrative items and prioritization of interventions.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Decrease in energy tariffs, reduction of generation with liquid fuels (Diesel - Fuel Oil No.4),
increase in efficiency through the entry of our own generation centers and increase in electrical reliability.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Lower levels of chemical applied in the process of treatment of fluids, biological treatment insurance,
reduction in production, transportation and disposal of oily waste and reduction of contracting, inspection and repair through
renegotiation of contracts.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





80







| | (v) | A decrease in production volumes in direct and associated contracts (excluding production tests
and discovery of undeveloped fields), mainly due to smaller production in the Yarigui-Cantagallo and Pauto fields of direct operation
and a decrease in production volumes from fields held as part of a partnership, such as Rubiales (first half of 2016), La Cira
Infantas and Chuchupa, which in turn was primarily due to the prioritization of investments for assets of fast cash return and
our policy of profitable fields.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As a result of the above-mentioned factors,
our aggregate average production cost, on a Colombian Peso basis, decreased in 2016 as compared to 2015. On a dollar basis, it
decreased to US$6.88 per boe in 2016 from US$7.92 per boe in 2015 also due to an 11.21% depreciation of the average exchange rate
of the Colombian Peso against the U.S. dollar in 2016.



The aggregate average lifting cost, on a Colombian
Peso basis, has decreased to COP$19,799 per boe during 2016 from COP$20,308 per boe during 2015, primarily due to:



| | · | Continuation of our program for reducing operating costs as well as the implementation of our transformation
program. The key optimization strategies contributing to decreased production costs are:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | Reduction in number of services due to equipment failure, equipment reuse for electric submersible
pump (ESP), less maintenance and well monitoring, renegotiation of tariffs and decrease in time to well interventions.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Less tariffs on surface maintenance, reduction of costs by adjustment in integrity strategy, change
in equipment inspection periods according to condition, decrease of tariffs of administrative items and prioritization of interventions.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Decrease in energy tariffs, reduction of generation with liquid fuels (Diesel - Fuel Oil No.4),
increase in efficiency through the entry of our own generation centers and increase in electrical reliability.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Lower levels of chemical applied in the process of treatment of fluids, biological treatment insurance,
reduction in production, transportation and disposal of oily waste and reduction of contracting, inspection and repair through
renegotiation of contracts.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A decrease in production volumes in direct and associated contracts (excluding production tests
and discovery of undeveloped fields), mainly due to smaller production in the Yarigui-Cantagallo and Pauto fields of direct operation
and a decrease in production volumes from fields held as part of a partnership, such as Rubiales (first half of 2016), La Cira-Infantas and Chuchupa, which in turn was primarily due to the prioritization of investments for assets of fast cash return and
our policy of profitable fields.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As a result of the above-mentioned factors,
our aggregate average lifting cost, on a Colombian Peso basis, decreased in 2016 as compared to 2015. On a dollar basis, it decreased
to US$6.49 per boe in 2016 from US$7.40 per boe in 2015 also due to an 11.21% depreciation of the average exchange rate of the
Colombian Peso against the U.S. dollar in 2016.



The difference between the aggregate average
lifting cost and aggregate average production cost is that lifting costs do not include the costs related to consumption of hydrocarbons
by us in our production process or that Ecopetrol sold to our refineries and natural gas liquid plants.



The following table sets forth crude oil and
natural gas average sales prices, the aggregate average lifting costs and aggregate average unit production cost for the years
ended December 31, 2016, 2015 and 2014.





81







Table 48 – Crude Oil and Natural
Gas Average Prices and Costs



|                                                                     |  | 2016 |         |  | 2015 |  |         | 2014 | 
|-------------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- | 
|Crude Oil Average Sales Price (U.S. dollars per barrel)(1)           |  |      | 35.7    |  |      |  | 43.9    |      | 
|Crude Oil Average Sales Price (COP$ per barrel)(1)                   |  |      | 108,337 |  |      |  | 118,115 |      | 
|Natural Gas Average Sales Price (U.S. dollars per barrel equivalent) |  |      | 23.5    |  |      |  | 22.0    |      | 
|Natural Gas Average Sales Price (COP$ per barrel equivalent)         |  |      | 71,893  |  |      |  | 60,120  |      | 
|Aggregate Average Unit Production Costs (U.S. dollars per boe)(2)    |  |      | 6.88    |  |      |  | 7.92    |      | 
|Aggregate Average Unit Production Cost (COP$ per boe)(2)             |  |      | 20,993  |  |      |  | 21,732  |      | 
|Aggregate Average Lifting Costs (U.S. dollars per boe)(3)(4)(5)      |  |      | 6.49    |  |      |  | 7.40    |      | 
|Aggregate Average Lifting Costs (COP$ per boe)(3)(4) (5)             |  |      | 19,799  |  |      |  | 20,308  |      | 








| | (1) | Corresponds to our average sales price on a consolidated basis.
| | --- | ---------------------------------------------------------------

| | (2) | Unit production costs correspond to consolidated average costs on total production volumes net
of royalties. Production costs do not include costs related to transport, commercialization and administrative expenses.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Lifting costs per barrel are calculated based on total production (excluding production tests and
discovered undeveloped fields), which are net of royalties, and correspond to our lifting costs on a consolidated basis.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | The cost indicator is calculated by using the cost of production (does not include costs related
to hydrocarbons consumption by Ecopetrol in the production process, such as by our refineries and natural gas liquid plants) and
dividing by the net produced volume (excluding royalties) as the denominator.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | As a result of the evaluation of control over companies under IFRS, Ecopetrol does not consolidate
Savia Perú and Equion. As a consequence, the information in the table above for this annual report (which has been prepared
under IFRS) differs from the information we previously published for 2014 under Colombian Government Entity GAAP (where we did
consolidate Savia Perú and Equion).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.5.1.10 | Transportation and Logistics Segment Results
| | -------- | --------------------------------------------



In 2016, our transportation and logistics
segment sales were COP$10,648,776 million compared to COP$10,844,550 million in 2015. The 1.8% decrease in 2016 as compared
with 2015 was mainly due to an 11.3% decrease in the volume of crude oil transported by our pipelines, which was primarily due
to the production decrease at the national level, in spite of (i) the positive effect on our U.S. dollar-indexed transportation
fees resulting from the devaluation of the Colombian Peso against the U.S. dollar and (ii) a 3.7% increase in the volume of refined
products transported in the Galán-Sebastopol system to meet the demand for fuel in the country’s interior and the
start-up of Reficar. Sales to third parties decreased in 2016 as compared to 2015 primarily due to the segment received income
from the transportation services to Pacific Rubiales for its participation in the Rubiales field, and once the field returned to
us in July 2016, these services were recognized as inter-segment sales.



In 2015, our transportation and logistics segment
sales were COP$10,844,550 million compared to COP$8,343,934 million in 2014. This 30% increase in 2015 as compared with 2014 was
mainly due to higher volume of crude oil transported by the Ocensa, Caño Limón Coveñas and Oleoducto Transandino
pipelines due to the decline in the number of attacks on our infrastructure and the positive effect on our U.S. dollar-indexed
transportation fees resulting from the devaluation of the Colombian Peso against the U.S. dollar.



The cost of sales for our transportation
and logistics segment is mainly related to: (i) project costs associated with the maintenance of transportation networks and (ii)
operating costs related to these systems, including the costs of labor, energy, fuels and lubricants and others.



The cost of sales amounted to COP$3,349,791
million in 2016 as compared to COP$3,744,422 million in 2015. The cost of sales for this segment decreased by 10.5% in 2016 as
compared with 2015 mainly due a decrease in costs associated with maintenance, operating supplies and materials due to the continuity
of our program to optimize our operating costs. This decrease was partially offset by an increase in material processing costs
needed for power generation in pumping stations and an increase in depreciation due to a higher level of investments in the segment.



The cost of sales amounted to
COP$3,744,422 million in 2015 and COP$3,941,052 million in 2014. The cost of sales for this segment decreased by 5% in 2015
as compared with 2014 mainly due to a decrease in costs associated with maintenance and operating supplies and materials.
This decrease was partially offset by an increase in depreciation and amortization due to our increased investments in this
segment.





82







In 2016, operating expenses before the impairment
of non-current assets increased by 30.7% as compared to 2015 due to a recovery of environmental provisions in 2015, no similar
recoveries in 2016 and an increase in labor costs as a result of the implementation of the voluntary retirement plan. This increase
was partially offset by lower wealth and industry taxes.



In 2015, operating expenses before the impairment
of non-current assets decreased by 16.2% as compared to 2014 due to decreased expenses related to social investment and security
agreements, and more stable operations due to a decrease in repairs of our transportation systems. This decrease was partially
offset by (i) the Colombian wealth tax implemented in 2015 and, (ii) increased depreciation and amortization.



The impairment of non-current assets
recognized in the segment in 2016 which totaled COP$41,062 million recovery in 2016 as compared to COP$81,388 million expense in
2015, decreased by 150.5% as compared to 2015 mainly by the incorporation, in the assessment of the recovery amount of this segment’s
assets, of flows associated to the San Fernando - Apiay system project that affects the recoverable amount of the Llanos transportation
line, partially offset by an increase in impairment of assets related to the southern transportation line. (See Note 17.3 to our
consolidated financial statements for more detail).



The increased impairment charges for non-current
assets in 2015, which totaled COP$81,388 million as compared to a COP$1,121 million recovery of impairment in 2014 was primarily
due to Colombia’s hydrocarbon production curves, based on the crude oil price environment and pipeline transportation
rates (see Note 17.3 to our consolidated financial statements).



The segment recorded net income attributable
to owners of Ecopetrol of COP$2,960,449 million in 2016 as compared to net income of COP$2,819,759 million in 2015 and COP$1,758,777
million in 2014.



| | 4.5.1.11 | Refining and Petrochemicals Segment Results
| | -------- | -------------------------------------------



In 2016, the refining and petrochemical
segment sales were COP$24,823,714 million compared to COP$23,245,676 million in 2015. In 2016, sales of refined products and
petrochemicals increased by 6.8% as compared with 2015, mainly due to an increase in the volume of domestic and export sales mainly
in mid-distillates due to the startup of operations at Reficar. This increase was partially offset by a decrease or our average
products basket price due to the decrease in the international price of crude oil.



In 2015, the refining and petrochemical segment
sales were COP$23,245,676 million compared to COP$27,172,300 million in 2014. In 2015, sales of refined products and petrochemicals
decreased by 14.5% as compared with 2014, mainly due to: (i) a decrease in the international price of fuels and (ii) a decrease
in foreign sales volumes of fuel oil due to the low water level in the Rio Magdalena. This decrease was partially offset by (i)
an increase in the volume of domestic sales due to increased local demand for fuel resulting from an increased number of vehicles
and the closure of Colombia’s border with Venezuela that led to higher diesel demand and (ii) an increase in intercompany
sales due to higher volumes of diluent sold to our exploration and production segment.



The cost of sales for our refined products
and petrochemicals segment is mainly related to the purchase of crude oil and natural gas for our refineries, imported products
to substitute for the loss of production due to the closure of Reficar as the new refinery was being built for most of 2014 and
2015, feedstock transportation services, services contracted for maintenance of the refinery and the amortization and depreciation
of refining assets. Cost of sales amounted COP$22,843,987 million in 2016, compared to COP$20,758,808 million in 2015 and COP$25,537,228
million in 2014.



In 2016, the cost of sales for this
segment increased 10% as compared with 2015, principally due to the operation of Reficar’s units in 2016 which led to
(i) an increase in crude oil purchases through import and inter-segment transactions as Reficar required a special raw
material or ‘diet’ during the stabilization and performance testing period which increased production cost, (ii)
an increase in the depreciation of Reficar’s units (iii) inventory consumption that had been in stock in December 2015,
and (iv) higher costs for services contracted, materials of process, maintenance and electrical power. This increase was
partially offset by lower imports of products and the excellent operational performance of the Barrancabermeja Refinery.





83







In 2015, the cost of sales for this segment
decreased 18.7% as compared with 2014, principally due to lower raw material costs, which corresponded to the decrease in international
oil prices and lower operating costs as a result of cost optimization at the Barrancabermeja Refinery. This decrease was partially
offset by higher imports of gasoline due to increased local demand for fuel resulting from an increased number of vehicles and
the closure of Colombia’s border with Venezuela.



In 2016, operating expenses before the impairment
of non-current assets increased by 27.3% as compared to 2015, due to an increase in labor expenses related to our voluntary
retirement plan in 2016 and other expenses related to the start-up of operations at Reficar.



In 2015, operating expenses before the impairment
of non-current assets increased by 23% as compared to 2014, due to higher levels of investment for the Reficar modernization project,
the Colombian wealth tax implemented in 2015 and the increase in other expenses related to the start-up of operations at Reficar.



The impairment of non-current assets
recognized in the segment in 2016, which totaled COP$773,361 million in 2016 as compared to COP$3,278,993 million in 2015, decreased
by 76.4% as compared to 2015. The 2016 scenario incorporated the refining margins that include the effect of Marpol in 2016 compared
to 2015, partially offset by the effect of adjustment of operational variables based on that observed during Reficar’s stabilization
period and new ethanol prices on Bioenergy’s impairment (see Note 17.2 to our consolidated financial statements). As mentioned
earlier, the refining segment is highly sensitive to changes in product prices and raw materials in the international market, the
discount rate given the leveraging, the refining margins, changes in environmental regulations and cost structure and the level
of capital expenditures.



The increased impairment charges for non-current
assets in 2015, which totaled COP$3,278,993 million in 2015 as compared to COP$1,340,086 million in 2014 was recorded by the Cartagena
Refinery due to the current low oil price environment, which resulted in a reduction in expected refining margins in the coming
years, and an increase in market and country risk, which has been reflected in the discount rate (see Note 17.2 to our consolidated
financial statements).



The gross margin in 2016 was 8%, compared to
10.7% in 2015. The decrease in the gross margin was explained principally by decreased operational activity during the period of
stabilization and testing of Reficar.



The gross margin in 2015 was 10.7%, compared
to 6% in 2014. The increase in the gross margin was explained principally by decrease in the oil price (feedstock) compared to
the decrease in fuel prices (output).



The refining and petrochemicals segment recorded
net loss attributable to owners of Ecopetrol of COP$1,823,020 million in 2016 as compared to a net loss attributable to owners
of Ecopetrol of COP$4,016,050 million in 2015 and COP$1,627,705 million in 2014.



| | 4.6 | Liquidity and Capital Resources
| | --- | -------------------------------



Our principal sources of liquidity in 2016
were cash flows from our operations amounting to COP$14,232,940 million, and cash flows from financing activities, mainly from
the proceeds of our net movement of indebtedness, which totaled COP$ 1,444,723 million.



Our principal uses of cash in 2016 were
(i) COP$5,837,477 million in capital expenditures, which included investments in property, plant and equipment and natural
and environmental resources and (ii) COP$5,446,507 in investment of liquidity surpluses in portfolios, (iii) dividend
payments for the fiscal year 2015 amounting to COP$1,712,298 million, which included the last installment of dividends to the
majority shareholder relating to fiscal year 2014 for COP$690,177 million and the payment of dividends to non-controlling
interest in 2016 for COP$1,022,121 million.



On January 29, 2016, we entered into an international
credit agreement for an aggregate amount of US$175 million with The Bank of Tokyo-Mitsubishi UFJ, Ltd. The credit agreement has
a term of five years, repayable with a 2.5 year grace period on principal and interest, payable semi-annually at a rate of Libor
plus 145 basis points.





84







On February 23, 2016, we entered into a bilateral
commercial loan agreement with Bancolombia S.A. for COP$990 billion (approximately US$330 million at the representative exchange
rate of as of December 31, 2016). This loan agreement had a term of 8 years and a 2-year grace period on principal, with interest
payable semiannually at a rate of DTF TA plus 560 basis points. Ecopetrol prepaid this loan in full with excess liquidity in October
2016.



On May 16, 2016, we entered into a bilateral
commercial loan agreement with Export Development Canada, an export promotion agency of the Canadian Government for US$ 300 million.
This loan agreement has a term of five years, with interest payable semi-annually at rate of six-month Libor + 140 basis points.



On June, 2016, we issued US$500 million (COP$1,500
billion according to the COP$/US$ exchange rate as of December 31, 2016) aggregate principal amount of our SEC-registered 5.875%
notes due 2023. The notes were listed on the NYSE.



| | 4.6.1 | Review of Cash Flows
| | ----- | --------------------



Cash from operating activities



Net cash provided by operating activities
increased by 21.9% in 2016 as compared to 2015, mainly as a result of (i) lower working capital needs mainly due to the
higher oil prices observed at the end of 2016 versus the end of 2015, (ii) a 4% increase in our operational income before
depreciation, depletion and amortization (DD&A) and impairment of non-current assets resulting from a decrease in our
costs and operational expenses (before DD&A and impairment) due to our savings generated by the transformation plan. This
increase was partially offset by (i) the decrease in international prices of crude oil during 2016, and (ii) an increase in
income tax paid by the transportation and logistics segment due to the better results in 2015.



Net cash provided by operating activities decreased
by 35.6% in 2015 as compared to 2014, mainly as a result of: (i) a 33.2% decrease in our gross income resulting from the decrease
in international prices of crude oil during 2015 and (ii) higher operating expenses due to the Colombian wealth tax implemented
and paid in 2015. This decrease was partially offset by a decrease in income tax paid due to the decrease in our income before
tax for the year and lower working capital needs due to a decrease in inventories, trade receivables and accounts payable.



Cash used in investing activities



In 2016, net cash used in investing activities
decreased by 26.8% as compared to 2015, mainly as a result of: (i) a 62.4% decreased investments in capital expenditures due to
the effect of decreasing oil prices and the end of the Reficar modernization project, and (ii) additional cash proceeds from the
sale of our investments in Empresa de Energía de Bogotá and Interconexion Electrica S.A, which totaled COP$966,715
million in the aggregate. This decrease was partially offset by increased investments of our excess liquidity in our investment
portfolios, which in turn resulted from the savings we achieved and the recovery of the price of oil during the second half of
2016.



In 2015, net cash used in investing activities
decreased by 2.4% as compared to 2014, mainly as a result of: (i) a decrease in the amount of dividends we received from associates
and joint ventures companies (ii) slightly larger investments in capital expenditures, mainly relating to the Reficar modernization
project and our drilling campaigns, primarily in the Castilla, Chichimene and Rubiales fields, and (iii) a lower net cash contribution
from purchase and sale of fixed income investments. This decrease was partially offset by cash proceeds from the sale of our investment
in Empresa de Energia de Bogotá, which totaled COP$613,998 million.





85







Cash used in financing activities



Net cash used in financing activities increased
by 98.5% in 2016, as compared to 2015, due to a decrease in cash from borrowings of COP$5,151,937 million which was partially offset
by a decrease in dividends payments of COP$3,781,099 million in 2016 as compared to 2015.



Net cash used in financing activities decreased
by 81% in 2015, as compared to 2014, due to a COP$7,023,166 million decrease in dividend payments, which was partially offset by
an increase in borrowing and interest payments of COP$1,069,146 million in 2015 as compared to 2014, which in turn was due to the
US$1,925 million international loan we entered into in February 2015 and the US$1,500 million international bond we issued in June
2015.



| | 4.6.2 | Capital Expenditures
| | ----- | --------------------



Our consolidated capital expenditures in 2016,
2015 and 2014 were COP$5.8 trillion, COP$15.5 trillion and COP$15.6 trillion, respectively. These investments were distributed by
business segment on average, for the past three years as follows: 61.2% for the exploration and production segment, 22.1% for refining
and petrochemicals and 16.7% for the transportation and logistics segment. See Note 34.1.2 to our consolidated financial statements
for more detail about capital expenditures by segment.



Our investment plan approved for 2017 totals
US$3,500 million. The investments will be distributed as follows: 81% for exploration and production, 10% for refining and petrochemicals,
8% for transportation and logistics, and 1% for other investments.



The resources required for the investment plan
will be funded through internal cash generation with no need to raise additional net financing.



| | 4.6.3 | Dividends
| | ----- | ---------



In 2016, we paid the last installment of dividends
relating to our net income to the Nation of COP$690,177 million and our transportation and logistics’ subsidiaries paid dividends
to their non-controlling shareholder for COP$1,022,121 million. Given the net loss we reported in 2015, our shareholders at the
ordinary general shareholder’s meeting did not approve distribution of dividends for 2015.





On March 31, 2017, our shareholders at
the ordinary general shareholders’ meeting approved dividends for the fiscal year ended December 31, 2016 amounting to COP$945,684
million, or COP$23 per share, based on the number of outstanding shares as of December 31, 2016. The dividend was paid in one
installment on April 28, 2017.



| | 4.7 | Summary of Differences between Internal Reporting (Colombian IFRS and IFRS)
| | --- | ---------------------------------------------------------------------------



We prepare our interim and annual statutory
financial information in accordance with our internal reporting policies, which follow Colombian IFRS and differ in certain significant
aspects from IFRS. The following table sets forth our consolidated net income and equity for years ended December 31, 2016, 2015
and 2014, in accordance with Colombian IFRS and IFRS:



Table 49 – Consolidated Net Income
and Equity



|                                                                |  | For the year ended December 31, |            |   |          | 
|--------------------------------------------------------------- |  | ------------------------------- | ---------- | - | -------- | 
|                                                                |  | (Colombian Pesos in millions)   |            |   | % Change | 
|                                                                |  | 2016                            |            |   | 2015     | 
|Net income attributable to owners of Ecopetrol (IFRS)           |  |                                 | 2,447,881  |   |          | 
|Cash flow hedge for future company exports                      |  |                                 | (494,604   | ) |          | 
|Exchange rate effects on tax bases – Deferred tax               |  |                                 | (388,568   | ) |          | 
|Net income Attributable to owners of Ecopetrol (Colombian IFRS) |  |                                 | 1,564,709  |   |          | 
|Net Equity (IFRS)                                               |  |                                 | 43,560,501 |   |          | 
|Cash flow hedge for future company exports                      |  |                                 | (39,803    | ) |          | 
|Exchange rate effects on tax bases – Deferred tax               |  |                                 | 1,799,020  |   |          | 
|Net Equity (Colombian IFRS)                                     |  |                                 | 45,319,718 |   |          | 





86







As noted above, certain differences exist between
our net income and equity as determined in accordance with our internal reporting policies, which follow Colombian IFRS, which
are used for management reporting purposes, as presented in the business segment information, and our net income and equity as
determined under IFRS, as presented in our consolidated financial statements.



The primary differences between Colombian IFRS
and IFRS as they apply to our results of operations are summarized below:



| | · | Cash flow hedge for future company exports.  In September 2015, in order
to hedge the effect of exchange rate volatility on Ecopetrol’s foreign currency debt, Ecopetrol’s Board of Directors
approved a cash flow hedge for future crude oil exports. According to IAS 39 – Financial Instruments, Ecopetrol implemented
this hedge beginning on October 1, 2015, the date on which it formally completed the related hedging documentation.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Under Colombian IFRS, the Contaduria
General de la Nación (CGN for its acronym in Spanish) issued Resolution 509, which allows companies to apply hedge accounting
for non-derivative financial instruments from any date within the transition period or the first period of application of International
Accounting Standards in Colombia, even if such company has not yet formally documented the hedging relationship, the objective
or the risk management strategy. Under these rules, Ecopetrol applied cash flow hedge accounting from January 1, 2015 in its financial
statements under Colombian IFRS.



As a result of this accounting policy
differences, for the year ended December 31, 2016, our net income as reported under IFRS was COP$494,604 million higher than our
net income as reported under Colombian IFRS.



| | · | Exchange rate effects on tax bases – Deferred tax. According to IAS
12.41, companies with a U.S. dollar functional currency and profit or tax loss in Colombian Pesos are required to recognize deferred
taxes attributable to the difference between the carrying amounts of non-monetary assets in their financial statements and their
respective tax bases converted from Colombian Pesos to U.S. dollars using the exchange rate on the closing date. The effect of
the temporary difference is charged to profit and losses without a cash outflow expected in the future. Under local accounting
principles, the result attributable to the aforementioned difference in accounting policies does not generate deferred taxes at
December 31, 2016.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ecopetrol’s functional currency is the
Colombian Peso and it consolidates some subsidiaries whose functional currency is the U.S. dollar but who settled their taxes in
Colombian Pesos. As a result of the application of paragraph 41 – IAS 12, such subsidiaries are required to calculate deferred
taxes under IFRS.



As a result of this accounting policy difference,
for the year ended December 31, 2016, our net income attributable to owners of Ecopetrol as reported under IFRS was COP$388,568
million higher than our net income attributable to owners of Ecopetrol as reported under Colombian IFRS.





87







The application of IAS12.41 also
generated adjustments to our goodwill and investments in companies impairments of COP$86,781 million in 2016 and COP$418,872
million in 2015 in connection with our purchase of subsidiaries whose functional currency is the U.S. dollar as well as
adjustments to our revenue from the equity method of COP$71,056 million in 2016 and COP$81,808 million in 2015 in connection
with our associates and joint ventures whose functional currency is the U.S. dollar.



As a result of these accounting policy differences
described above, for the year ended December 31, 2016, we reported net income attributable to the owners of Ecopetrol under IFRS
of COP$2,447,881 million as opposed to a net income attributable to the owners of Ecopetrol of COP$1,564,709 million reported under
Colombian IFRS for the same period. For the year ended December 31, 2015, these same accounting differences led us to report a
net loss under IFRS of COP$7,193,859 million as opposed to a net loss of a COP$3,987,726 million reported under Colombian IFRS
for the same period.



| | 4.8 | Financial Indebtedness and Other Contractual Obligations
| | --- | --------------------------------------------------------



As of December 31, 2016, we had outstanding
consolidated indebtedness of COP$52.2 trillion, which corresponded primarily to the following long-term transactions:



Table 50 – Consolidated Financial
Indebtedness



|Company                |  | Type            |  | Initial Date       |  | Original Amount       |  | Maturity           |  | Interest Rate |                  |   | Amortization
|---------------------- |  | --------------- |  | ------------------ |  | --------------------- |  | ------------------ |  | ------------- | ---------------- | - | ------------
|Ecopetrol S.A.         |  | Bonds           |  | July 23, 2009      |  | US$1,500 million      |  | July 23, 2019      |  |               | 7.625            | % |             
|                       |  |                 |  | September 18, 2013 |  | US$350 million        |  | September 18, 2018 |  |               | 4.250            | % |             
|                       |  |                 |  | September 18, 2013 |  | US$1,300 million      |  | September 18, 2023 |  |               | 5.875            | % |             
|                       |  |                 |  | September 18, 2013 |  | US$850 million        |  | September 18, 2043 |  |               | 7.375            | % |             
|                       |  |                 |  | May 28, 2014       |  | US$2,000 million      |  | May 28, 2045       |  |               | 5.875            | % |             
|                       |  |                 |  | September 16, 2014 |  | US$1,200 million      |  | January 16, 2025   |  |               | 4.125            | % |             
|                       |  |                 |  | June 26, 2015      |  | US$1,500 million      |  | June 26, 2026      |  |               | 5.375            | % |             
|                       |  |                 |  | June 15, 2016      |  | US$500 million*       |  | September 18, 2023 |  |               | 5.875            | % |             
|                       |  |                 |  | December 1, 2010   |  | COP$138,700 million   |  | December 1, 2017   |  |               | Floating         |   |             
|                       |  |                 |  | December 1, 2010   |  | COP$479,900 million   |  | December 1, 2020   |  |               | Floating         |   |             
|                       |  |                 |  | December 1, 2010   |  | COP$284,300 million   |  | December 1, 2040   |  |               | Floating         |   |             
|                       |  |                 |  | August 27, 2013    |  | COP$120,950 million   |  | August 27, 2018    |  |               | Floating         |   |             
|                       |  |                 |  | August 27, 2013    |  | COP$168,600 million   |  | August 27, 2023    |  |               | Floating         |   |             
|                       |  |                 |  | August 27, 2013    |  | COP$347,500 million   |  | August 27, 2028    |  |               | Floating         |   |             
|                       |  |                 |  | August 27, 2013    |  | COP$262,950 million   |  | August 27, 2043    |  |               | Floating         |   |             
|                       |  | Bank Loans*     |  | May 27, 2013       |  | COP$1,839 billion**   |  | May 24, 2025       |  |               | Floating         |   |             
|                       |  |                 |  | February 12, 2015  |  | US$1,925 million      |  | February 12, 2020  |  |               | Floating         |   |             
|                       |  |                 |  | January 29, 2016   |  | US$175 million        |  | February 11, 2021  |  |               | Floating         |   |             
|                       |  | ECAs            |  | March 22, 2013     |  | US$245 million        |  | July 25, 2023      |  |               | Floating         |   |             
|                       |  |                 |  | March 22, 2013     |  | US$151 million        |  | July 6, 2019       |  |               | Floating         |   |             
|                       |  |                 |  | May 16, 2016       |  | US$300 million        |  | May 24, 2021       |  |               | Floating         |   |             
|Reficar                |  | Project Finance |  | December 30, 2011  |  | US$3,497 million      |  | December 20, 2027  |  |               | Floating / Fixed |   |             
|Ocensa                 |  | Bond            |  | May 7, 2014        |  | US$500 million        |  | May 7, 2021        |  |               | 4.000            | % |             
|Oleoducto Bicentenario |  | Bank Loan       |  | July 5, 2012       |  | COP$2,100 billion**   |  | July 5, 2024       |  |               | Floating         |   |             
|ODL                    |  | Bank Loan*      |  | August 1, 2013     |  | COP$800,000 million** |  | August 1, 2020     |  |               | Floating         |   |             








* Reopening
of bond due to 2023.

** Bank loans
refinanced from their original conditions.



The long term debt transactions executed in
2016 were as follows:



| | · | On January 29, 2016, Ecopetrol S.A. entered into an international credit agreement in an aggregate
amount of US$175 million with The Bank of Tokyo-Mitsubishi UFJ, Ltd. The credit agreement has a term of five years and a 2.5 year
grace period on principal, with interest payable semi-annually at a rate of Libor plus 145 basis points.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On February 23, 2016, Ecopetrol S.A. entered into a bilateral commercial loan agreement with
                                                                                                               Bancolombia S.A. in an aggregate amount of COP$990 billion (approximately US$330 million at the representative exchange rate
                                                                                                               as of December 31, 2016). This loan agreement had a term of 8 years and a 2-year grace period on principal, with
                                                                                                               interest payable semiannually at a rate of DTF TA plus 560 basis points. As of the date of this annual report, this loan has
                                                                                                               been prepaid in full.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





88







| | · | On May 16, 2016, Ecopetrol S.A. entered into a bilateral loan agreement with Export Development
Canada (EDC), an agency for the promotion of exports of the Government of Canada, in an aggregate amount of US$300 million. This
loan agreement has a term of 5 years with principal due at maturity and interest payable semiannually at a rate of LIBOR plus 140
basis points.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On June 15, 2016, Ecopetrol S.A reopened its SEC-registered 5.875% Notes due 2023 in an aggregate
amount of US$500 million (COP$1,500 billion according to the COP$/US$ exchange rate as of December 31, 2016). The notes were
listed on the NYSE.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On November 16, 2016, the Financial Superintendence of Colombia authorized Ecopetrol’s Bond
Issuance and Allocation Programme renewal for three additional years, up until November 10, 2019. Thus far, Ecopetrol has issued
under the Programme COP$ 900 billion. The Programme has a remaining amount of up to COP$2,100 billion and no modifications were
made during the renewal process.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Contractual Obligations



We enter into various commitments and contractual
obligations that may require future cash payments. The following table summarizes our contractual obligations as of December 31,
2016.



Table 51 – Our Contractual Obligations



|COP$ in millions                                       |  | Payments due by period |              
|------------------------------------------------------ |  | ---------------------- | -------------
|Contractual obligations                                |  | Total                  |              
|Employee Benefit Plan                                  |  |                        | 26,365,279.0 
|Contract Service Obligations                           |  |                        | 5,991,167.1  
|Operating Lease Obligations                            |  |                        | 652,681.2    
|Natural Gas Supply Agreements                          |  |                        | 2,107,163.5  
|Purchase Obligations                                   |  |                        | 1,318,087.2  
|Energy Supply Agreements                               |  |                        | 795,408.8    
|Capital Expenditures                                   |  |                        | 621,571.7    
|Build, Operate, Maintain and Transfer Contracts (BOMT) |  |                        | 576,758.8    
|Capital (Finance) Lease Obligations                    |  |                        | 381,838.6    
|Financial Sector Debt                                  |  |                        | 20,162,033.8 
|Bonds                                                  |  |                        | 30,909,787.0 
|Total                                                  |  |                        | 89,881,776.78



The table does not include the contractual obligations of Equion,
Savia and Ecodiesel, which do not consolidate within the Ecopetrol’s Group.



| | 4.9 | Off Balance Sheet Arrangements
| | --- | ------------------------------



As of December 31, 2016, we did not have off-balance
sheet arrangements of the type that is required to be disclosed under Item 5.E of Form 20-F.



| | 4.10 | Trend Analysis and Sensitivity Analysis
| | ---- | ---------------------------------------



Trend Analysis



Ongoing Trends



Ecopetrol updated its 2020 Business Plan on
September 29, 2016. This Plan is based on three fundamental pillars: i) protection of cash and cost efficiency; ii) strict capital
discipline; and iii) growth in reserves and production; these pillars will strengthen the Company’s financial sustainability
and afford it opportunities for both organic and inorganic growth, generating value and profitability for its shareholders.





89







According to this business plan, during 2017
the Company will continue to pursue its transformation to ensure operational and financial sustainability. Ecopetrol has named
Phase 3.0 of the business Transformation plan “Ecopetrol’s New Frontier”. It will focus on opening up new markets;
multi-year fields development plans; improved return on assets; attracting and retaining the best human talent; committing ourselves
to integrity, safe operations, environment consciousness and joint prosperity with communities in which we operate and execute
projects.



We believe that our strategy of diversifying
our export destinations and sales under term contracts with fixed discounts to reference prices will help to mitigate the impact
of the current crude oversupply over the spread of our export basket. We forecast a discount between US$9 and US$10 per barrel
compared to ICE Brent crude in 2017.



Furthermore, with the full operation of all
units of Reficar since 2016 and shifting from stabilization to optimization, Ecopetrol’s trade balance is expected to continue
improving due to the reduction of gasoline imports and incremental exports of fuels. Reficar’s fuels production is expected
to continue being allocated primarily in the domestic market, with a surplus to be exported.



Adding reserves and maintaining the pace of
production are the Company’s focus. The exploration campaign will be focused in regions of high prospectivity. Investment
in exploration will rise from US$ 282 million to US$ 650 million, thus increasing offshore wells from one to six and onshore wells
from five to 11 from 2016 to 2017. Enhanced recovery will continue to leverage additional reserves in mature fields.



We stress that a strong cash position allows
us to assess opportunities for inorganic growth of Ecopetrol ‘s reserves.



The Company expects to continue the divestment
program and expects to receive during 2017 between US$500 and US$1,000 million. The Company is in the process of carrying out the
sale of non-strategic assets and shareholdings, such as Propilco, its remaining shares in Empresa de Energía de Bogota and
minor production fields.



In order to preserve its investment grade ratings,
the Company seeks to maintain financial sustainability and adequate levels of indebtedness. In 2016 international bonds were issued
totaling US$ 500 million and commercial loans were entered into totaling US$ 475 million. Going forward, and according with the
assumptions of the business plan, the Company does not foresee the issuance of new debt or short-term financing.



The Company will continue monitoring oil price
scenarios to make the proper decisions and take preventive actions to ensure financial sustainability in 2017 such as: prioritization
of investments associated with regulatory commitments and project completion, temporary closing of producing assets with negative
margins, redefining and prioritizing maintenance activities and additional austerity measures related to administrative expenses,
sponsorships and labor recruitment.



Sensitivity Analysis



Sensitivity Analysis of Reserves



The following table provides information about
the sensitivity analysis conducted on our oil and gas reserves as of December 31, 2016, taking into account ICE Brent crude
oil prices that reasonably reflect management’s view of crude oil prices given prevailing market conditions.



Table 52 – Sensitivity Analysis of
Reserves



|                                 |  | Oil and NGL (million barrels) |       |  | Natural Gas (bcf) |  |       | Total Oil and Gas (Mmboe) | 
|-------------------------------- |  | ----------------------------- | ----- |  | ----------------- |  | ----- | ------------------------- | 
|Reserves as of December 31, 2016 |  |                               | 1,033 |  |                   |  | 3,218 |                           | 
|Sensitivity Scenario             |  |                               | 1,182 |  |                   |  | 3,252 |                           | 
|Difference (million barrels)     |  |                               | 149   |  |                   |  | 34    |                           | 
|Difference (%)                   |  |                               | 14.4  |  |                   |  | 1     |                           | 








The conversion
rate used is 5,700 cf = 1 boe.





90









Assumptions for the Sensitivity Analysis of Reserves



| | · | The sensitivity of the ICE Brent price index is forecasted to average US$55 per barrel in 2017,
US$60 per barrel in 2018, US$65 per barrel in 2019, US$70 per barrel in 2020 and US$75 per barrel onwards.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The base scenario on which our sensitivity analysis is made corresponds to our oil, NGL and natural
gas reserves, as of December 31, 2016, as presented elsewhere in this annual report.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Other variables such as the operating costs, capital costs and portfolio price were not varied
for purposes of the analysis.
| | - | ----------------------------------------------------------------------------------------------------------------------------



Sensitivity Analysis of our Results



The following table provides information about
the sensitivity of our results as of December 31, 2016, due to variations of US$1 in the price of ICE Brent crude and of 1%
in the COP$/US$ exchange rate.



Table 53 – Results of Reserves’
Sensitivity Analysis



|                                                 |  | Income Statement 2016 |           |   | Income Statement Case ICE Brent(1) + US$1 |  |           | Difference Between Real 2016 and Case ICE Brent |  |  | Income Statement Case TRM(2) - 1% |   |  | Difference Between Real 2016 and Case TRM |          
|------------------------------------------------ |  | --------------------- | --------- | - | ----------------------------------------- |  | --------- | ----------------------------------------------- |  |  | --------------------------------- | - |  | ----------------------------------------- | ---------
|                                                 |  | (COP$ in billions)    |          
|Revenue                                          |  |                       | 48,485,56 |   |                                           |  | 49,398,37 |                                                 |  |  | 912,81                            |   |  |                                           | 48,931,98
|Cost of sales                                    |  |                       | 34,251,42 |   |                                           |  | 34,606,79 |                                                 |  |  | 355,37                            |   |  |                                           | 34,472,25
|Gross Income                                     |  |                       | 14,234,14 |   |                                           |  | 14,791,58 |                                                 |  |  | 557,44                            |   |  |                                           | 14,459,73
|Operating expenses                               |  |                       | 4,400,84  |   |                                           |  | 4,400,84  |                                                 |  |  | -                                 |   |  |                                           | 4,400,84 
|Impairment of non-current assets                 |  |                       | 928,75    |   |                                           |  | 928,75    |                                                 |  |  | -                                 |   |  |                                           | 928,75   
|Operating income                                 |  |                       | 8,904,55  |   |                                           |  | 9,461,99  |                                                 |  |  | 557,44                            |   |  |                                           | 9,130,14 
|Finance results, net                             |  |                       | (1,175,37 | ) |                                           |  | (1,175,37 | )                                               |  |  | -                                 |   |  |                                           | (1,175,37
|Share of profit of associates and joint ventures |  |                       | 61,35     |   |                                           |  | 61,35     |                                                 |  |  | -                                 |   |  |                                           | 61,35    
|Income before income tax                         |  |                       | 7,790,53  |   |                                           |  | 8,347,97  |                                                 |  |  | 557,44                            |   |  |                                           | 8,016,12 
|Income Tax                                       |  |                       | (4,543,05 | ) |                                           |  | (4,868,12 | )                                               |  |  | (325,07                           | ) |  |                                           | (4,674,60
|Net Income                                       |  |                       | 3,247,48  |   |                                           |  | 3,479,85  |                                                 |  |  | 232,37                            |   |  |                                           | 3,341,52 



| | (1) | ICE Brent = US$45 per barrel
| | --- | ----------------------------

| | (2) | Exchange rate (TRM) = COP$3,051/US$1.00
| | --- | ---------------------------------------



Assumptions for the Sensitivity Analysis of our Results



| | · | Our sensitivity analysis is based on the Consolidated Statement of Profit or Loss for 2016, as
presented elsewhere in this annual report.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | · | The sensitivity of the ICE Brent price index is in reference to an increase of US$1 per barrel
of crude oil in the average ICE Brent reference price based on a 365-day year for 2016. Prices assumed correspond to realized prices
for crude oil, natural gas and refined products for 2016, adjusted to account for the differences between such realized prices
and the ICE Brent reference price.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





91







| | · | The sensitivity of our results to changes in the exchange rate is in reference to a 1% average
depreciation of the Colombian Peso against the U.S. dollar during 2016. Prices assumed correspond to realized prices of crude oil,
natural gas and refined products in 2016 and are expressed for the sensitivity using the adjusted exchange rate (i.e. a 1% average
depreciation of the Colombian Peso against the U.S. dollar during 2016).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The income tax for each of our sensitivity analyses (price of ICE Brent and COP$/US$ exchange rate)
is estimated using the effective corporate tax rate of 58% for 2016.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The table below sets forth the line items that
are being affected by the variation on the reference prices or the average exchange rate.



Table 54



|VARIATION ON ICE BRENT REFERENCE PRICE       | VARIATION ON AVERAGE EXCHANGE RATE          
|-------------------------------------------- | --------------------------------------------
|REVENUE                                     
|Sales of crude oil                           | Sales of crude oil                          
|Sales of refined products                    | Sales of refined products                   
|Sales of natural gas                         | Sales of natural gas                        
|COST OF SALES                               
|Local purchases from business partners       | Local purchases from business partners      
|Local purchases of hydrocarbons from the ANH | Local purchases of hydrocarbons from the ANH
|Local purchases of natural gas               | Local purchases of natural gas              
|Imports of products                          | Imports of products                         



| | 5. | Risk Review
| | -- | -----------



| | 5.1 | Risk Factors
| | --- | ------------



The risks discussed below could have a material
adverse effect, separately or in combination, on our business’s operating results, cash flows, liquidity and financial condition.
Investors should carefully consider these risks.



| | 5.1.1 | Risks Related to Our Business
| | ----- | -----------------------------



This section describes the most significant
potential risks to our business.



Our crude oil and natural gas reserve
estimates involve some degree of uncertainty and may prove to be incorrect over time, which could adversely affect our ability
to generate revenue.



Reserves estimates are prepared using generally
accepted geological and engineering evaluation methods and procedures. Estimates are based on geological, topographical and engineering
facts. Actual reserves and production may vary materially from estimates shown in this annual report, and downward revisions in
our reserve estimates could lead to lower future production which could affect our results of operations and financial condition.



Hydrocarbon reserves presented in this annual
report were calculated in accordance with SEC regulations. As required by those regulations, reserves were valued based on the
unweighted average of closing prices for the first day of each month in the 12-month periods ended December 31, 2016, 2015 and
2014, as well as other conditions in existence at those dates. The average of closing prices of ICE Brent crude oil for the first day
of each month in the 12-month period was US$101.80 per barrel in 2014, US$55.57 per barrel in 2015 and US$44.49 per barrel in 2016.
Mainly as a result of the pronounced fall in hydrocarbon prices between 2014 and 2015, the Company recognized a reduction in oil
and gas proven reserves of 11% in 2015 as compared to 2014, to 1,849 mmboe in 2015 from 2,084 mmboe in 2014. In 2016, the Company
recognized a reduction in oil and gas proven reserves of 14% in 2016 as compared to 2015, to 1,598 mmboe in 2016 from 1,849 mmboe
in 2015 For more information, see the section Business Overview—Exploration and Production—Reserves.





92







Furthermore, at least once a year, or more
frequently if the circumstances require, the Company ascertains whether there are signs of impairment to its assets or cash-generating
units (CGUs) due to the difference between the carrying amount of such assets or CGUs as opposed to their recoverable amounts,
using reasonable assumptions, based on internal and external factors, which reflect market conditions. The recoverable amount is
calculated based on the free cash flow method, discounted at the weighted average capital cost (WACC). Whenever the recoverable
amount of an asset or CGU is lower than its net carrying amount, such amount is reduced to its recovery amount, recognizing a loss
for impairment as an expense in the consolidated statement of profit or loss.



Impairment charges for non-current assets in
2016 amounted to COP$928,747 million before taxes as a result of the evaluation of the recoverable amount of the assets value which
includes the variation in estimations of future prices under the current scenarios of OPEC’s oil quota agreements and the
impact resulting from changes on specifications issued by the International Marine Organization agreement regarding marine pollution,
Marpol, on crude and fuels with high sulfur content. For additional information about this impairment charges,see
Notes 14, 17 and 28 to our consolidated financial statements.



Any significant change in estimates and judgments
could have a material effect on the quantity and present value of our proved reserves and subsequently on the recognition or recovery
of impairment charges. Changes to estimations of reserves are applied prospectively to the amounts of depreciation, depletion and
amortization charged and, consequently, the carrying amounts of exploration and production assets.



In order to assess the possible impact of current
expected oil price scenarios and market conditions, as well as of further developments driven by the economic environment for the
oil and gas industry, the Company has performed a sensitivity analysis over its proved reserve balance as of December 31, 2016.
Based on these calculations, assuming an average price per barrel of ICE Brent crude oil of US$55 per barrel in 2017, US$60 per
barrel in 2018, US$65 per barrel in 2019, US$70 in 2020 and US$75 per barrel for later years, Ecopetrol could recognize an increase
in oil and gas proved reserves of approximately 9.6%. This analysis takes into account Ecopetrol’s estimates and expectations
regarding the main assumptions used in its proven reserve calculation, which final actual result may fluctuate and differ substantially
from those provided herein due to several factors outside of the control of the Company. For additional information see the section
Financial Review—Trend Analysis and Sensitivity Analysis.



Moreover, any downward revision in our estimated
quantities of proved reserves would indicate lower future production volumes, which could result in higher expenses for depreciation,
depletion and amortization for properties to which we apply the units of production method for calculating these expenses. These
higher expenses, and any lower revenues as a result of actual production volumes and realized prices, could adversely impact our
results of operations and financial condition.



Achieving our long-term growth depends
on our ability to execute our strategic plan — specifically, the discovery and successful development of additional reserves.



Our long-term growth objectives depend largely
on our ability to discover and/or acquire new reserves, and in turn developing them successfully and improving the recovery factor
in our mature oil fields. Our exploration activities expose us to the inherent geological and drilling risks including the risk
of not discovering commercially viable crude oil or natural gas reserves; and the risk that some exploratory wells initially budgeted
for may be drilled at a later stage or not be drilled at all. Despite the effort we make to control costs associated with drilling,
these are often uncertain, and numerous factors beyond our control may cause drilling operations to be curtailed, delayed or cancelled.



Our ability to add and develop reserves also
depends on our capacity to structurally reduce costs to maintain the profitability of oil fields already being exploited.



If we are unable to successfully discover and
develop additional reserves, or if we do not acquire properties having proved reserves, our reserves portfolio will decline. Failure
to secure additional reserves may impede us from achieving or maintaining production targets, and may have a negative impact on
our results of operations and financial condition.





93







See the section Strategy and Market Overview—Our
Corporate Strategy for a discussion of our strategic plan.



Our business depends substantially on
international prices for crude oil and refined products. The prices for these products are volatile; a sharp decrease could adversely
affect our business prospects and results of operations.



In 2016, in Ecopetrol, approximately 91.7%
of the revenues came from sales of crude oil, natural gas and refined products and 91% of the total volume sold of these products
is indexed to international reference prices or benchmarks such as ICE Brent. Consequently, fluctuations in those international
indexes have a direct effect on our financial condition and results of operations.



Prices of crude oil, natural gas and refined
products have traditionally fluctuated as a result of a variety of factors including, among others, competition within the international
oil and natural gas industry; long-term changes in the demand for crude oil (as further explained below), natural gas and refined
products; the economic policies in the United States, China and the European Union; regulatory changes; changes in global supply,
such as the current oversupply of crude oil; inventory levels; changes in the cost of capital; adverse economic conditions; global
financial crises; development of substitute sources of energy, development of new technologies; global and regional economic and
political developments in the Organization of the Petroleum Exporting Countries, (OPEC); the willingness and ability of the OPEC
and its members to set production levels; local and global demand and supply for crude oil, refined products and natural gas; trading
activity in oil and natural gas, which thereby affects their respective margins; derivative financial instruments related to oil
and gas; development or availability of alternative fuels; weather conditions; natural events or disasters; and terrorism and global
conflict. In 2016 the impact of an oversupplied market was put to test, as OPEC changed its traditional controlling role and let
the market find its own balance. The price of crude oil may also fluctuate due to changes in demand. For example, Brexit’s
impact on crude oil demand for 2017 is expected to be moderate, the Petroleum Industry Research (PIRA Energy Group) estimates a
short-term impact of US$2 per barrel on crude oil due to a reduction between 100-200 KBD in demand for gasoline, middle distillates
and other products.



When crude oil, refined products and natural
gas prices are low, we earn less revenue and we generate lower cash flow and less income. Conversely, when crude oil, refined product
and natural gas prices are high, we earn more and generate a larger amount of cash and net income. During 2016, our crude oil basket
price was US$35.7 per barrel versus US$43.9 per barrel in 2015; the refined product basket price was US$50.1 per barrel versus
US$63.4 per barrel in 2015; and the natural gas price was US$23.5 per barrel equivalent in 2016 versus US$22.0 per barrel equivalent
in 2015. However, it is important to consider that the margin on refined products can result either in higher or lower margins
due to a change in price of crude the same way gas prices can be impacted by local conditions, such as local demand and weather
conditions.



Impairment charges for non-current assets in
2016 amounted to COP$928,747 million before taxes as a result of the evaluation of the recoverable amount of the assets’
value which includes the variation in estimations of future prices under the current scenarios of OPEC’s oil quota agreements
and the impact resulting from changes on specifications issued by the International Marine Organization agreement regarding marine
pollution, Marpol, on crude and fuels with high sulfur content. For additional information about this impairment charges,see Notes 14, 17 and 28 to our consolidated financial statements.



A reduction of international crude oil prices
could also result in a delay or a change in our capital expenditure plan, in particular delaying exploration and development activities,
thereby delaying the development of reserves and affecting future cash flows. In order to maintain a profitable operation and
preserve the cash flow of the Company at certain oil price levels, some of our producing fields may have to be closed or their
operations temporarily suspended which would affect our production levels and expected revenues.





94







Changes in the Colombian Peso/U.S. dollar
exchange rate could have an adverse effect on our financial condition and results of operations given the amount of U.S. dollar
denominated debt held by the company and the fact that most of our revenues is derived from sales of products quoted in or with
reference to U.S. dollars.



Most of our revenues are derived from sales
of products quoted in or with reference to U.S. dollars. Therefore when the Colombian Peso depreciates against the U.S. dollar,
our revenues converted into Colombian Pesos, increase. Conversely, when the Colombian Peso appreciates against the U.S. dollar,
our revenues decrease.



On the other hand, imported goods, oil services
and the debt, which is mainly denominated in U.S. dollars, become less expensive when the Colombian Peso appreciates against the
U.S. dollar and more expensive when the Colombian Peso depreciates against the U.S. dollar.



As of December 31, 2016 our U.S. dollar-denominated
total debt was US$15.2 billion, 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. Out of this total, US$12 billion relate to Ecopetrol
S.A., whose functional currency is the Colombian Peso. Therefore, when the Colombian Peso depreciates against the U.S. dollar,
Ecopetrol S.A. is exposed to an exchange rate loss. In contrast, when the Colombian Peso appreciates against the U.S. dollar, Ecopetrol
S.A.is exposed to an exchange rate gain. Some of the Group’s affiliates have the U.S. dollar as functional currency and are
not exposed to a material exchange rate risk resulting from fluctuations in the Colombian Peso against the U.S. dollar. On the
asset side, when the financial statements of the Group are consolidated, the exchange rate differential of the affiliates’
assets and liabilities whose functional currency is the U.S. dollar is recognized directly in the equity, as part of the other
comprehensive income.



The Company adopted hedge accounting as part
of its risk management strategy, using two types of natural hedges with its U.S. dollar debt as a financial instrument: i) cash
flow hedge for exports of crude oil and ii) hedge of a net investment in a foreign operation. As a result of the implementation
of both hedges, 88%, or $10.5 billion, of Ecopetrol S.A.’s debt in U.S. dollars was designated as a hedge. With the adoption
of hedge accounting, the effect of the volatility of the foreign exchange rate on the hedged portion of the debt is recognized
directly in equity, as part of other comprehensive income. The remaining portion of Ecopetrol S.A.’s U.S. dollar-denominated
debt as well as the financial assets and liabilities denominated in foreign currency continues to be exposed to the fluctuation
in the exchange rate.



The U.S. dollar/Colombian Peso exchange rate
has fluctuated during the last several years.  On average, the Colombian Peso depreciated 7.05% against the U.S. dollar in
2014, 37.28% in 2015 and 11.18% in 2016. Additionally, as of December 31, 2016, the Colombian Peso appreciated 4.72%, but depreciated
as of December 31, 2015 and 2014, 31.64% and 24.17%, respectively, from year-end exchange in the previous year. In addition, given
the political uncertainty surrounding the United States of America following the recent presidential election and the unpredictability
in the economic performance of some developed countries, there is no clear view of how the U.S. dollar will behave in the medium
to long-term. Given that markets are dealing with a great deal of uncertainty, it is expected that U.S. dollar movements will remain
difficult to forecast, as the U.S. currency will respond immediately to any new opportunities for or challenges to the U.S. economy.



A future depreciation in the exchange
rate of the Colombian Peso against the U.S. dollar may affect our financial results when converted into Colombian Pesos,
given the portion of our U.S. dollar debt that is not designated as hedge instrument and the future debt we may acquire.
Please see our sensitivity analysis on our results of operation to exchange rate fluctuations in the section Financial
Review—Effect of Taxes, Exchange Rate Variation, Inflation and the Price of Oil on our Results—Exchange Rate
Variationand in Note 31.2 to our consolidated financial statements.



Increased competition from local
and foreign oil companies may have a negative impact on our ability to gain access to additional crude oil and natural gas reserves
in Colombia and abroad.



We must bid for exploration blocks offered
by the ANH in Colombia and similar authorities in other countries, which means we compete under the same conditions as other domestic
and foreign oil and gas companies, and receive no special treatment. Our ability to obtain access to potential fields also depends
on our ability for evaluating and selecting potential opportunities and to adequately bid for such opportunities.





95







We are also exposed to international competition
as a result of our international exploratory activities. Currently, we are exploring in Brazil and the US Gulf of Mexico, where
we both partner and compete with other oil and gas companies operating in those locations.



If we are unable to adequately compete with
local and foreign oil companies, or if we cannot enter into joint ventures with market players having high potential exploration
projects, our exploration activities may be limited. This could reduce our market share and, in turn, adversely affect our financial
condition.



If operational risks to which we
are exposed in Colombia or overseas materialize, the health and safety of our workforce, the local community and the environment
may be affected. In addition, we may suffer a disruption or shutdown of our operational activities.



Our exploration, production, refining and transportation
activities in Colombia and in the foreign countries in which we operate are subject to industry-specific operating risks, some
of which, despite our internal procedures and adherence to industry best practices, are beyond our control. Our operations may
be curtailed, delayed or cancelled due to adverse or abnormal weather conditions, natural disasters, blockages in the communities
in which we operate, equipment failures or accidents, oil or natural gas spills or leaks, shortages or delays in the availability
or in the delivery of equipment, delays or cancellation of environmental licenses or other government authorizations or judicial
decisions, fires, explosions, blow-outs, surface cratering, pipeline failures, theft and damage to our transportation infrastructure,
sabotage, terrorist attacks and criminal activities.



Some of our operations in Colombia and abroad
could be conducted in remote and uninhabited locations which involve health and safety risks that could affect our workforce. By
our own Company policy and practices, as well as under Colombian law and international industrial safety regulations, we are required
to have health and safety practices that minimize risks and health issues faced by our workforce. Failure to comply with health
and safety regulations in the jurisdictions where we operate may lead to investigations by health officials that could result in
lawsuits or fines.



We may be required to incur in additional
costs and expenses to allocate funds to industrial safety and health compliance under Colombian law and international
industrial safety regulations. Additionally, if any operational incident occurs that affects local communities and ethnic
communities in nearby areas, we will need to incur in additional costs and expenses in order to return affected areas to
normality and to compensate for any damages we may cause. These additional costs may have a negative impact on the
profitability of the projects we may decide to undertake.



The occurrence of any of these operating risks
could result in substantial losses or slowdowns to our operations, including injury to our employees, malfunction or destruction
of property, equipment and infrastructure, clean-up responsibilities, third-party liability claims, government investigations and
imposition of fines, withdrawal of environmental licenses and other government permits, suspension or shutdown of our activities
and loss of revenue. The occurrence of any of these events may have a material adverse effect on our financial condition and results
of operations.



Our involvement in deep-water drilling
either as direct operator or in conjunction with our business partners involves risks and costs, which may be out of our control.



Our deep-water drilling activities present
severe risks, such as the risk of spills, explosions on platforms and drilling operations, and natural disasters. The occurrence
of any of these events or other incidents could result in personal injuries, loss of life, severe environmental damage with the
resulting containment, clean-up and repair expenses, equipment damage and liability in civil and administrative proceedings. Heightened
risks and costs associated with deep-water drilling may have a negative effect on our results of operations and financial condition
and in our reputation.





96







See the section Business Overview—Exploration
and Production—Exploration Activities—Exploration Activities Outside of Colombia for a summary of our current
deep-water drilling activities.



As a result of the oil spill in the Macondo
field operated by British Petroleum in the U.S. Gulf Coast in April 2010, significant concerns regarding the safety of deep-water
drilling have been raised and, as a result, applicable regulations in various countries have changed. More stringent government
regulation may result in increased costs and longer exploration and development timeframes for our deep-water drilling operations
and consequently could adversely affect our results of operations and financial condition.



We are exposed to the credit, political
and regulatory risks of our customers and any material nonpayment or nonperformance by our key customers could adversely affect
our cash flow and results of operations.



Some of our customers may experience financial
problems that could have a significant negative effect on their creditworthiness. Severe financial problems encountered by our
customers could limit our ability to collect amounts owed to us, or to enforce the performance of obligations owed to us under
contractual arrangements. In addition, many of our customers finance their activities through their cash flows from operations,
short and long term debt or equity.



The combination of decreasing cash flows as
a result of declines in commodity prices, a reduction in borrowing bases under reserve-based credit facilities and the lack of
availability of debt or equity may result in a significant reduction of our customers’ liquidity and limit their ability
to make payments or perform their obligations to us.



Furthermore, some of our customers may be highly
leveraged and subject to their own operating expenses. Therefore, the risk we face in doing business with these customers may increase.
Other customers may also be subject to regulatory changes, which could increase the risk of defaulting on their obligations to
us. Financial problems experienced by our customers could result in the impairment of our assets, a decrease in our operating cash
flows and may also reduce or curtail our customers’ future use of our products and services, which may have an adverse effect
on our revenues and our ability to make payments under our existing debt obligations.



Our ability to access the credit
and capital markets on favorable terms to obtain funding to refinance our debt maturities may be limited due to the deterioration
of these markets, any change to our credit ratings and the authorizations we need before incurring any financial indebtedness.



In recent years, particularly during the last
quarter of 2015 and the first quarter of 2016, due to significant decrease in oil prices, domestic and global financial markets
and economic conditions have been weak and volatile and have contributed significantly to a substantial deterioration in the credit
markets. A new financial crisis, remaining volatility in prices in the oil and gas sector, the spread in protectionist policies
in the United Statess and Europe, the lack of consensus among OPEC members and further geopolitical disruptions in the Middle East
which could involve developed countries, which in turn could worsen risk perception with respect to the emerging markets, or the
occurrence of any of the risks described in the section Risk Review—Risk Factors—Risks Related to Colombia’s
Political and Regional Environment could also make it more difficult for us and our subsidiaries to access international
and local capital markets and finance our operations and potentially refinance our debt maturities on terms acceptable to us. These
conditions, along with significant write-offs in the financial services sector and the re-pricing of credit risk, can make it difficult
for us to obtain funding for our capital needs on favorable terms. Access to credit and capital markets is also dependent on our
credit ratings, which are mainly determined by our financial and operational strength, oil and gas market conditions and the support
that could be provided by the Colombian government. On January 18, 2016, our senior unsecured debt ratings were downgraded to Baa3
from Baa2 by Moody’s Investors Service, and Standard & Poor’s (S&P) and Fitch Ratings revised our outlook from
stable to negative on January 29 and July 26, 2016, respectively.  We cannot assure that our credit ratings will continue
for any given period of time or that the ratings will not be further lowered or withdrawn.  An assigned rating may be raised
or lowered depending, among other things, on the respective rating agency’s assessment of our financial strength. In addition,
a downgrade in the rating of the Republic of Colombia could also trigger a downgrade on our ratings as our rating is capped by
the rating of the Republic of Colombia and the implicit support that can potentially be provided to the Company. On February 16,
2016, S&P revised the outlook of the Republic of Colombia to negative. While on March 14, 2017, Fitch Ratings upgraded our
outlook from negative to stable following the upgrade from the Republic of Colombia from negative to stable also in March 2017,
we cannot offer any assurance that our credit rating will continue.





97







As a result of these factors, we may be forced
to revise the timing and scope of our capital projects as necessary to adapt to existing market and economic conditions, downgrades
to our credit ratings or to access the financial markets on terms less favorable, therefore negatively affecting our results of
operations and financial condition.



In addition, under applicable regulation, the
Government, through the Ministry of Finance and Public Credit and the favorable opinion of the National Planning Department, must
authorize all indebtedness of state-owned entities and government-controlled companies through a majority equity stake. Consequently,
excluding our foreign subsidiaries or those subsidiaries in which we hold minority interest, most of our indebtedness must be previously
authorized by the Colombian Ministry of Finance and Public Credit and the National Planning Department. As such, our indebtedness
is subject to the Government’s time frames and policies, and we cannot guarantee that such authorizations would be granted
in a timely fashion or granted at all.



We may be exposed to increases
in interest rates, thereby increasing our financial costs.



We may incur debt locally and in the international
capital markets and, consequently, may be affected by changes in prevailing interest rates. If market interest rates increase,
our financing expenses may increase, which could have an adverse effect on our results of operations and financial condition. Interest
rates in the United States may continue rising due to Federal Reserve’s monetary policy, which is looking for economic activity
expansion at a moderate pace, labor market conditions strengthening and inflation stability to 2% over the medium term.



As of December 31, 2016, approximately 31%,
or US$5.4 billion (COP$16.2 trillion), of our total indebtedness consisted of floating rate debt. If market interest rates rise,
our financing expenses will increase, which could have an adverse effect on our results of operations and financial condition.
In addition, as we refinance our existing debt in the coming years, the mix of our indebtedness may change, specifically as it
relates to the ratio of fixed to floating interest rates, the ratio of short-term to long-term debt, and the currencies in which
our debt is denominated in or indexed to. We cannot assure you that such changes will not result in increased financing expenses
borne by us. Finally, as we incur new debt in the future to fund our capital projects, the prevailing interest rates and spreads
at any specific time could be less favorable in terms of cost when compared to our previous financing transactions, which could
adversely affect our financial condition and results of operations.



Our current and planned investments
and exploration activities outside Colombia are exposed to political and economic risks.



As part of our strategic plan, we operate through
business partners, subsidiaries or affiliates outside of Colombia. We currently have investments, joint ventures and subsidiaries
incorporated in Peru, Brazil, Bermuda, Panama, the Cayman Islands, Switzerland, Germany, Spain, the United Kingdom and the United
States, and we are analyzing investments in other countries. In connection with making investments, we are and will be subject
to risks related to economic and political conditions and governmental economic actions. We cannot predict the positions of foreign
governments relating to the oil and gas industry, land tenure, protection of private property, environmental standards, regulation
or taxation; nor can we assure you that future governments will maintain policies favorable to foreign investment or repatriation
of capital.



We began exploration activities outside Colombia
in 2006 through our Brazilian subsidiary, Ecopetrol Óleo e Gás do Brasil Ltda. Our foreign subsidiaries have subsequently
entered into a number of joint venture exploration agreements with regional and international oil companies to explore acreage
in Brazil and the U.S. Gulf Coast. We have limited experience exploring outside Colombia. We may face new and unexpected risks
involving environmental and other legal requirements beyond those we currently experience.





98







The results of operations and financial condition
of our subsidiaries in these countries also may be adversely affected not only by risks associated with hydrocarbon exploration
and production, but also by fluctuations in their local economies, political instability and government actions, including: the
imposition of price controls, the imposition of restrictions on hydrocarbon exports, fluctuation of local currencies against the
Colombian Peso, the nationalization of oil and gas reserves, increases in export and income tax rates for crude oil and oil products,
and unilateral (governmental) institutional and contractual changes, including controls on investments and limitations on new projects.



Any of these conditions occurring could disrupt
or terminate our operations, causing our development activities to be curtailed or terminated in these areas, or our production
to decline; limit our ability to pursue new opportunities; affect the recoverability of our assets; or cause us to incur additional
costs or delay the timeline of our projects.



Our future performance depends
on the successful development and deployment of new technologies and the knowledge to apply and improve them.



Technology, knowledge and innovation are essential
to our business, especially for improvements in the production and transportation of heavy crude oil, the exploitation of mature
fields, and reductions in our operating cost. If we do not develop the right technology or do not obtain the expertise to operate
new technology or to improve our processes, do not have access to, or do not deploy the knowledge necessary to apply and improve
such technology effectively, the execution of our corporate goals, our profitability and our earnings may be adversely affected.
In the case of our recovery program, we not only depend on the successful development and deployment of new technologies but also
in the response of the reservoir to the application of this recovery technology.



Our performance could be negatively
affected by a deficiency in leadership capacity and lack of key skilled employees.



As the oil and gas industry faces an increasing
number of challenges, the ability to react quickly to these challenges has become a key factor in achieving efficiency, profitability
and sustainability. Our ability to achieve these goals can be negatively affected by a deficiency in leadership capacity and a
lack of key skilled employees that can execute our business strategy with creativity and determination.



Our operations may not be able
to keep pace with the increasing domestic demand for natural gas.



According to the Colombian Energy and Gas Regulatory
Commission (CREG) Resolution 089 of 2013, a supplier of natural gas must possess sufficient economically viable natural gas reserves
before executing a natural gas delivery contract with a customer. In the long term, we may not be able to keep up with increasing
local demand for natural gas if demand outpaces the rate of growth of our natural gas supply, especially because of the decline
of our main fields. As a result, we may lose market share, which may negatively impact our financial condition and results of operations.



Additionally, we are currently party to a number
of national gas supply contracts that have firm gas commitments. If we are unable to deliver natural gas to these clients as a
result of cuts in operations, delays in the completion of projects relating to our production facilities or the acceleration of
the decline in our gas production, among other reasons, we may be required to compensate our customers for our failure to supply
natural gas. In 2016, we paid a penalty due to a cut in operations that occurred on October 12, 2016. This cut was caused by an
operational failure in the ignition system of the Guajira B compression train, which caused an unavailability of gas supply, which
in turn affected gas demand in a portion of the industrial and thermal sectors.



Delays in the start of new projects could result
in penalties imposed on us by our clients. Although we did not pay penalties due to delays in the start of new projects in 2016,
we cannot assure you that in the future we will not be subject to additional monetary fines which can in turn affect our financial
condition and results of operations.





99







We depend on others for the construction and
availability of natural gas transportation infrastructure for the transport of our gas, which may limit our ability to develop
new or existing fields or lead to the deterioration of related assets and may not allow us to recover the cost of capital invested
in natural gas discoveries.



We are prohibited by law from holding more
than 25% of the equity of any natural gas transportation company. Therefore, there can be no assurance that the transportation
infrastructure necessary to transport natural gas from the fields to distribution points and our customers will be built by third
parties or that if built there will be sufficient capacity available to us for the exploitation of new natural gas discoveries
or the development of existing fields. The failure to commercially exploit new or existing discoveries may result in impairment
of the related assets and our inability to recover the capital expenditures invested to make these natural gas discoveries. As
a result, we may be required to enter into agreements with natural gas transportation companies on terms that are not favorable
to us.



For example, we have developed natural gas
reserves in the Cusiana and Cupiagua fields, but transportation capacity to deliver gas from these fields is currently limited.
Although there are projects under development that will eliminate this limitation in 2018, we can offer no assurance that they
prove successful.



Our operations have and may continue
to be affected by reactions of labor unions, social organizations and contractors to organizational changes and other management
decisions.



Due to the volatility of the markets and the
existing low oil price environment, we have and will continue to undertake measures to enhance operating cost efficiency. Such
measures involve changes in cost structure, downsizing our staff (including direct and indirect employees), and budget cuts, among
others. Unions, contractors and social organizations in the communities where we have operations have in the past and may continue
to oppose such measures causing work stoppages or decreasing productivity, which could have an adverse effect on our operations
and financial condition.



In addition, our current collective bargaining
agreement has been in effect since 2014 and has a term of five years, expiring June 30, 2018. There will be no changes to these
terms until 2018; therefore, we do not expect any adverse reactions from our labor unions relating to this matter. However, we
cannot assure you we will not experience strikes or labor unrest in the future.



Our activities may be interrupted
or affected by external factors, such as abnormal weather conditions and natural disasters.



We are exposed to several risks that may partially
interrupt our activities. They include fires or explosions, natural disasters, criminal acts and acts of terror, malfunction of
pipelines and emission of toxic substances.



Also, the effects of climate change could create
impacts and losses in any part of our business operations, for instance, as the result of increase in the intensity of the “La
Niña” and “El Niño” climate phenomena, causing floods and drought periods, increased temperature
and rising sea levels.



The “El Niño” climate phenomenon
is characterized by (i) a lack of rainfall, which limits the amount of water necessary for the development of various activities
of the company, and (ii) increased temperatures, which could have a direct impact on our workers’ health given an increased
occurrence of heat waves and the increased occurrence of epidemics and diseases. The “La Niña” climate phenomenon
is characterized by increased rainfall, which can generate (i) landslides that threaten pipeline infrastructure and limit road
transportation and (ii) flooding, which could limit operations in our production fields and facilities.



As a result, our activities could be significantly
affected or even paralyzed. These risks could result in property damage, loss of revenue, loss of life, pollution and harm to the
environment, among others. If any of these occur, we may be exposed to economic sanctions, damages, fines or penalties in addition
to the costs required to repair or remediate the related damage. These costs, fines and penalties may adversely affect our financial
condition and results of operations.





100







Our operations, including our activities
in areas classified as indigenous reserves and Afro-Colombian lands, are subject to opposition from members of various communities.



We currently carry out and plan to carry out
activities in areas classified by the Government as indigenous reserves (resguardos) and Afro-Colombian lands (territorios
colectivos). In order to undertake these activities, we must first comply with the previous consultation process, set forth
by Colombian law. These consultation processes are part of the administrative procedures for obtaining environmental licenses to
start our projects, works or activities in areas belonging to ethnic communities. In addition, consultations can be seen as a potential
instrument to involve communities in the decision of developing extracting industry and infrastructure projects in their territories.
Generally, these consultation processes last between six months to one year depending on the community expectations, but may
be significantly delayed if we cannot reach an agreement with the communities. We strive to be respectful of the Constitution and
laws and the autonomy of indigenous and Afro-descendant communities, and we therefore do not enter their territories until we have
reached an agreement with them.



Our activities are subject to opposition, including
protests by various communities, and even in areas in which the previous consultation process does not apply. Recently, through
popular consultation, some communities have voted against the development of extractive industry projects. Any such similar situation
may affect our future projects.



In recent years, indigenous communities have
been claiming their ancestral territories and requesting recognition on previously closed consultation processes. We may be exposed
to operational restrictions as a result of the opposition of these communities.



No certainty can be given that we will be able
to reach an agreement with the different communities opposed to our operations or that such communities will participate in consultation
processes if available. We may be exposed to similar delays due to opposition from local communities in other countries where we
carry out our activities.



We have made significant investments
in acquisitions and we may not realize the expected value.



We have acquired interests in several companies
in Colombia and abroad. See the section Business Overview—Our Corporate Structure. Obtaining the expected benefits
of the acquisitions will depend, in part, on our ability to (i) obtain the expected results of operations and financial condition
from these acquisitions, (ii) manage disparate operations and integrate distinct corporate cultures, (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 (v)
the economic and regulatory environment in countries in which we have made acquisitions and (vi) crude oil prices. These efforts
may not succeed. Our failure to successfully obtain the expected results from our acquisitions could adversely affect our financial
condition and results of operations.



We might be required to provide
additional financial support to Bioenergy and Reficar in spite of the recent completion of their projects



Reficar raised US$3.5 billion through a limited-recourse
project financing in which Ecopetrol S.A. provided both construction support and debt service guarantee and was also the sponsor
of the financing. If Reficar experiences any situation that might affect the fulfillment of its financial obligations, Ecopetrol
S.A. must provide financial support to Reficar, through capitalizations, subordinated loans or even the assumption of the debt.
These situations might be related, but are not limited to, labor productivity, failure of the upgraded refinery to reach the expected
performance level in terms of the quality of products and/or volumes produced. See the section Business Overview—Refining
and Petrochemicals—Refining—Reficar.



Also, Bioenergy’s ethanol plant, that
was financed with COP$123 billion through bilateral loans for its agricultural component and COP$382 billion through an infrastructure
leasing for its industrial component, may also meet situations such as social unrest, strikes or other operational difficulties
that could negatively impact its operation and financial results. Although Ecopetrol is not the sponsor and has not provided financing
guarantees to Bioenergy, some additional financial support might be needed to assure the stabilization of the project.





101







Any situation that could affect the operations
of these subsidiaries may have a negative impact on their profitability as well as their ability to pay their debt, which in turn
could adversely affect our financial condition and results of operations.



Ongoing Colombian Statecontrol entities investigations regarding our subsidiaries Reficar and Bioenergy could adversely affect us.



Ecopetrol is a corporation majority owned
by the Colombian Government that administers public resources and Reficar and Bioenergy are subsidiaries of Ecopetrol.
Ecopetrol’s employees have a statutory responsibility to ensure the proper use of public resources. Reficar and Bioenergy’s
employees also have a duty for proper management of public resources. The conduct of Ecopetrol, Bioenergy and Reficar’s
employees are generally subject to the control and supervision of the Colombian State control entities. See the section Risk
Review—Legal Proceedings and Related Matters for additional information.





The investigations concerning Reficar
and Bioenergy that are described in the section Risk Review—Legal Proceedings and Related Mattersremain ongoing.
Because these actions are in their early stages, it is still not possible to estimate the duration, scope or results of these
investigations or related inquiries and requests for information by Colombian State control entities. While we are cooperating
fully with both cases, adverse developments in connection with these investigations, including any expansion of the scope of the
investigations, could negatively impact us and could divert the efforts and attention of our management team from our ordinary
business operations.





As described in the section Risk
Review—Legal Proceedings and Related Matters, the Prosecutor’s Office is conducting a
confidential investigation regarding Reficar’s expansion and modernization project. On April 27, 2017, the
Prosecutor’s Office announced its intention to pursue charges against eight individuals, including five past officers
of Reficar or Ecopetrol, for the alleged crimes of document forgery, illegal interest in the execution of agreements,
misappropriation of public funds and unjust enrichment. The Prosecutor’s Office has not yet made public the factual
basis for such charges, and accordingly we are not in a position to predict the outcome of the Prosecutor’s
Office’s investigation or the disposition of any charges that the Prosecutor’s Office may bring.





In connection with this investigation or any other investigation carried out by any other authority,
there can be no assurance that we will not be required to pay penalties, or incur in additional costs and expenses, and expose
us or our employees to sanctions and lawsuits, any of which could adversely impact our reputation and, in turn, could have adverse
effects on our financial condition and results of operations. See Risk Review- Legal and Regulatory Risk - We may incur
losses and spend time and money defending pending lawsuits and arbitrations and responding to administrative investigations.





Our results may be affected by
the performance of our business partners or their third-party service providers, as many of our operations are executed under joint
venture agreements.



Many of our operations are performed through
joint ventures with our business partners. Consequently, we depend on the performance of our business partners. The poor performance
of any of them, especially in those projects in which we do not act as operator, could negatively impact oil and natural gas production,
which in turn could have a negative impact on our results of operations and financial condition. We are exposed to the risk of
not finding business partners with the appropriate skills and performance we require for our projects. We are also indirectly exposed
to supply agreements and other third-party services contracted by our business partners acting as operators under joint venture
agreements.



Our insurance policies do not cover
all liabilities and may not be available for all risks.



Our insurance policies do not cover all liabilities,
and insurance may not be available for all risks. There can be no assurance that incidents will not occur in the future, that insurance
will adequately cover the entire scope or extent of our losses or that we will not be found liable in connection with claims arising
from these and other events, which could adversely affect our financial condition and results of operations.



A failure in our information technology
systems or cyber security attacks may adversely affect our financial results.



We depend on the reliability and security of
our information technology systems to conduct certain exploration, development and production activities, process financial records
and operating data, communication with our employees and business partners, and for many other activities related to our business.
Our information technology systems may fail or have other significant shortcomings due to operational system flaws or employee
misuse, tampering or manipulation. In addition, we may become the target of cyber-attacks or information security breaches that
could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information.
Any of these occurrences could disrupt our business, result in potential liability or reputational damage or otherwise have an
adverse effect on our financial results.





102







During 2016, our internal cyber security systems
identified several cyber security attacks such as brute force login attacks designed to identify valid credential in IT infrastructure
and seventeen ransomware attacks-only one of them with data loss (low level confidentiality) at Ecopetrol S.A.-Our
platforms also identified and controlled certain malware events and SQL injection attacks.



Although we have not experienced any material
losses relating to failure of our information technology systems or cyber incidents, there can be no assurance that we will not
suffer such losses in the future.



We are exposed to behaviors incompatible
with our ethics and compliance standards.



Given the large number of contracts that we
are a party to in Colombia and abroad with local and foreign suppliers, the geographic distribution of our operations and the great
variety of actors that we interact within the course of business, we are subject to the risk that our employees, contractors, or
any person having relations with us may misappropriate our assets, manipulate our assets or information or engage in money laundering
or the financing of terrorism, for such person’s personal or business advantage. Our systems for identifying and monitoring
these risks may not be effective to fully mitigate them in all situations. Such acts may result in material financial losses or
reputational harm to the Company.



The reliability and capacity of
national power supply systems may affect or limit the continuity of our operations or limit growth.



Our average energy consumption in 2016 was
6,948 GWh/year, of which 65% was supplied through self-generation, and the remaining 35% through power grid. Our demand is 10.5%
of the total energy demand in Colombia.



Several producing fields are connected to the
national transmission system and depend on its expansion and reliability to keep steady production levels and to accommodate future
growth. The national electricity market is volatile due to changes in hydrology and availability of fuels (natural gas, diesel
etc.); and the grid expansion projects which are executed by power distribution contractors have experienced delays due to licenses
and limited execution capability. To mitigate these risk the Ecopetrol Group decided to centralize the management of power sources
and uses in order to optimize the energy availability, quality and cost, for the short, medium and long term. While the intention
is to enhance system reliability by timely execution of electrical projects and to launch energy efficiency programs in all of
our segments, we cannot offer any assurance that we will prove successful.



Rising water production
levels may affect or constrain our crude oil production.



During 2016, we produced approximately 9.36
million barrels of water per day. Taking into account the nature of our reservoirs, the water production levels to be managed by
the Company may increase in the future. In order to achieve our oil and gas production goals and to avoid any production restrictions
going forward, we will need to secure the required capacity to manage water levels. Factors that may trigger a possible constraint
in our crude oil production due to the rising water production levels are: (i) ineffective project management of the required facilities,
(ii) the Company’s and its partners’ ability to timely obtain the environmental permits related to water management,
(iii) social and community interactions that could affect the development and operation of these projects, and (iv) the availability
of capital to execute the required projects.



| | 5.1.2 | Risks Related to Colombia’s Political and Regional Environment
| | ----- | --------------------------------------------------------------



This section discusses potential risks related
to our extensive operations in Colombia.





103







The Colombian government could
seize or expropriate Ecopetrol’s assets under certain circumstances.



Pursuant to Articles 58 and 59 of the Colombian
constitution, the Government can exercise its eminent domain powers in respect of Ecopetrol’s assets in the event such action
is deemed by the Government to be required in order to protect public interests. According to Law 388 of 1997, eminent domain powers
may be exercised through: (i) an ordinary expropriation proceeding (expropiación ordinaria o judicial), or (ii) an
administrative expropriation (expropiación administrativa). In all cases we would be entitled to a fair compensation
for the expropriated assets. Also, as a general rule, compensation must be paid before the asset is effectively expropriated. However,
the compensation may be lower than the price for which the expropriated asset could be sold in a free-market sale or the value
of the asset as part of an ongoing business. The aforementioned Article 59 of the Colombian constitution establishes an expropriation
for war reasons (expropiación en caso de guerra), which does not that compensation be paid before expropriation but
can only be executed on a temporary basis.



Colombia has experienced internal
security issues that have had or could have a negative effect on the Colombian economy and on us.



Colombia has experienced internal security
issues, primarily due to the activities of guerrillas, paramilitary groups, drug cartels and criminal bands known as Bacrim.
From time to time, guerrillas target crude oil and multi-purpose pipelines, including the Oleoducto Transandino, Caño Limón-Coveñas
and Oleoducto Bicentenario pipelines, and other related infrastructure disrupting our activities and those of our business partners.
During 2016, the attacks against our pipeline infrastructure decreased by 35% in relation to 2015 (80 attacks in 2015 compared
with 52 attacks in 2016), however they were strategically targeted and more severe. This situation especially affected the infrastructure
located in Nariño, Arauca and Norte de Santander and the following pipelines: Caño Limón Coveñas and
Transandino. During the first quarter of 2017, 29 attacks against the infrastructure of the Caño Limon – Coveñas
system have taken place, impacting our operations in this pipeline and resulting in deferred crude oil production of 603 thousand
barrels. On several occasions, guerilla attacks have resulted in unscheduled shutdowns of transportation systems in order to repair
or replace sections of pipelines or production facilities that have been damaged and deferral of production in certain fields,
as well as caused us to undertake environmental remediation. For the pipeline infrastructure managed by Ecopetrol S.A., the direct
cost of repair pipeline infrastructure due to terrorist attacks in 2016 was approximately COP$41.7 billion (US$13.9 million, with
a 3,000.71 Colombian Peso/U.S. dollar exchange rate as of December 31, 2016). Also, our production was impacted by approximately
3,215 bpd due to events related to attacks on our infrastructure that limited our production. Guerrilla groups and other illegal
armed groups also attacked natural gas transportation infrastructure that have affected our natural gas production in the past.
These activities, their possible escalation and the effects associated with them have had, and may have in the future, a negative
impact on the Colombian economy or on us, which may affect our customers, employees, assets or the environment, with resulting
containment, clean-up and repair expenses.



Likewise, theft of refined products and crude
oil, resulting from security issues, may impact our results in the future. Theft of refined products, which reached a peak of approximately
7,270 bpd in 2002, was reduced to approximately 28.5 bpd in 2016. The theft of crude oil increased from approximately 646 bpd in
2015 to approximately 1,830 bpd in 2016.



Despite the peace agreement between the
Colombian government and the FARC and the ongoing peace negotiation process with the National Liberation Army (the ELN), some illegal
and terrorist activities of guerrilla groups or their members may continue



On November 30, 2016, the Colombian Congress
approved a peace agreement between the Colombian government and the Revolutionary Armed Forces of Colombia, or FARC. Currently,
the Colombian government is in the process of gradually integrating FARC members into civilian life.



On the other hand, the National Liberation
Army, or ELN, an insurgency guerrilla group, has increased its actions against the Colombian security forces and the critical infrastructure
of the Nation in recent months, which we believe is an attempt to show its presence and influence in some regions and put pressure
on the ongoing peace negotiations which formally began in February 2016.





104







Despite the progress made with the FARC and
the ongoing negotiations with the ELN, some guerrilla groups may continue their illegal and terrorist activities, resulting in
a deterioration of Colombia’s national security and, consequently, negatively impacting our operating results.



There have been certain events
in Colombia and abroad, which have resulted in political tensions between Colombia and some of its neighboring countries.



Diplomatic relations between Colombia and some
of its neighboring countries, in particular Venezuela, have been tense in the past. Although relations with Venezuela have stabilized
and improved with Colombia’s current administration, economic differences between Colombia and Venezuela, mainly due to Venezuela’s
current public disorder and internal political tension, could affect our diplomatic relations, impact border cities and therefore
have a negative impact on Colombia’s economy and general security situation.



Companies operating in Colombia,
including us, are subject to the prevailing economic conditions and the investment climate in Colombia, which may be less stable
than the prevailing economic conditions and investment climate in developed countries.



Market prices of securities issued by Colombian
companies, including us, are subject to the prevailing economic conditions in Colombia. A large portion of our assets and operations
are located in Colombia and most of our sales are currently derived from our crude oil and natural gas production and the production
of our refineries located in Colombia. Accordingly, our financial condition and results of operations depend to a significant extent
on macroeconomic and political conditions prevailing from time to time in Colombia and on the exchange rates between the Colombian
Peso and the U.S. dollar.



If the perception of improved overall security
in Colombia deteriorates or if the investment climate worsens, the Colombian economy may face lower growth rates than the ones
posted recently, which could negatively affect our financial condition and results of operations. Furthermore, the market price
of our shares and American Depositary Shares, or ADSs, may be adversely affected by changes in governmental policies, particularly
those affecting economic growth, exchange rates, interest rates, inflation and taxes. The Government has changed monetary, fiscal,
taxation, labor and other policies over time and has thus influenced the performance of the Colombian economy. We have no control
over the extent and timing of government intervention and policies.



Colombian political and economic
conditions have a direct impact on our business and may have a material adverse effect on us.



Colombia’s economic policies may have
direct impact on our company as well as market conditions, the prices of securities and our ability to access national and international
capital markets. Our financial condition and results of operations may be adversely affected by the following factors, among others,
and the Government’s response to such factors: exchange rate movements; inflation; exchange control policies; price instability;
interest rates; liquidity of domestic capital and lending markets; tax policy; regulatory policy for the oil and gas industry,
including pricing policy; and other political, diplomatic, social and economic developments in or affecting Colombia.



Uncertainty over whether the Government will
implement changes in policy or regulations that may affect any of the factors mentioned above or other factors in the future may
lead to economic uncertainty in Colombia and increase the volatility of the Colombian securities market and securities issued abroad
by Colombian companies.



Developments and the perception of risk in
other countries, especially emerging market countries, may adversely affect the market price of Colombian securities, including
our ADSs.



Securities issued by Colombian companies may
be affected by economic and market conditions in other countries, including other Latin American and emerging market countries.
Although economic conditions in Latin American countries and in other emerging market countries may differ significantly from economic
conditions in Colombia, investors’ reactions to developments in these other countries may have an adverse effect on the market
value of securities of Colombian issuers and our ability to access capital markets.





105







Due to past financial crises in several emerging
market countries (such as the Asian financial crisis of 1997, the Russian financial crisis of 1998 and the Argentine financial
crisis of 2001), the world financial crisis of 2008 and the recent sovereign debt crises in certain European countries, investors
may view investments in emerging markets with heightened caution. In the past, as a result of crises in other countries, flows
of investments into Colombia have been reduced. Crises in other countries, especially in emerging market countries, may hamper
investor enthusiasm for securities of Colombian issuers. If Latin America experiences a new slow-down or if the price for securities
of Latin American issuers falls, the price for our ADSs could follow this trend and could be adversely affected as could our ability
to access domestic or international capital markets.



The Ministry of Mines and Energy
has not calculated or liquidated the corresponding Net Positions for Ecopetrol as refiner and/or importer and for each fuel (gasoline
and motor fuel oil) to be recognized by the FEPC to Ecopetrol for the second half of 2016



Under current Colombian regulations, the Ministry
of Mines and Energy is required to periodically (initially by quarters, now twice a year) calculate and liquidate each refiner
and/or importer of fuel’s Participation Differential (i.e. this arise when the international parity price is lower than the
reference price established by the Ministry of Mines and Energy), leading to a “Net Position”. However due to changes
in law and the Ministry methodologies we have still not received the calculations or liquidations for the second semester of 2016.



We do not know and we cannot anticipate the
terms and conditions that will be established by the Ministry of Mines and Energy for future liquidations. For more information
regarding the FEPC, see the section Business Overview—Applicable Laws and Regulations—Regulation of Refining
and Petrochemical Activities—Regulation Concerning Production and Prices.



New or higher taxes resulting from
changes in tax regulations or the interpretation thereof in Colombia could adversely affect our results of operations and financial
condition.



New tax laws and regulations, and uncertainties
in the interpretation with respect to existing and future tax policies pose risks to us. In recent years, the Colombian Congress
and tax authorities have imposed additional taxes such as the Impuesto sobre la Renta para la Equidad (“CREE surtax”),
and enacted modifications to taxes related to financial transactions, income, value added tax (“VAT”), and taxes on
net worth. In addition, in December 2016, pursuant to Law 1819, the Colombian Congress enacted a new tax reform, which became effective
in 2017. For a description of taxes affecting our results of operations and financial condition in 2016, see the section Financial
Review—Effect of Taxes, Exchange Rate Variation, Inflation and the Price of Oil on Our Results—Taxes.
Changes 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
and tax courts may interpret tax regulations differently than we do, which could result in tax litigation and associated costs
and penalties.



Until recently, for Colombian income tax purposes,
dividends that were distributed from profits taxed at the corporate level were not taxed or subject to withholding tax at the shareholder
level. However, beginning in 2017, dividends paid to non-resident shareholders are subject to a withholding tax. The withholding
tax rates applicable to dividends paid to non-resident shareholders are: (i) a 5% dividend tax on dividends distributed from profits
taxed at the corporate level; (ii) a 35% withholding tax rate on dividends distributed from profits not taxed at the corporate
level; and (iii) an additional 5% dividend tax rate after applying the initial 35% withholding tax rate. Tax treaty rules might
also apply on dividend distributions when a shareholder is a resident in a country that has executed a tax treaty with Colombia.



| | 5.1.3 | Legal and Regulatory Risks
| | ----- | --------------------------



This section discusses potential legal and
regulatory risks to Ecopetrol, including the risk of having to comply with new laws and regulations.





106







Our operations are subject to extensive
regulation.



The Colombian hydrocarbons industry is subject
to extensive regulation and supervision by the Government and regulatory agencies in matters including the award of exploration
and production blocks by the ANH, the imposition of specific drilling and exploration obligations, restrictions on production,
price controls, capital expenditures and required divestments. Existing regulation applies to virtually all aspects of our operations
in Colombia and abroad. The commercialization activities of some of our products also face extensive regulation. Such regulation
is subject to change by the applicable regulator affecting our ability to commercialize our products. See the section Business
Overview—Applicable Laws and Regulations.



The terms and conditions of the agreements
with the ANH under which we explore and produce crude oil and natural gas generally reflect negotiations with the ANH and other
governmental authorities and may vary by fields, basins and hydrocarbons discovered.



We are required, as are all oil companies undertaking
exploratory and production activities in Colombia, to pay a percentage of our production to the Government as royalties. The Colombian
Congress has modified the royalty program for crude oil and natural gas production several times in the last 20 years, as it has
modified the regime regulating new contracts entered into with the Government. In the future, the Colombian Congress may once again
amend royalty payment levels for new contracts and such changes could have an adverse effect on our future exploration and production
in Colombia. See the section Business Overview—Applicable Laws and Regulations—Regulation of Exploration and
Production Activities—Business Regulation—Royaltiesfor a description of the current royalty scheme.



Our operations in Colombia are subject to extensive
national, state and local environmental regulations. Environmental rules and regulations are applicable to our exploration, production,
refining, transportation, supply and marketing activities, as well as the biofuels we produce. These regulations establish, among
other things, quality standards for hydrocarbon products, air emissions and greenhouse gases, water discharges and waste disposal,
soil remediation, water pollution and the general storage, handling, transportation and treatment of hydrocarbons in Colombia.
Currently, all exploratory projects drilling in areas that do not yet have a license must undergo an environmental impact assessment
and must receive an environmental license from the governmental agency responsible for awarding environmental licenses, the Environmental
License National Agency or ANLA. Environmental authorities with jurisdiction over our activities routinely inspect our crude oil
fields, refineries and other production sites, and they may decide to open investigations or sanction proceedings, which may result
in the imposition of fines, restrictions on operations or other sanctions in connection with potential non-compliance with environmental
laws.



We are also subject to control and monitoring
by the regional autonomous corporations (CAR), which are regional environmental authorities that grant permits for the use and
exploitation of natural resources, establish compensation measures for the use of these resources, and perform monitoring, control
and sanctions function.



If we fail to comply with any of these national
or regional environmental regulations or authorities, we could be subject to administrative and criminal penalties, including warnings,
fines or closure orders of our facilities. Any such criminal penalty would be imposed on the legal representatives of the Company,
including any legal representative, director or worker who participated or failed to take action related to the activities that
lead to environmental damage. See the section Business Overview—Applicable Laws and Regulations—Regulation of
Exploration and Production Activities—Business Regulation—Environmental Licensing and Prior Consultation.



Environmental regulation has become more stringent
in Colombia in recent years. As a result, our operating costs have increased in order to comply with these new technical environmental
requirements as well as the need to strengthen our specialized team in charge of environmental compliance in project and operations.
If environmental laws continue to impose additional costs on us, we may need to reduce our investments on strategic projects in
order to allocate funds to environmental compliance. We are also exposed to delays in obtaining environmental licenses from ANLA,
which can lead to cost overruns or to changes in our investment plans. These additional costs may have a negative impact on the
profitability of the projects we intend to undertake or may make them economically unattractive, in turn having a negative impact
on our results of operations and financial condition.





107







We are subject to foreign environmental regulations
for the exploratory activities conducted by us outside Colombia. Failure to comply with foreign environmental regulations may result
in investigations by foreign regulators, which could lead to fines, warnings or temporary suspensions of our operations, which
could have a negative impact on our financial condition and results of operations.



Under certain of our credit agreements, we
are under an obligation to comply with international environmental standards established by our lenders or by multilateral institutions.
Failure to comply with such environmental standards could result in an event of default under the relevant credit agreements that
we, or our subsidiaries, have entered into, which would affect our financial condition. For instance, the credit facility executed
by Reficar for the financing of its expansion and modernization project includes an obligation to comply with the U.S.-Exim Environmental
Procedures and Guidelines and the Organization for Economic Co-operation and Development (OECD) Common Approaches on Environment
and Officially Supported Export Credits, and a credit agreement executed by Ecopetrol S.A. to finance purchases of U.S. goods and
services requires Ecopetrol S.A. to comply with the U.S.-Exim Environmental Procedures and Guidelines.



In addition, we may be subject to foreign health
and safety and environmental regulations for our upstream activities conducted outside Colombia. Foreign health and safety regulations
may be more severe than those established under Colombian law and, therefore, we may be required to make additional investments
to comply with those regulations.



We may incur losses and spend time
and money defending pending lawsuits and arbitrations and responding to administrative investigations.



We are currently a party to several legal proceedings
filed against us. We are also subject to labor-related lawsuits filed by current and former employees in connection with pension
plans and retirement benefits. For example, as of December 31, 2016, Ecopetrol S.A. was a party to 2,774 legal proceedings
relating to civil, administrative, environmental, tax, and labor claims filed against us of which 341 met the accounting threshold
for an accrual provision. Additionally, Ecopetrol S.A.’s subsidiaries were a party to 1,136 legal proceedings relating to
civil, administrative, environmental, tax, and labor claims filed against them of which 86 met the accounting threshold for an
accrual provision. We allocate substantial amounts of money and time to defend against these claims, in which the claimants often
seek substantial sums of money as well as other remedies. See Note 23– Accrued liabilities and provisions to our consolidated
financial statements and see the section Risk Review—Legal Proceedings and Related Matters. In addition, in
accordance with Colombian law, we are subject to surveillance and investigations by certain administrative control entities in
Colombia, which are intended to determine whether public funds have been misappropriated or whether they have been used in compliance
with applicable law. Such investigations may divert the attention of management and subject the Company to reputational risk and
increase difficulties in retaining talent. See the section Risk Review—Legal Proceedings and Related Matters.



| | 5.1.4 | Risks Related to our ADSs
| | ----- | -------------------------



This section discusses potential risks associated
with an investment in our American Depository Shares (as opposed to our common shares) by investors outside Colombia.



Holders of our ADSs may encounter
difficulties in protecting their interests.



Holders of our ADSs do not have the same voting
rights as holders of our shares. As set forth in the deposit agreement, dated September 16, 2008, among Ecopetrol S.A., JP Morgan
Chase Bank, N.A., as depositary, and all holders from time to time of our American Depositary Receipts (the “Deposit Agreement”),
ADSs may instruct our current depositary, JP Morgan Chase Bank, N.A., to vote on shareholder matters prior to a shareholders’
meeting. Colombia law does not, however, require Ecopetrol to request proxies from existing shareholders. Thus, shareholders may
not become aware of some matters in time to instruct the depositary to vote their shares.





108







The Deposit Agreement provides ADSs with the
right to instruct the depositary to vote common shares separately. The viability of this contractual provision is unclear. This
is because regulatory agencies have advanced inconsistent positions regarding whether a depository must vote common shares as a
single block or may vote them separately. Going forward, the Colombian regulatory authorities may change their interpretation as
to how the voting rights should be exercised by ADS holders, and such possible interpretation could adversely affect the value
of the common shares and ADSs.



Our ADSs holders may be subject
to restrictions on foreign investment in Colombia.



Colombia’s International Investment Statute
(the set of rules and regulations which govern the foreign exchange market and the transactions thereto, which include Resolution
8 of 2000 and External Circular No. DCIN 83 issued by the Colombian Central Bank among others) regulates the manner in which non-Colombian
residents can invest in Colombia and participate in the Colombian securities market. Among other requirements, Colombian law requires
foreign investors to register certain foreign exchange transactions with the Colombian Central Bank and outlines the necessary
procedures to authorize certain types of foreign investments. Colombian law requires that certain foreign exchange transactions,
including international investment in foreign currency between Colombian residents and non-Colombian residents, must be made through
authorized foreign exchange market intermediaries. Any income or expenses under our American Depositary Receipt, or ADR, program
must be made through the foreign exchange market.



Investors acquiring our ADRs are not required
to register with the Colombian Central Bank directly, as they will benefit from the registration to be obtained by the custodian
for our common shares underlying the ADRs in Colombia. If investors in ADRs choose to surrender their ADRs and withdraw common
shares, they must register their investment in the common shares as a portfolio investment through their local representative,
which may be a brokerage firm, trust company or investment management companies supervised by the Superintendence of Finance (Superintendencia
Financiera de Colombia). Investors will only be allowed to transfer dividends abroad after their foreign investment registration
procedure with the Colombian Central Bank has been completed. Investors withdrawing common shares could incur expenses and/or suffer
delays in the application process. The failure of a non-resident investor to report or register foreign exchange transactions with
the Colombian Central Bank relating to investments in Colombia on a timely basis may prevent the investor from remitting dividends
abroad, or result in the initiation of an investigation and in the imposition of fines. In the future, the Government, the Colombian
Congress or the Colombian Central Bank may amend Colombia’s International Investment Statute or the foreign investment rules,
which could result in more restrictive rules and could negatively affect trading of our ADSs.



Colombia currently has a free convertibility
system. If a more restrictive convertibility system is implemented, the depositary may experience difficulties when converting
Colombian Peso amounts into U.S. dollars to remit dividend payments. Also, currently Colombia has a floating exchange rate system
that might be subject to change in the future. See the section Shareholder Information—Exchange Controls and Limitations.



Holders of our ADSs may not be
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 organized under
the laws of Colombia. In addition, most of the members of our Board of Directors (“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
of 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 judgments against us or them in U.S. courts 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 the sectionShareholder Information—Enforcement of Civil Liabilities.





109







The protections afforded to minority
shareholders in Colombia are different from those in the United States, and may be difficult to enforce.



Under Colombian law, the protections afforded
to minority shareholders are different from those in the United States. In particular, the legal framework with respect to shareholder
disputes is substantially different under Colombian law than U.S. law and there are different procedural requirements for commencing
shareholder lawsuits, such as shareholder derivative suits. As a result, it may be more difficult for our minority shareholders
to enforce their rights against us or our Directors or controlling shareholder than it would be for shareholders of a U.S. company.



ADRs do not have the same tax treatment
as other equity investments in Colombia.



Although ADRs represent Ecopetrol’s common
shares, for Colombian tax purposes, ADRs are securities different from their underlying assets. Therefore, ADR holders are not
entitled to the tax treatment granted to holders of the common shares. Such tax treatment includes, among others, those benefits
relating to dividends and profits derived from sale of Colombian common shares. For further information see the section Shareholder
Information—Taxation—Colombian Tax Considerations.



Judgments of Colombian courts with
respect to our ADSs will be payable only in Colombian Pesos.



If proceedings are brought in the courts of
Colombia seeking to enforce the rights of ADS holders of common shares, we will be required to discharge our obligation amounts
in Colombian Pesos. Colombian law provides that an obligation in Colombia to pay amounts denominated in foreign currency may only
be satisfied in Colombian currency at the Representative Market Exchange Rate of the date the judgment is obtained, and such amounts
are then adjusted to reflect exchange rate variations through the effective payment date.



The relative volatility and illiquidity
of the Colombian securities markets may substantially limit our investors’ ability to sell our ADSs at the price and time
they desire.



Investing in securities that are traded in
emerging markets, such as Colombia, often involves greater risk when compared with other world markets, and these investments are
generally considered to be more speculative in nature.



The Colombian securities market is
substantially smaller, less liquid, more concentrated and can be more volatile than other securities markets in the United
States. As of December 31, 2016, the Colombian Stock Exchange (Bolsa de Valores de ColombiaI,or
“BVC”) had a market capitalization of approximately COP$311,384 billion (US$103,770 million using the closing
rate for 2016), a 12% increase when compared with the amount at the end of 2015, a daily average trading volume of
approximately COP$194,116 million (US$64.69 million, using the average exchange rate for 2016), a 42% increase when compared
with the volume in 2015. By comparison, the New York Stock Exchange (the “NYSE”) had a market capitalization of
US$19.6 trillion as of December 31, 2016, and a daily trading volume of approximately US$68.9 billion in 2016.



As of December 31, 2016, our shares represented
the highest market capitalization of the BVC accounting for as of 7.6% of the total COLCAP index, which reflects the price volatility
of the 20 most-liquid stocks.



Given the current ownership structure of our
shares, it may be difficult for you to purchase large quantities of shares from a single shareholder. We cannot assure you that
a liquid trading market for our ADSs will develop or, if developed, that it will be maintained. Without a liquid trading market,
the ability of investors in our ADSs to sell them at the desired price and time could be substantially limited.



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
of the Superintendence of Finance and the BVC. 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 interim information about us than
you would receive from a U.S. issuer.





110







| | 5.1.5 | Risks Related to State Ownership
| | ----- | --------------------------------



Our controlling shareholder’s
interests may be different from those of our minority shareholders.



Colombian Law 1118 of 2006 requires the Nation
to maintain the majority of our outstanding capital stock. The Nation currently holds 88.49% of our outstanding capital stock,
making it our controlling shareholder. The Nation as our controlling shareholder has majority voting rights at the shareholders’
meeting to elect the members of our Board of Directors. The Nation may propose and approve decisions that are in its own interest
and in furtherance of its own economic and political interests that do not necessarily benefit minority shareholders.



Our controlling shareholder may approve dividends
at the ordinary general shareholders’ meeting, notwithstanding the interest of minority shareholders, in an amount that results
in us having to reduce our capital expenditures or increase our debt levels, thereby negatively affecting our prospects, results
of operations and financial condition. See the section Shareholder Information—Dividend Policy.



Additionally, given our controlling shareholder’s
interests, it may undertake projects, approve decisions or make announcements about its intentions related to its holding of our
capital stock which may not be in our best interest or in the best interest of our minority shareholders, including holders of
our ADSs, and could impact the price of our shares or ADSs.



| | 5.2 | Risk Management
| | --- | ---------------



| | 5.2.1 | Managing Risk through our Internal Control System
| | ----- | -------------------------------------------------



Under the leadership of the Vice-Presidency
of Compliance, Ecopetrol S.A. consolidated its internal control systems into an unified system that integrates the best practices
called for by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013), Sarbanes–Oxley Act (SOX),
governance and management of enterprise IT (COBIT), Enterprise Risk Management (ERM) and our ethics and compliance rules, with
the aim of establishing an integrated management system for all control components; thereby allowing us to strengthen all of our
control system.



The main purpose of the Ecopetrol S.A.’s
Internal Control System is to provide reasonable assurance regarding the achievement of all of the Company’s objective relating
to operations, strategy, reporting and compliance, through the appropriate risks management and ensuring the effectiveness of its
controls. The system performance is systematically monitored by the Board of Directors semiannually.



Ecopetrol S.A.’s Internal Control System
is aligned to the Company’s strategy and business processes and gives responsibility to all employees to manage risk, to
maintain the effectiveness of controls, to report incidents and deficiencies and to ensure continuous improvement of processes.



The risk management component of our Internal
Control System is in charge of identifying events or situations that may affect our defined objectives, assessing and prioritizing
them to implement the most appropriate response. This component has been designed and implemented across the organization, with
a two-level focus: Enterprise Risk and Processes Risks.



| | (i) | Enterprise Risks: Are those risks that are directly associated with the business strategy plan
of the Company and are systematically monitored by the Management Committee on a monthly basis. The management of those risks is
led by a member of the Management Committee; and each risk has a defined treatment plan and monitoring indicators.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Processes Risks: Are those risks that tend to identify potential failures in the activities related
to our core and support business processes that drive us to achieve our strategic objectives. At this level, each process has its
own identified risks with respective mitigation methods, including financial and non-financial control, treatment plans and/or
monitoring indicators.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





111







Our risk management approach is based around
the risk management cycle, consisting in five main stages: planning, identifying, evaluating, treatment and monitoring risks, as
well as communication across stages. This cycle is supported in three pillars of risk management: culture, organizational structure
and normative and management tools.



Three of our most important tools within the
risk management component are:



| | (i) | Risk Assessment Methodology: In order to properly prioritize mitigation, treatment and monitoring
efforts of risk management at the process level, a standardized methodology was established to assess inherent and residual risk
levels. The risk level (Very High, High, Medium, Low or None) is obtained from the combination of the consequences (impacts) and
the probability of occurrence of those consequences. According with the level of risk, action plans for management and mitigation
are defined.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Mitigation Plans: Each year, in the risk management cycle, we define and implement mitigation plans
in order to reduce the levels of exposure to risk through mitigation or elimination of some of its causes. Metrics and goals must
be defined during the development of each plan to ensure its effectiveness and to prioritize our efforts on those with the greatest
impacts.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Monitoring Indicators: As part of the monitoring stage of the risk management cycle, Ecopetrol
has implemented Key Risk Indicators (KRIs) which are metrics used to provide early signals of increasing risk exposures. These
signals constitute information for proactive decision making in order to avoid risk materialization.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ecopetrol has defined guidelines and minimum
requirements to implement an Internal Control System framework for its subsidiaries. These guidelines provide different classifications
according to three important variables: the size of the organizational structure, the scope of SOX and the asset value of each
subsidiary. The classification of each subsidiary determines the scope of implementation (Basic, Intermediate and Complete) of
our Internal Control System. Under those guidelines, each subsidiary must report its performance to its enterprise management committee,
audit committee, or board of directors (or whoever is acting on their behalf). In addition, they have to report it annually to
Ecopetrol S.A. To ensure compliance with the above measures, the subsidiaries have methodological support from Ecopetrol S.A. when
it is requested.



| | 5.2.2 | Managing Information Security and Cybersecurity
| | ----- | -----------------------------------------------



Ecopetrol S.A. has a dedicated management team
focused on information security issues such as risk analysis, treatment of information, safe information management practices,
classification of critical business information, control systems compliance and effectiveness of available information security
technologies, all of which are articulated with the ERM system at the enterprise level.



Ecopetrol S.A. has included cybersecurity risk
as one of the key enterprise risks. Based on that, a working group formed in 2014, coordinated by the information security area
with the participation of industrial control systems specialists, has been understanding the new challenges of cybersecurity risk;
developing activities to identify critical digital assets and its security threats. During 2016, Ecopetrol S.A., as a NOC (National
Oil Company), reported to the Cyber Defense Command Unit (Comando Conjunto Cibernético, an entity under the control
of the Colombian Ministry of Defense) the first basic inventory of its critical cybernetic infrastructure to be included in the
classified catalogue of national critical cybernetic infrastructure.



Although Ecopetrol S.A. is still at an early
stage of managing its cybersecurity risks, the working group has developed some activities in order to advance in the incorporation
of cybersecurity practices to enhance the awareness about these risks at an operational level and adjust current information security
practices considering the new cyberthreat context. Likewise, as a result of this process, we are currently incorporating elements
relative to management of the cyber security threat, including, among others, policies, cybersecurity insurance coverage, and specialized
monitoring and control mechanisms.





112









Currently, Ecopetrol S.A. has incorporated a Security Operations Center service, which enhances our ability
to foresee and identify trends in attacks in Ecopetrol S.A.’s information technology infrastructure and to monitor Ecopetrol’s
reputation on the internet.



| | 5.2.3 | Managing Financial Risk
| | ----- | -----------------------



We are exposed to certain risks associated
with the nature of our operations and the financial instruments we use. Among the risks that affect our financial assets, liabilities
and expected future cash flows are changes in commodity prices, currency exchange rates, interest rates and the credit quality
of our counterparties.



Commodity price risk is associated with
our day-to-day operations as we export and import crude oil, natural gas and refined products. We occasionally use hedges to partially
protect our financial results from price fluctuations taking into account that part of our financial exposure under purchase contracts
for crude oil and refined products depends on international oil prices. We believe that the risk of such exposure is partially
naturally hedged since we either export crude oil at international market prices or sell refined products at prices that are correlated
to international market prices. We do not use derivative financial instruments for speculative or profit-generating purposes.



Currency risk arises in our operations
given the fact that most of our revenues are derived from sales of products quoted in or with reference to U.S. dollars. Therefore
when the Colombian Peso depreciates against the U.S. dollar, our revenues converted into Colombian Pesos, increase. Conversely,
when the Colombian Peso appreciates against the U.S. dollar, our revenues decrease. On the other hand, imported goods, oil services
and the debt, which is mainly denominated in U.S. dollars, become less expensive when the Colombian Peso appreciates against the
U.S. dollar and more expensive when the Colombian Peso depreciates against the U.S. dollar.



As of December 31, 2016 our U.S. dollar-denominated
total debt was US$15.2 billion, 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. Out of this total, US$12 billion relate to Ecopetrol
S.A., whose functional currency is the Colombian Peso. Therefore, when the Colombian Peso depreciates against the U.S. dollar,
Ecopetrol S.A. is exposed to an exchange rate loss. In contrast, when the Colombian Peso appreciates against the U.S. dollar, Ecopetrol
S.A. is exposed to an exchange rate gain. Some of the Ecopetrol Group’s subsidiaries have the U.S. dollar as functional currency
and are not exposed to a material exchange rate risk resulting from fluctuations in the Colombian Peso against the U.S. dollar.
On the asset side, when the financial statements of the Group are consolidated, the exchange rate differential of the subsidiaries’
assets and liabilities whose functional currency is the U.S. dollar is recognized directly in equity, as part of other comprehensive
income.



Taking previous considerations into account,
Ecopetrol seeks to identify and manage currency risk in a comprehensive manner, using an integrated analysis of natural hedges
in order to benefit from the correlation between income or investments in a foreign operations and debt denominated in foreign
currency. In addition, the risk management strategy of the Company may involve the use of financial derivative instruments, and
non-derivative financial instruments. On October 1, 2015, Ecopetrol S.A. adopted hedge accounting as part of its risk management
strategy, using the natural hedge between exports and dollar-denominated debt. US$5.4 billion of Ecopetrol S.A.’s debt in
U.S. dollars was designated as hedge instrument of its future export sales for the period 2015 – 2023. On June 8, 2016, Ecopetrol
S.A. continued its hedge accounting strategy, using the natural hedge between some of its foreign investments and its dollar-denominated
debt in an amount of US$5.2 billion. The remaining portion, 12% of Ecopetrol S.A.’s dollar-denominated debt, as well as the
financial assets and liabilities denominated in foreign currency continue to be exposed to the fluctuation of the exchange rate,
which means that an appreciation of the Colombian peso against the U.S dollar could generate a loss if companies whose functional
currency is the Colombian peso have an active net position in U.S. dollars or a gain if they have a net liability position in U.S.
dollars. Conversely, a depreciation of the Colombian peso against the U.S. dollar could generate a gain if companies whose functional
currency is the Colombian peso have a net active position in U.S. dollars or a loss if they have a net liability position in U.S.
dollars. Finally, the Company maintains enough cash in Colombian pesos and U.S. dollars to meet its expenses in each currency (see
Note 4.1.5 to our financial statements for further explanation of the accounting policy and Note 31.2 for details of the hedge
accounting adopted). With the adoption of hedge accounting, the effect of volatility of foreign exchange rate on the hedged portion
of the debt is recognized directly in equity, as part of other comprehensive income. Our hedge management strategy is completely
focused on our accounting, reason why the ultimate effect will only be determined when the hedge operations come to an end. Nevertheless,
it is important to bear in mind that for Ecopetrol S.A’s cash flow, the effect of the Colombian peso appreciation against
the U.S dollar is positive given the fact that we habitually convert our income in foreign currency to Colombian pesos.



113







Interest rate risk arises from our exposure
to changes in interest rates mainly as a result of the issuances of floating rate debt linked to LIBOR, DTF and CPI (with a participation
of 18.9%, 8.2% and 3.5%, respectively, of the nominal debt balance as of December 31, 2016). Thus, volatility in interest rates
may affect the fair value of and cash flows related to our investments and floating rate debt. In 2016, our analysis of credit
risk events and global financial markets drove us to decide not to hedge interest rate risk. Nevertheless, our treasury office
continuously monitors the performance of interest rates and the effect of interest rates on our financial statements.



The trust funds linked to Ecopetrol S.A.’s
pension obligations (PAP) are also exposed to changes in interest rates, as they include fixed- and floating-rate instruments that
are mark to market. This exposure is continuously monitored by our treasury office given the potential impact volatility may have
on our financial results. The treasury office’s information is gathered from reports provided by the asset managers. These
reports refer to regulatory limits as well as market, credit and liquidity risks. The investment guidelines with respect to the
PAPs are issued by the Colombian regulation for pension funds, as stipulated in the Decree 941 of 2002 and Decree 1861 of 2012,
where it is indicated that they have to follow the same regime as the regular obligatory pension funds in their moderate (i.e.,
neither conservative nor aggressive) portfolio. For further information regarding the trust funds linked to the pension obligations
of the company, see Note 22.2 Plan assets to our consolidated financial statements.



Finally, counterparty risk is the potential
probability that a borrower or counterparty defaults on any obligation. In our case, we are exposed to this risk as we invest in
different financial instruments and receive letters of credit in order to mitigate our exposure with our commercial counterparties.
We manage this risk through an analysis of an issuer’s creditworthiness, stock price behavior, spreads on credit default
swaps and the probability of default.



Investment Guidelines



Ecopetrol S.A.



Following the promulgation of Decree 1525
of 2008, which provides general rules on investments for public entities, Ecopetrol S.A.’s management established guidelines
for our investment portfolios. These guidelines determine that investments in Ecopetrol S.A.’s U.S. dollar portfolio are
generally limited to investments of our excess cash in fixed-income securities issued by entities rated A or higher in the long
term and A1/P1/F1 or higher in the short term (international scale) by Standard & Poor’s Ratings Services, Moody’s
Investors Service or Fitch Ratings. In addition, Ecopetrol S.A. may also invest in securities issued or guaranteed by the U.S.
government or Colombian government, without regard to the ratings assigned to such securities. In Ecopetrol S.A.’s Colombian
Peso portfolio, it must invest our excess cash in fixed-income securities of issuers rated AAA in the long term, and F1+/BRC1+
in the short term (local scale) by Fitch Ratings Colombia or BRC Standard & Poor’s. In addition, Ecopetrol S.A. may also
invest in securities issued or guaranteed by the Colombian government without rating restrictions.



In order to diversify risk in our Colombian
Peso portfolio, Ecopetrol S.A. does not invest more than 10% of the excess of cash in one specific issuer. In the case of our U.S.
dollar portfolio, it does not invest more than 5% of the excess of cash in one specific issuer in the short term (up to one year),
or 1% in the long term.



114







Ecopetrol S.A.’s investment portfolio
in U.S. dollars is segmented into four tranches, each one matching our liquidity needs. The working capital tranche is calculated
taking into account our cash flow needs for the next 60 days. The liquidity tranche is calculated as the contingent cash flow
needs over the working capital, taking into account the development of capital expenditures related to projects. The asset liability
tranche is built to match our long-term debt. The investment tranche includes the remaining amount of the total portfolio after
deducting the amounts pertaining to the above mentioned tranches and after subtracting the Colombian Peso portfolio.



Ecopetrol S.A.’s investment portfolio
in Colombian Pesos is segmented in two tranches, each one matching our liquidity needs. The first tranche is calculated taking
into account our cash flow needs for the next 30 days, and the second tranche is built for investment purposes.



| | 5.3 | Legal Proceedings and Related Matters
| | --- | -------------------------------------



We are a party to various legal proceedings
in the ordinary course of business. Other than the proceedings disclosed in this annual report, we are not involved in any pending
(or, to our knowledge, threatened) litigation or arbitration proceeding that we believe will have a material adverse effect on
our Company. Other legal proceedings that are pending against or involve us and our subsidiaries are incidental to the conduct
of our and their business. We believe that the ultimate disposition of such other proceedings individually or in an aggregate basis
will not have a material adverse effect on our consolidated financial condition or results of operations.



As of December 31, 2016, Ecopetrol S.A.
was a party to 2774 legal proceedings relating to civil, administrative, environmental, tax and labor claims filed against us in
the Colombian courts and arbitration tribunals, of which 341 had an accrual provision. We allocate sufficient amounts of money
and time to defend these claims. Historically, we have been successful in defending lawsuits filed against us. Other than the environmental
administrative proceedings described in the last paragraph of this section, based on the advice of our legal advisors, it is reasonable
to assume that the litigation procedures brought against us will not materially affect our financial position or solvency regardless
of the outcome. See Note 23 – Accrued liabilities and provisions to our consolidated financial statements included in this
annual report for a discussion of our legal proceedings.



Caño Limón –
Coveñas Crude Oil Pipeline Spill



On December 11, 2011, the Caño
Limón-Coveñas oil pipeline ruptured and caused the spill of approximately 3,267 barrels of crude oil into the
Iscala creek, which connects with the Pamplonita River that provides water to the city of Cúcuta. The incident did not cause
any fatalities or injuries.



A class action lawsuit has been filed against
Ecopetrol S.A. and against employees of the company, and the First Administrative Court of Cucuta has jurisdiction to conduct the
case, which is in the probatory stage.



The Regional Environmental authority of
Norte de Santander, or Coporación Autónoma Regional de la Frontera Nororiental (CORPONOR) has filed a lawsuit against
Ecopetrol at the First Administrative Court of Cucuta claiming for (i) the environmental loss caused by the incident and (ii) for
compensation costs relating to the environment damage for approximately COP$33 billion. Ecopetrol’s legal counsel filed
to dismiss the lawsuit on June 2, 2014, based on three grounds: (i) there is no proof of environmental loss, (ii) CORPONOR
does not have the authority to file this lawsuit and (iii) CORPONOR’s petition for direct compensation is not the proper
legal action according to the applicable procedural rules. Currently this lawsuit is in probatory stage.



Ecopetrol and national and local authorities
are developing a project for the development of an alternative to the water supply in the intake of the aqueduct in Cúcuta,
which was approved by the Company’s Board of Directors in December 2011 as part of the strengthening of its contingency
plans and its relationship with its stakeholders. Currently local authorities are attempting to acquire the necessary economic
resources for the project and Ecopetrol has finalized the basic and detailed engineering.



115







BT Energy Challenger



On October 22, 2014, we were served
with a class action suit against us seeking monetary damages of approximately COP$7.4 trillion related to an incident that occurred
on August 21, 2014, during the loading operations of the BT Energy Challenger vessel. The claimants alleged possible damage
to the port area of Ecopetrol’s terminal in Coveñas, as well as of marine and submarine areas and beaches that form
the geographical area of the Morrosquillo Gulf. This allegation is currently under investigation by the Harbor Master of Coveñas.
Ecopetrol filed a motion requesting the judge to require the claimants to amend their claim to more precisely set forth the facts
and evidence it believes establishes Ecopetrol’s liability.



On March 3, 2015, Ecopetrol filed its statement
of defense arguing the exclusive fault of a third party. On October 20, 2015, the Court denied a class action of more than 100
informal traders in the region because there is no common identity with the initial class (hotel employees). However, during 2016
the Sucre Administrative Tribunal accepted another 1208 informal traders and fishermen as claimants.



On March 10, 2017, a mandatory conciliatory
hearing was held in order to seek an agreement but it was declared unsuccessful.



PetroTiger



As highlighted in previous 20-F and 6-K
filings, on January 6, 2014, the United States Department of Justice (DOJ) announced the unsealing of charges against two
former co-chief executive officers (CEOs) and the former general counsel of PetroTiger Ltd. (PetroTiger), alleging, among other
things, violations of the U.S. Foreign Corrupt Practices Act (FCPA) and conspiracy to commit violations of the FCPA and money laundering
in connection with payments made to an Ecopetrol employee. By the time of the DOJ announcement, that employee no longer worked
at the Company. The DOJ alleged the payments were made to secure Ecopetrol’s approval for PetroTiger’s entry into an
oil services contract with Mansarovar Energy Colombia Ltd. Ecopetrol participated in the Mansarovar project as non-operating partner
in a joint operating agreement. Also on January 6, 2014, the DOJ announced that the general counsel of PetroTiger had pled
guilty on November 8, 2013, to one count of conspiracy to violate the FCPA and to commit wire fraud. One of the charged former
co-CEOs pleaded guilty on February 18, 2014, to the same charge. On May 9, 2014, the DOJ charged the other former co-CEO with conspiracy
to violate the anti-bribery provisions of the FCPA, conspiracy to commit wire fraud, conspiracy to launder money, and substantive
FCPA anti-bribery and money laundering violations. On June 15, 2015, that co-CEO pleaded guilty to conspiracy to violate the FCPA.



After the DOJ unsealed its charges on January 6,
2014, Ecopetrol filed a complaint the same month, jointly with the Transparency Secretariat of the Presidency of the Republic,
to Colombia’s Attorney General’s office requesting the investigation of individuals who may have been involved in the
wrongdoing related to the Mansarovar contract. Colombian authorities initiated a proceeding related to PetroTiger, and on March 11,
2015, arrested four current Ecopetrol employees and two former Ecopetrol employees related to their investigation of the Mansarovar
project and five other contracts involving PetroTiger and Ecopetrol. To date, the control entities investigations are ongoing.
Throughout 2016, Colombia authorities issued several judgments in connection with former PetroTiger directors, a retired employee
of Ecopetrol and other persons involved.



Ecopetrol has responded to information
requests from the DOJ and Colombian authorities in connection with their investigations of PetroTiger. Ecopetrol has been designated
with the formal status of victim in the local Colombian proceedings. It has terminated the employment of the four charged individuals
who were Ecopetrol employees at the time of the arrests.  Ecopetrol has concluded an internal investigation and has not identified
any new issues relating to PetroTiger.



Salgar-Cartago Multipurpose Pipeline
Spill



On December 23, 2011 our Salgar-Cartago
pipeline ruptured. Internal and external experts believe this incident occurred as a result of creep movement of soil caused by
severe weather conditions, causing the soil surrounding the pipeline to exert strong pressure on the pipeline and rupture it. As
of the date of this annual report, 13 lawsuits related to this incident are active for an approximately worth of COP$16.2 billion.



116









Environmental Administrative Proceedings



As of December 2016, Ecopetrol
S.A. was party to 209 environmental administrative proceedings, of which 193 were initiated before 2015, and 16 during
2016. During 2016, six proceedings were concluded, in four of them we were subject to monetary fines through
Resolutions Corporinoquía Resolution 200.41-16-0551 of May 3, 2016, Corporinoquía Resolution 200.41-16-0873 of
July 18, 2016, Cam Resolution 2134 of July 25, 2016 and Corpoamazonía Resolution 1162 of September 9, 2016. However,
these four proceedings were suspended due to the replenishment of resources. It is not possible for us to determine whether
the pending proceedings could have a material effect on Ecopetrol.



Reficar Investigations



Ecopetrol is a corporation majority owned
by the Colombian Government that administers public resources and Reficar is a wholly owned subsidiary of Ecopetrol. Ecopetrol’s
employees have a statutory responsibility to ensure the proper use of public resources. Reficar’s employees also have a duty
for proper management of public resources.



The conduct of Ecopetrol’s and Reficar’s
employees are generally subject to the control and supervision of the following control entities, among others:



| | · | The Office of the Comptroller General (Contraloría General de la República)
is the state entity entrusted to ensure the proper use of public resources and has the authority to investigate public employees
or private sector employees that use or manage public resources.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The Attorney General’s Office (Procuraduría General de la
                                                                                                               Nación)
                                                                                                               is the entity that supervises compliance with applicable law by public employees and private sector employees that carry out
                                                                                                               public functions. The Office has the responsibility for investigating and disciplining individuals in respect of any failure
                                                                                                               to so comply.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The Prosecutor’s Office (Fiscalía General de la Nación) is the entity
in charge of investigating potential crimes and prosecuting alleged crimes before the court in judicial proceedings.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following are the
most significant investigations and proceedings carried out by the aforementioned state entities:



| | 1. | The Office of the Comptroller General’s investigations and proceedings:
| | -- | -----------------------------------------------------------------------



As a result of
the modifications of the schedule and budget related to Reficar’s expansion and modernization project
(the “Project”), the Office of the General Comptroller initiated a special audit investigation of the Project in
2016 and delivered a final report to Reficar on December 5, 2016. The report made 36 findings most of which were related
to increased costs compared to budget for services, labor and materials. As required, on January 18, 2017, Reficar submitted
an action plan exposing and addressing the 36 findings in the following areas: (i) contract management, (ii) supervision of
engineering standards contracted with third parties, and (iii) documentation of the control, reporting and monitoring
mechanisms of subcontracts.



As a result of the
findings described above the Office of the General Comptroller recently opened actions for financial responsibility (proceso
de responsabilidad fiscal) against 36 individuals and the six companies involved in the Project, including current and
former members of Ecopetrol’s Board of Directors; former members of Reficar’s Board of Directors; current and
former employees of Ecopetrol; and former employees of Reficar, as well as Chicago Bridge & Iron Company N.V., CBI -
Chicago Bridge & Iron company (CB&I) Americas Ltd., Chicago Bridge & Iron Company CB&I UK Limited, CBI
Colombiana S.A., Foster Wheeler USA Corporation and Process Consultants Inc. The current members of Ecopetrol’s board
and senior management subject to these proceedings are Juan Carlos Echeverry Garzón, Chief Executive Officer; and
Joaquín Moreno Uribe, Horacio Ferreira and Mauricio Cárdenas Santamaría, all of them members of the
Board of Directors. These  actions pertain to an eventual reduction of the value of state assets due to a lower than
expected profitability at Reficar as a result of the modifications of the schedule and budget of the project.



117









On January 2017, the
Office of the General Comptroller initiated another special audit in Reficar. As of the date of this annual report, the audit
is in its preliminary stage.



| | 2. | The Attorney General’s Office
                                                                investigations:
| | -- | -------------------------------------------------------------------------------------------------------------



The Attorney
General’s Office currently has two ongoing investigations relating to the Project: (i) the first,
initiated in 2012 against members of Reficar’s Board of Directors at the time, as well as certain current and former
officers of Reficar; and (ii) a more recent investigation regarding delays in the completion of the Project, focusing on the
role of current and former officers of Ecopetrol, as well as current and former members of Ecopetrol’s Board of
Directors.



| | 3. | The Prosecutor’s Office investigations:
| | -- | ---------------------------------------





The Prosecutor’s Office is conducting
a confidential investigation. In connection therewith, on April 27, 2017, the Prosecutor’s Office announced in a press release
its intention to pursue charges for the alleged crimes of document forgery, illegal interest in the execution of agreements, misappropriation
of public funds and unjust enrichment against: (i) four former executives and officials of Ecopetrol and Reficar (ii) one current
employee of Ecopetrol who was assigned to work in Reficar between 2012 and 2016, (iii) two executives of CB&I and (iv) Reficar’s
statutory auditor from 2013-2015. According to the announcement the total amount involved in the alleged charges is estimated
at COP 610 billion pesos (equivalent to approximately US$ 209 million at the Representative Exchange Rate as of May 26, 2017 of
COP 2,911.66 per US$).



The
Ecopetrol and Reficar executives and officials are: Orlando José Cabrales Martínez (Reficar CEO, 2009-12); Reyes
Reinoso Yañez (Reficar CEO, 2012-16), current employee of Ecopetrol; Felipe Laverde Concha (Reficar General Counsel, 2009-March
2017); Pedro Alfonso Rosales Navarro (Ecopetrol Downstream Executive Vice President, 2008-15); and Nicolás Isaksson Palacios
(Reficar Lead Legal Counsel, 2013-January 2017).



The Prosecutor’s Office has not
yet made public the factual basis for such charges, and accordingly we are not in a position to predict the outcome of the Prosecutor’s
Office’s investigation or the disposition of any charges that the Prosecutor’s Office may bring. As of the date of
this annual report, to the best of Ecopetrol’s knowledge, the financial statements continue to fairly represent the financial
and operational condition of the Company in all material aspects and its internal controls remain effective.



In the press release, the Prosecutor’s
Office also announced that in order to conclude the next phases of the investigation, related to, among others, the selection of
the strategic partner, the exit of Glencore and the selection of the contractor, it would be interviewing executives of Ecopetrol,
Reficar, Glencore and the supervisory joint venture conformed by Foster Wheeler USA Corporation and Process Consultants Inc.



In connection with the Prosecutor’s
Office press release, on May 9, 2017, the Audit Committee of the Board of Directors retained a U.S.-based outside law firm to commence
a third-party investigation into the matters set forth in the Prosecutor’s Office announcement.







Ecopetrol and Reficar have cooperated closely
and extensively with the control entities in furthering their investigations and will continue to monitor the status and development
of these investigations.







In March 2016 Reficar filed a Request for
Arbitration before the International Chamber of Commerce against Chicago Bridge & Iron Company N.V., CB&I (UK) Limited,
and CBI Colombiana S.A. with respect to the Engineering, Procurement, and Construction 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
proceeding and seeks no less than US$2 billion in damages plus lost profits from CB&I. On May 25, 2016, CB&I filed an answer
and counterclaim of approximately USD $213 million. On June 27, 2016, Reficar filed its reply to CB&I’s counterclaim
denying any liability to CB&I. On April 28, 2017, Reficar submitted its Non-Exhaustive Statement of Claim and CB&I submitted
its Statement of Counterclaim. The ICC proceeding is currently in its preliminary stage and is scheduled for a hearing in October
2018. The outcome of these actions is unknown.





Bioenergy Special Audit



The Office of the General Comptroller,
in exercise of its fiscal monitoring duties and authority as set forth in Article 267 of the Political Constitution and the law,
has undertaken audits of the performance of the Bioenergy S.A and Bioenergy Zona Franca S.A.S. investments.



On February 6, 2017 the Office of the General
Comptroller initiated a Special Intervention (Special Audit) of Bioenergy Zona Franca S.A.S. and Bioenergy S.A. The Company is
cooperating with the oversight and control entities and has responded to the information requirements that have been requested
to date.



| | 6. | Shareholder
                                         Information
| | -- | ----------------------------------------------------------------



| | 6.1 | Shareholders’ General Assembly
| | --- | ------------------------------



Our Shareholders’ General Assembly
was held on March 31, 2017 and the following matters were approved:



| | · | The plan for distribution of the Company’s profits, which establishes the distribution of an ordinary
dividend per share of twenty-three pesos (COP$23). This dividend to shareholders was paid in one installment on April 28, 2017.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Appointed Ernst & Young as external auditor of Ecopetrol for fiscal year 2017.
| | - | ------------------------------------------------------------------------------



| | · | The new composition of the Board of Directors for the year 2017 as follows:
| | - | ---------------------------------------------------------------------------



118







Non
Independent Directors:



| | Ø | Minister of Finance and Public Credit
| | - | -------------------------------------
| | Ø | Ana Milena López Rocha               



Independent Directors:



| | Ø | Mauricio Cabrera Galvis                                                                                
| | - | -------------------------------------------------------------------------------------------------------
| | Ø | Yesid Reyes Alvarado                                                                                   
| | Ø | Jaime Ardila Gómez                                                                                     
| | Ø | Carlos Cure Cure                                                                                       
| | Ø | Joaquín Moreno Uribe                                                                                   
| | Ø | Horacio Ferreira Rueda (nominated by the hydrocarbon producing provinces)                              
| | Ø | Carlos Gustavo Cano Sanz (nominated by the minority shareholders with the greatest share participation)



| | 6.2 | Dividend Policy
| | --- | ---------------



In 2016, the Board of Directors approved
as a dividend policy under which we are to distribute the distribution of 40% of net income before the effect of impairment of
non-current assets (net of taxes) at the corporate group level. This policy cannot exceed the maximum amount to be distributed
and should keep the Company’s debt metrics in line with an investment grade rating. The maximum amount to be distributed
is the profits available to shareholders (net income after release and appropriation for legal, fiscal and occasional reserves).



Pursuant to Colombian law, dividend distribution
to our shareholders must be approved by a 78% majority of the shares represented in the corresponding shareholders’ meeting. 
In the absence of this special majority, at least 50% of the net profits must be distributed.



On March 31, 2017, our shareholders at
the ordinary general shareholders’ meeting approved an ordinary dividend of 40% of our net income before the impairment of
non-current assets (net of taxes) for the fiscal year ended December 31, 2016.  Given that the fiscal year ended December
31, 2015 resulted in a net loss for Ecopetrol S.A., our shareholders at the Ordinary General Stockholder Meeting held on March 31,
2016, approved that there was no distribution of profits for the fiscal year ended December 31, 2015. Pursuant to Article 456 of
the Code of Commerce the Company absorbed the net loss for the fiscal year ended December 31, 2015 through its legal reserve. 
In 2014 and 2015, the shareholders approved the distribution of 80.1% and 70% of 2013 and 2014 net income, respectively. 
See the section Financial Review—Liquidity and Capital Resources—Dividends.



Ecopetrol S.A. is required to have legal
reserves equal to 50% of its subscribed capital.  If the legal reserves are less than 50% of subscribed capital, we will contribute
10% of net income to our legal reserves every year until our legal reserves meet the required level.



| | 6.3 | Market and Market Prices
| | --- | ------------------------



Starting on August 2010, our ADSs began
trading on the Toronto Stock Exchange (“TSX”) under the symbol “ECP.” On February 17, 2016, we announced
the application for voluntary delisting from the Toronto Stock Exchange after in an ordinary meeting held on January 27, 2016,
during which the Board of Directors made the decision to delist from the TSX. This decision was based on the Board of Director’s
assessment of, among other factors, the limited trading activity of our ADRs in Canada, a liquid market for our ADRs on the NYSE
and for our ordinary shares on the local Colombian Stock Exchange (Bolsa de Valores de Colombia), both of which enable interested
investors to acquire a participation in Ecopetrol S.A. The time and administrative efforts associated with maintaining the listing
of the ADRs on the TSX were also taken into account. On March 2, 2016, Ecopetrol’s ADRs were delisted from the TSX. After
delisting from the TSX, the ADRs have continued to trade on the NYSE and the ordinary shares have continued to trade in the Colombian
stock market. Therefore, the Company continues to be subject to United States as well as Colombian reporting and corporate governance
obligations.



119







The following table sets forth reported
high and low closing prices in Colombian Pesos for our shares and the reported average daily trading volume of our shares on the
BVC for the periods indicated. The table also sets forth information on the trading price of our shares in Colombian Pesos and
U.S. dollars, as well as the average trading volume.



Table 55 – Shares Traded on the
Bolsa de Valores de Colombia



|                                |  | Shares Traded on the BVC   |      
|------------------------------- |  | -------------------------- | -----
|                                |  | Colombian Pesos per  share |      
|                                |  | High                       |      
|2012                            |  |                            | 5,850
|2013                            |  |                            | 5,710
|2014                            |  |                            | 4,030
|2015                            |  |                            | 2,305
|2016                            |  |                            | 1,465
|Most recent quarters            |  |                            |      
|First quarter 2015              |  |                            | 2,305
|Second quarter 2015             |  |                            | 2,085
|Third quarter 2015              |  |                            | 1,675
|Fourth quarter 2015             |  |                            | 1,515
|First quarter 2016              |  |                            | 1,425
|Second quarter 2016             |  |                            | 1,465
|Third quarter 2016              |  |                            | 1,410
|Fourth quarter 2016             |  |                            | 1,385
|First quarter 2017              |  |                            | 1,415
|Most recent six months          |  |                            |      
|November 2016                   |  |                            | 1,330
|December 2016                   |  |                            | 1,385
|January 2017                    |  |                            | 1,415
|February 2017                   |  |                            | 1,395
|March 2017                      |  |                            | 1,350
|April 2017                      |  |                            | 1,400
|May 2017 (through May 26, 2017) |  |                            | 1,480










| | (1) | U.S. dollars per common share translated at the Representative Market Exchange Rate as of each
period.
| | --- | ------------------------------------------------------------------------------------------------------



The following table sets forth reported
high and low closing prices in U.S. dollars for our ADSs and the average daily trading volume of our ADSs on the NYSE for the periods
indicated. The table also sets forth information on the trading price of our ADSs in U.S. dollars, as well as the average trading
volume.



Table 56 – Shares Traded on the
New York Stock Exchange



|                                |  | ADSs Traded on NYSE     |      
|------------------------------- |  | ----------------------- | -----
|                                |  | U.S. dollars per ADS(1) |      
|                                |  | High                    |      
|2012                            |  |                         | 67.48
|2013                            |  |                         | 63.80
|2014                            |  |                         | 41.16
|2015                            |  |                         | 19.80
|2016                            |  |                         | 10.04
|Most recent quarters            |  |                         |      
|First quarter 2015              |  |                         | 19.80
|Second quarter 2015             |  |                         | 17.48
|Third quarter 2015              |  |                         | 12.72
|Fourth quarter 2015             |  |                         | 10.63
|First quarter 2016              |  |                         | 9.22 
|Second quarter 2016             |  |                         | 10.04
|Third quarter 2016              |  |                         | 9.80 
|Fourth quarter 2016             |  |                         | 9.37 
|First quarter 2017              |  |                         | 9.67 
|Most recent six months          |  |                         |      
|November 2016                   |  |                         | 8.80 
|December 2016                   |  |                         | 9.25 
|January 2017                    |  |                         | 9.56 
|February 2017                   |  |                         | 9.67 
|March 2017                      |  |                         | 9.33 
|April 2017                      |  |                         | 9.72 
|May 2017 (through May 26, 2017) |  |                         | 10.24








| | (1) | Represents the right to receive 20 of our common shares.
| | --- | --------------------------------------------------------



120







Registration and Transfer of Shares



Under Colombian law, transfers of shares
must be registered on the issuer’s stock ledger. Only those holders registered on the stock ledger are considered by law
as shareholders. Ecopetrol’s shares are in electronic form, other than those shares held by the Nation, which are in physical
form.



Transfers of shares evidenced in electronic
form required to be negotiated through the Colombia Stock Exchange. In Colombia, only the relevant stockbrokers called sociedades
comisionistas de bolsa are authorized to make the transfers of shares through the Colombia Stock Exchange. The transfers of
shares are registered in the Centralized Security Deposit (Depósito Centralizado de Valores) or DECEVAL, through
the relevant stockbrokers. DECEVAL records the share transfer on its systems, in order to make the corresponding registration in
the issuer stock ledger.



Under Colombian legislation, if a transfer
of shares for a value equivalent to or higher than 66,000 UVR (the UVR was COP$ 242.4513 as of December 31, 2016) must be
made through the BVC if the shares are registered with the BVC. Otherwise, shareholders can freely negotiate a transfer of shares.



Nevertheless, the following transfers are
not required to be executed through the BVC:



| | · | Transfers between shareholders who are considered to be the same beneficial owner;
| | - | ----------------------------------------------------------------------------------



| | · | Transfers of shares owned by financial institutions, under supervision of Superintendence of Finance,
that are in a liquidation process;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | · | Repurchases of shares by the issuer;
| | - | ------------------------------------



| | · | Property delivered in lieu of payment, or payment of money or other valuable property, different
than the amount owed or demanded, in exchange for the extinguishment of the debt;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Transfers of shares made by the Nation or the Financial Institutions Warranty Fund (Fondo de
Garantías de Instituciones Financieras) or FOGAFIN;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Transfers of shares issued abroad by Colombian companies, provided they take place outside Colombia;
| | - | ----------------------------------------------------------------------------------------------------



| | · | Transfers of shares issued by foreign companies, offered through a public offer in Colombia, provided
that they take place outside Colombia; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Any other transaction specifically authorized by the Superintendence of Finance to take place outside
the BVC.
| | - | --------------------------------------------------------------------------------------------------------------



121







For the purposes described above,
multiple transfer transactions made within one hundred twenty (120) calendar days, between the same parties on shares of the same
issuer and under similar conditions, are treated as a single transfer.



| | 6.4 | Ecopetrol ADR Program Fees
| | --- | --------------------------



Fees and Charges That a Holder
of Our ADSs May Have to Pay, Either Directly or Indirectly



JPMorgan Chase Bank, N.A., our 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 ADS (or any portion thereof) issued, delivered,
reduced, cancelled or surrendered, as 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 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 ADS holders, by any party depositing or withdrawing shares or by any party surrendering ADSs or to whom ADSs are issued
(including, without limitation, issuance pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding
the ADRs or the deposited securities or a distribution of ADSs), whichever is applicable:



| | · | A fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs;
| | - | -------------------------------------------------------------------------------------------



| | · | A fee of up to US$0.02 per ADS for any cash distribution made pursuant to the Deposit Agreement;
| | - | ------------------------------------------------------------------------------------------------



| | · | A fee of US$0.05 per ADS per calendar year (or portion thereof) for services performed by the Depositary
in administering our ADR program (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);
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Any other charge payable by the Depositary, or any of the Depositary’s agents, including,
without limitation, the custodian, or the agents of the Depositary’s agents in connection with the servicing of our shares
or other deposited securities (which charge shall be assessed against registered holders of our 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 registered holders or by deducting
such charge from one or more cash dividends or other cash distributions);
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 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 shares) but which securities or the net cash proceeds
from the sale thereof are instead distributed by the Depositary to those holders entitled thereto;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Stock transfer or other taxes and other governmental charges;
| | - | -------------------------------------------------------------



122







| | · | Cable, telex and facsimile transmission and delivery charges incurred at the ADS holder’s
request;
| | - | --------------------------------------------------------------------------------------------------



| | · | 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;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars;
and
| | - | -------------------------------------------------------------------------------------------------------



| | · | Such fees and expenses as are incurred by the Depositary (including, without limitation, expenses
incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment)
in delivery of deposited securities or otherwise in connection with the Depositary’s or its custodian’s compliance
with applicable laws, rules or regulations.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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.



Fees and Other Direct and Indirect Payments Made by the
Depositary to Us



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. In 2014, reimbursements were made in the amount of approximately US$3,093,346
for expenses related to investor relations activities. In 2015, reimbursements were made in the amount of approximately US$2,069,202
for expenses related to investor relations activities. In 2016, reimbursements were made in the amount of approximately US$2,366,395
for expenses related to investor relations activities.



| | 6.5 | Taxation
| | --- | --------



| | 6.5.1 | Colombian
                                         Tax Considerations
| | ----- | ---------------------------------------------------------------------



The following is a general description
of the Colombian tax considerations for investments in common shares in Colombia or for the purchase of ADSs, in a foreign securities
market. This description is based on applicable law in effect as of the date of this annual report is issued, which may be subject
to changes.



Prospective purchasers of common shares
or ADSs should consult their own tax advisors for a detailed analysis of the tax consequences in Colombia, resulting from the acquisition,
ownership and disposition of common shares or ADSs.



General Rules



Colombian entities and individuals who
are deemed to be residents within the Colombian national territory for Colombian tax purposes are subject to Colombian income tax
on their worldwide income. Foreign entities and individuals, as well as their permanent establishments in Colombia, who are not
deemed to be residents in Colombia for tax purposes are subject to income tax in Colombia only with respect to their national-source
income, which is generally defined as income obtained from (i) the rendering of services inside Colombian territory, (ii) the exploitation
of tangible and intangible assets in Colombia, and (iii) the sale of tangible or intangible assets that are located inside Colombian
territory at the time of the sale Double taxation treaties signed by Colombia, if applicable, may provide for special regulations
regarding income tax.



Dividends paid by Colombian companies are
deemed Colombian income. However, whether they are taxed or not depends on an imputation system set forth in articles 48 and 49
of the Colombian Tax Code (hereinafter “CTC”). According to this system, dividends are taxable when paid out of non-taxed
profits, in which case a 35% withholding applies when paid to non-resident shareholders. Conversely, they are non-taxable when
paid out of taxed profits.



123







One of the novelties introduced by law
1819 of December 29 of 2016 (the “Tax Reform”) was the creation of a new dividends tax that applies on all dividend
distributions to Colombian individuals or to any type of non-resident shareholder, absent any specific treaty or exception. According
to the Tax Reform, dividend payments made to foreign shareholders will be subject to a 5% withholding. This new tax will only apply
to dividends paid from profits accrued as from fiscal year 2017.



Note that the dividend tax will apply simultaneously
with the aforementioned imputation system. Accordingly, dividends paid from non-taxed profits will be subject to a 35% withholding
for income tax, and an additional 5% dividend tax on the balance. This means that the overall burden in this scenario is 38.25%
(e.g. $100 *35% = $35, plus $65 * 5% = $3.25).



Relief or reduced tax rates may apply under
an applicable treaty to avoid double taxation, but the application of any such rules must be analyzed on a case-by-case basis.



For Colombian tax purposes, an individual
is considered to be a Colombian resident when he/she meets any of the following criteria:



| | (i) | He/she remains in Colombia continuously or discontinuously for more than 183 calendar days within
any given 365-consecutive-day term;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | He/she is related to the Colombian government’s foreign service or to individuals who are
in the Colombian government’s foreign service and who, by virtue of the Vienna Conventions on diplomatic and consular relations,
are exempted from taxes during the time of their service; or
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | He/she is a Colombian national and:
| | ----- | -----------------------------------



| | - | Has a spouse or permanent companion, or dependent children, who are tax residents in Colombia,
or
| | - | -------------------------------------------------------------------------------------------------



| | - | 50% or more of his or her total income is Colombian source income, or
| | - | ---------------------------------------------------------------------



| | - | 50% or more of his or her assets are managed in Colombia, or
| | - | ------------------------------------------------------------



| | - | 50% or more of his or her assets are deemed to be located or possessed in Colombia, or
| | - | --------------------------------------------------------------------------------------



| | - | Has failed to provide proof of residency in another country (different from Colombia) upon previous
official request by the Colombian tax office, or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | - | He/she has a tax residency in a country considered by the Colombian government to be a low tax
jurisdiction or a tax haven.
| | - | ---------------------------------------------------------------------------------------------------------------------------



Law 1739 of 2014 clarifies that
Colombian nationals who meet any of the following requirements, will not be deemed as tax residents:



| | - | If more than 50% of his or her annual income, has its source in the jurisdiction where he or she
is domiciled and whose country of domicile is not Colombia.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | If more than 50% of his/her assets are located in the jurisdiction where he or she is domiciled
and whose country of domicile is not Colombia.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



For purposes of Colombian taxation, an
entity is deemed to be a “national” or a “Colombian entity” and, therefore, subject to taxation in Colombia
on its worldwide income, if it meets any of the following criteria:



| | (i) | It has its place of effective management, in Colombia during the corresponding year or taxable
period;
| | --- | ------------------------------------------------------------------------------------------------------



| | (ii) | It has its main domicile in the Colombian territory; or
| | ---- | -------------------------------------------------------



124







| | (iii) | It has been incorporated in Colombia, in accordance with Colombian laws.
| | ----- | ------------------------------------------------------------------------



Pursuant to the Colombian Tax Code, a foreign
company or non-resident individual has a permanent establishment in Colombia when said company or individual performs activities
in Colombia through: (1) a fixed place of business (i.e., branches, factories or offices), or (2) an individual who is not an independent
agent empowered to execute agreements on behalf of the foreign company. As noted above, permanent establishments are considered
Colombian taxpayers in connection with the Colombian-source income and Colombian-source taxable gains attributed to said permanent
establishment. A foreign company or entity will not be deemed to have a permanent establishment by the sole fact that it acts through
a broker or any other independent agent. In addition, passive-income generating activities, such as dividends, royalties and interests,
typically do not qualify as entrepreneurial and are not deemed to create permanent establishments.



Tax Treatment of a Non-Colombian
Entity and a Non-Resident Individual of Colombia Who Purchases an ADS in a Foreign Securities Market



Dividends



As a general rule, dividends paid to foreign
companies, foreign entities or non-resident individuals who are investing in ADSs which underlying assets are Colombian shares
are treated as Colombian-source income and are thus subject to Colombian income tax.



To avoid double taxation, dividends paid
by Colombian entities are not subject to income tax at the shareholder level when they are paid out of corporate profits that have
been previously taxed at the corporate level. As of taxable year 2017, a withholding tax on dividends is triggered for dividends
paid to non-resident shareholders. Withholding tax rates on dividends varies as follows: (i) 5% dividend tax for dividends distributed
out of profits already taxed at the company ́s level; (ii) 35% withholding tax rate for dividends distributed out of profits
not taxed at the company ́s level, plus an additional 5% dividend tax rate after having applied and deducted the initial 35%
withholding. As of fiscal year 2017, for Colombian individuals, dividends will be taxed between 5% and 10% depending on the dividend
amount. Profits that did not pay tax at the corporate level would be subject to a 35% withholding tax at the time of distribution.
In this case, the base amount subject to the dividend tax would be the remaining amount after the 35% withholding tax. Dividends
tax will be applicable to profits generated as of 2017. Finally, dividends paid to local corporations are not subject to this tax.



Further to the above, the applicable withholding
tax rate for an entity or a non-resident individual investing through a Foreign Funds Administration Account (FFAA) is 25%, since
its investment qualifies as portfolio investments and the dividends that are distributed by the Colombian entity are not taxed
at the corporate level (assuming that the dividends cannot be attributed to a permanent establishment in Colombia belonging to
the shareholder). These foreign shareholders subject to this withholding tax are not required to file an income tax return in Colombia.



In addition to the above, the new dividend
tax will apply at a 5% rate.



Taxation of Capital Gains from the
Sale of ADSs



Capital gains obtained from the sale of
ADSs by non-Colombian entities, Colombian individuals who are non-residents in Colombia and foreign non-resident individuals, are
not subject to income tax in Colombia as such sale does not generate Colombian-source income to the extent that the ADSs are not
deemed to be sourced in Colombia.



If the holder of the ADSs who is a non-resident
entity, a Colombian individual who is not a resident in Colombia or a foreign non-resident individual, decides to surrender the
ADSs and withdraw the underlying common shares, it is arguable that such transaction does not generate a capital gain subject to
income tax in Colombia. However, different interpretations may be adopted by the Colombian Tax Authorities on this matter.



125







Tax Treatment in Colombia of
a Non-Colombian Entity and a Non-Resident Individual of Colombia Who Purchases Ecopetrol’s Shares in Colombia’s Securities
Market



Dividends



As a general rule, dividends paid to foreign
companies, foreign entities, or to non-resident individuals in Colombia, who are investing in Colombian shares directly or through
a FFAA, are treated as national-source income; thus, they are subject to Colombian income tax.



To avoid double taxation, dividends are
not subject to income tax at the shareholder level when they are paid out of corporate profits that have been previously taxed
at the corporate level. However, as of taxable year 2017, a withholding tax on dividends is triggered for dividends paid to non-resident
shareholders. Withholding tax rates on dividends varies as follows: (i) 5% dividend tax for dividends distributed out of profits
already taxed at the company ́s level; (ii) 35% withholding tax rate for dividends distributed out of profits not taxed at
the company ́s level, plus an additional 5% dividend tax rate after having applied and deducted the initial 35% withholding.
As of fiscal year 2017, for Colombian individuals, dividends will be taxed between 5% and 10% depending on the dividend amount.
Profits that did not pay tax at the corporate level would be subject to a 35% withholding tax at the time of distribution. In this
case, the base amount subject to the dividend tax would be the remaining amount after the 35% withholding tax. Dividends tax will
be applicable to profits generated as of 2017. Finally, dividends paid to local corporations are not subject to this tax.



For fiscal year 2017 if the shareholder
is a non-resident entity or a non-resident individual investing directly, it will be taxed upon distribution, by means of the withholding
tax mechanism, provided that its investment does not qualify as portfolio investments and dividends that are distributed are not
taxed at the corporate level. In this case, dividends will be subject to a 35% withholding tax.



Non-resident entities or non-resident individuals
will be taxed upon distribution by means of the withholding tax mechanism, provided that their investments qualify as portfolio
investments (i.e., investing through a FFAA) and dividends that are distributed by the Colombian entity are not taxed at the corporate
level. In this case, pursuant to Article 18-1 of the Colombian Tax Code, the applicable withholding tax rate is 25%, assuming that
the dividends cannot be attributed to a permanent establishment in Colombia belonging to the shareholder. These foreign shareholders
subject to this withholding tax are not required to file an income tax return in Colombia.



In addition to the above, the new dividend
tax will apply at a 5% rate.



Taxation of Capital Gains for the
Sale of Shares



Pursuant to Article 36-1 of the Colombian
Tax Code, capital gains derived from the sale of shares listed on the BVC and owned by the same beneficial owner, are deemed as
non-taxable income in Colombia, provided that the shares sold during the same taxable year do not represent more than 10% of the
outstanding shares of the listed company. Pursuant to Article 18 of Decree 2634 of 2012, sellers of shares are not required to
file an income tax return for the transfer of securities that are listed in the National Registry of Securities and Issuers (Registro
Nacional de Valores y Emisores) as long as the foreign investment is treated as a portfolio investment according to article
3 of Decree 2080 of 2000.



If the above-mentioned requirements are
not met, the capital gain obtained in the sale of shares is subject to income tax or capital gains tax, under the following rules:



| | · | The gain or loss arising therefrom will be the difference between the sale price and the tax basis
of the shares. As a general rule, the tax basis of shares is equal to the price paid for such shares (i.e., cost of acquisition).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The applicable tax rate and the withholding tax rate have to be determined on a case-by-case basis.
Generally, if the shares have been owned for at least two years, the profits from the sale will qualify as capital gains taxable
at 10%, otherwise, profits will qualify as ordinary income taxable at approximately 40% in fiscal year 2017, approximately 37%
for fiscal year 2018, and 33% as from fiscal year 2019.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



126







Tax Treatment of Non-Residents
Who Purchase Ecopetrol’s Shares in the BVC Market and Exchange Them for ADSs



Dividends



Payment of dividends by Colombian entities
to foreign companies, foreign entities or to non-resident individuals who are investing in ADSs which underlying assets are Colombian
shares or in Colombian shares directly are subject to the tax treatment described above.



Taxation on Capital Gains for the
Sale of Shares



If the holder of the Colombian shares is
a non-resident entity, a Colombian individual who is not a resident in Colombia or a foreign non-resident individual, and such
holder decides to exchange such common shares for ADSs, it is arguable that such transaction should not generate a capital gain
subject to income tax in Colombia. However, different interpretations may be adopted by the Colombian tax authorities on this matter.
For instance, assuming that the exchange of securities is treated as a sale of Ecopetrol’s shares, the seller would be subject
to the tax treatment described above in connection with the taxation of capital gains for the sale of shares. Absent any specific
rules or regulations addressing this specific situation, a case-by-case analysis would be necessary.



| | 6.5.2 | U.S. Federal Income Tax Consequences
| | ----- | ------------------------------------



This summary describes the principal U.S.
federal income tax consequences of the ownership and disposition of common shares or ADSs, but it does not purport to be a comprehensive
description of all of the U.S. tax consequences that may be relevant to a decision to hold or dispose of common shares or ADSs.
This summary applies only to purchasers of common shares or ADSs who will hold the common shares or ADSs as capital assets for
U.S. federal income tax purposes and does not apply to special classes of holders such as dealers in securities or currencies,
holders whose functional currency is not the U.S. dollar, holders of ten percent or more of our shares (taking into account shares
held directly or through depositary arrangements), tax-exempt organizations, financial institutions, holders liable for the alternative
minimum tax, securities traders who elect to account for their investment in common shares or ADSs on a mark-to-market basis, partnerships
or other pass-through entities and investors therein, insurance companies, U.S. expatriates, persons that purchase or sell common
shares or ADSs as part of a wash sale for tax purposes, and persons holding common shares or ADSs in a hedging transaction or as
part of a straddle, conversion or other integrated transaction for U.S. federal income tax purposes. The statements regarding U.S.
tax law set forth in this summary is based on the Internal Revenue Code of 1986, as amended, which we call the “Code,”
its legislative history, existing and proposed U.S. Treasury regulations, published rulings and court decisions all as in force
on the date of this annual report, and changes to such law subsequent to the date of this annual report may affect the tax consequences
described herein (possibly with retroactive effect). This summary is also based in part on the representations of the Depositary
and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with
its terms.



Each holder is encouraged to consult such
holder’s tax advisor concerning the overall tax consequences to it, including the consequences under laws other than U.S.
federal income tax laws, of an investment in common shares or ADSs.



In this discussion, references to a “U.S.
Holder” are to a beneficial owner of a common share or an ADS that is for U.S. federal income tax purposes (1) an individual
citizen or resident of the United States, (2) a corporation, or any other entity taxable as a corporation, organized under the
laws of the United States, any state thereof or the District of Columbia, (3) an estate whose income is subject to U.S. federal
income tax regardless of its source, or (4) a trust if (i) a United States court can exercise primary supervision over the trust’s
administration and one or more United States persons are authorized to control all substantial decisions of the trust or (ii) it
has in effect a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person.



127







For U.S. federal income tax purposes, holders
of ADSs will generally be treated as owners of the common shares represented by such ADSs.



This discussion does not address any aspect
of U.S. federal taxation other than U.S. federal income taxation (such as the estate and gift tax or the Medicare tax on net investment
income). Holders of common shares or ADSs should consult their own tax advisor regarding the U.S. federal, state and local and
other tax consequences of owning and disposing of common shares and ADSs in their particular circumstances.



Distributions on Common Shares or
ADSs



A distribution to U.S. Holders made by
us of cash or property with respect to common shares or ADSs generally will be treated as a dividend for U.S. federal income tax
purposes to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax
principles). Distributions in excess of our current or accumulated earnings and profits, as determined for U.S. federal income
tax purposes, will be treated first as a tax-free return of capital reducing such U.S. Holder’s adjusted tax basis in the
common shares or ADSs. Any distribution in excess of such adjusted tax basis will be treated as capital gain and will be either
long-term or short-term capital gain depending upon whether the U.S. Holder held the common shares or ADSs for more than one year.
Distributions of additional common shares or ADSs to U.S. Holders that are part of a pro rata distribution to all of our shareholders
generally will not be subject to U.S. federal income tax. We do not maintain calculations of our earnings and profits under U.S.
federal income tax principles, and, therefore, except as described in the previous sentence, U.S. Holders should expect that any
distributions generally will be reported as dividends for U.S. federal income tax purposes. As used below, the term “dividend”
means a distribution that constitutes a dividend for U.S. federal income tax purposes.



The amount of any distribution will include
the amount of any Colombian tax withheld on the amount distributed, and the amount of a distribution paid in Colombian Pesos will
be measured by reference to the exchange rate for converting Colombian Pesos into U.S. dollars in effect on the date the distribution
is received by the Depositary (or by a U.S. Holder in the case of a holder of common shares) regardless of whether the payment
is in fact converted into U.S. dollars. If the Depositary (or U.S. Holder in the case of a holder of common shares) does not convert
such Colombian Pesos into U.S. dollars on the date it receives them, generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date the dividend payment is included in income to the date the payment is converted into
U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified
dividend income (as discussed below). The gain or loss generally will be income or loss from sources within the United States for
foreign tax credit limitation purposes. Dividends paid by us will not be eligible for the dividends received deduction allowed
to corporations under the Code.



If you are a non-corporate U.S. Holder,
dividends that constitute qualified dividend income will be taxable to you at the preferential rates applicable to long-term capital
gains provided that you meet certain holding requirements. Dividends paid on the ADSs will be treated as qualified dividend income
if (1) the ADSs are readily tradable on an established securities market in the United States and (2) we were not, in the year
prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment
company (PFIC). The ADSs are listed on the New York Stock Exchange, and will qualify as readily tradable on an established securities
market in the United States so long as they are so listed. Based on our audited financial statements and relevant market and shareholder
data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2016 taxable year.
In addition, based on our audited financial statements and our current expectations regarding the value and nature of our assets,
the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for the 2017
taxable year. However, this conclusion is a factual determination that is made annually and thus may be subject to change. Based
on existing guidance, it is not clear whether dividends received with respect to the common shares will be treated as qualified
dividends. In addition, the U.S. Treasury has announced its intention to promulgate rules pursuant to which holders of ADSs or
common shares and intermediaries through whom such securities are held will be permitted to rely on certifications from issuers
to treat dividends as qualified for tax reporting purposes. Because such procedures have not yet been issued, it is not clear whether
we will be able to comply with them. Holders of ADSs and common shares should consult their own tax advisers regarding the availability
of the reduced dividend tax rate in the light of the considerations discussed above and their own particular circumstances.





128







A U.S. Holder will be entitled, subject
to a number of complex limitations and conditions, to claim a U.S. foreign tax credit in respect of any Colombian income taxes
withheld on dividends received on common shares or ADSs. U.S. Holders who do not elect to claim a credit for any foreign income
taxes paid during the taxable year may instead claim a deduction in respect of such Colombian income taxes provided the U.S. Holder
elects to deduct (rather than credit) all foreign income taxes for that year. Dividends received with respect to the common shares
or ADSs will be treated as foreign source income, subject to various classifications and other limitations. For the purposes of
the U.S. foreign tax credit limitations, the dividends paid with respect to our common shares or ADSs will generally constitute
“passive category income” for most U.S. Holders. The rules relating to computing foreign tax credits or deducting foreign
income taxes are extremely complex, and U.S. Holders are urged to consult their own independent tax advisers regarding the availability
of foreign tax credits with respect to any Colombian income taxes withheld.



Sale, Exchange or Other Taxable
Dispositions of Common Shares or ADSs



A U.S. Holder generally will recognize
capital gain or loss upon the sale, exchange or other taxable disposition of common shares or ADSs in an amount equal to the difference
between the U.S. dollar value of the amount realized on the sale, exchange or other taxable disposition of the common shares or
ADSs and the U.S. Holder’s adjusted tax basis, determined in U.S. dollars, in the common shares or ADSs. Any gain or loss
will be long-term capital gain or loss if the common shares or ADSs have been held for more than one year. 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.



If you are a U.S. Holder of common shares
or ADSs, the initial tax basis of your common shares or ADSs will be the U.S. dollar value of the Colombian Peso-denominated purchase
price determined on the date of purchase. If the common shares or ADSs are treated as traded on an “established securities
market,” a cash basis U.S. Holder, or, if it elects, an accrual basis U.S. Holder, will determine the dollar value of the
cost of such common shares or ADSs by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.
Such an election by an accrual basis U.S. Holder must be applied consistently from year to year and cannot be revoked without the
consent of the Internal Revenue Service (“IRS”). If you convert U.S. dollars to Colombian Pesos and immediately use
that currency to purchase common shares or ADSs, such conversion generally will not result in taxable gain or loss to you.



With respect to the sale or exchange of
common shares or ADSs, the amount realized generally will be the U.S. dollar value of the payment received determined on (1) the
date of receipt of payment in the case of a cash basis U.S. Holder and (2) the date of disposition in the case of an accrual basis
U.S. Holder. If the common shares or ADSs are treated as traded on an “established securities market,” a cash basis
taxpayer, or, if it elects, an accrual basis taxpayer, will determine the U.S. dollar value of the amount realized by translating
the amount received at the spot rate of exchange on the settlement date of the sale.



Deposits and withdrawals of common shares
in exchange for ADSs, and ADSs for common shares generally will not result in the realization of gain or loss for U.S. federal
income tax purposes.



Backup Withholding and Information
Reporting



In general, dividends on common shares
or ADSs, and payments of the proceeds of a sale, exchange or other taxable disposition of common shares or ADSs, paid within the
United States, by a U.S. payor through certain U.S.-related financial intermediaries to a U.S. Holder are subject to information
reporting and may be subject to backup withholding at a current rate of 28% unless the holder (1) establishes that it is a corporation
or other exempt recipient or (2) with respect to backup withholding, provides an accurate taxpayer identification number and certifies
that it is a U.S. person and that no loss of exemption from backup withholding has occurred.







129







Backup withholding is not an additional
tax. The amount of any backup withholding tax from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s
U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. A U.S. Holder generally
may obtain a refund of any amounts withheld under the backup withholding rules that exceed its U.S. federal income tax liability
by timely filing a refund claim with the IRS.



U.S. Tax Considerations for Non-U.S.
Holders



A holder or beneficial owner of common
shares or ADSs that is not a U.S. Holder for U.S. federal income tax purposes (a “non-U.S. Holder”) generally will
not be subject to U.S. federal income or withholding tax on dividends received on common shares or ADSs, unless the dividends are
“effectively connected” with the non-U.S. Holder’s conduct of a trade or business within the United States. In
such a case a non-U.S. Holder generally will be taxed in the same manner as a U.S. Holder. In the case of “effectively connected”
dividends received by a corporate non-U.S. Holder, the corporate non-U.S. Holder may, under certain circumstances, be subject to
an additional “branch profits tax” at a 30% rate.



A non-U.S. Holder of common shares or ADSs
will not be subject to U.S. federal income or withholding tax on gain realized on the sale of common shares or ADSs, unless (i)
the gain is “effectively connected” with the non-U.S. Holder’s conduct of a trade or business in the United States,
or (ii) in the case of gain realized by an individual non-U.S. Holder, the non-U.S. Holder is present in the United States for
183 days or more in the taxable year of the sale and certain other conditions are met. In the case of “effectively connected”
gains realized by a corporate non-U.S. Holder, the corporate non-U.S. Holder may, under certain circumstances, be subject to an
additional “branch profits tax” at a 30% rate.



Although non-U.S. Holders generally are
exempt from backup withholding and information reporting requirements, a non-U.S. Holder may be required to comply with certification
and identification procedures in order to establish its exemption from information reporting and backup withholding.



| | 6.6 | Exchange Controls and Limitations
| | --- | ---------------------------------



Payments in foreign currency with respect
to certain foreign exchange transactions including international investments between Colombian residents and non-Colombian residents
must be conducted through the foreign exchange market. Therefore, any foreign currency income or expense under the ADRs must be
completed through the appropriate channels of the foreign exchange market. Transactions conducted through the foreign exchange
market are made at market rates freely negotiated with authorized foreign exchange intermediaries (local banks, financial corporations,
administrators and others). As of September 25, 1999 the Colombian foreign exchange regime is structured under the system of free
flotation of the exchange rate whereby market forces determine the level of exchange rate from time to time.



Foreign portfolio investments must be made
through authorized foreign exchange investment management companies. Only brokerage firms, trust companies and investment management
companies, subject to the inspection and supervision of the Superintendence of Finance, are allowed to make investments in the
local Colombian market on behalf of foreign investors. Such brokerage firms, trust companies and investment management companies
also act as the foreign investors’ local representatives for tax and foreign exchange purposes.



Colombian law provides that the Colombian
Central Bank may intervene in the foreign exchange market at its own discretion at any time (i.e. it may limit the remittance of
dividends whenever the international reserves fall below an amount equal to three months of imports). Additionally, from time to
time, the Colombian government introduces amendments to the International Investment Statute. Hence, we cannot assure you that
the Colombian Central Bank will not intervene in the future imposing restrictions to the free convertibility system currently applicable
in Colombia. See the section Risk Review—Risk Factors—Risks Related to Colombia’s Political and Regional
Environment.



130







Registration of Foreign Investment
Represented in Underlying Shares



Colombia’s International Investment
Statute and the regulations issued by the Colombian Central Bank, which have been amended from time to time through related decrees
and regulations, govern the manner in which non-Colombian resident entities and individuals can invest in Colombia and participate
in the Colombian securities markets. Among other requirements, the International Investment Statute and Colombian Central Bank
regulations mandate registration of foreign investment transactions with the Colombian Central Bank and specify procedures to authorize
and administer such foreign investment transactions. Additionally, pertinent information related to foreign investment transactions
must be updated on a regular basis (yearly or monthly, depending on the type of information).



Under the International Investment Statute
and Colombian Central Bank regulations, the failure of a foreign investor to report or register with the Colombian Central Bank
foreign exchange transactions relating to investments in Colombia on a timely basis may (i) prevent the investor from obtaining
remittance rights, (ii) constitute an exchange control infraction, and (iii) result in financial sanctions.



Notwithstanding the regulations described
above, foreign investors who acquire ADRs are not required to directly register this investment with Colombian authorities. Holders
of ADRs will benefit from the registration to be obtained by the local custodian for our common shares underlying the ADRs in Colombia.
Such registration allows the custodian to convert dividends and other distributions with respect to the common shares into foreign
currency and remit the proceeds abroad. If investors in ADRs choose to surrender their ADRs and withdraw common shares, they must
retain an administrator, who will act as a local representative for the investments, and register their investments in common shares
as a portfolio investment through said local representative. The local representative is the brokerage firm, trust company or investment
management company that acts on behalf of the holders of the ADRs in Colombia, and the request for registration is made by them.



Colombian residents who acquire ADRs and
either receive profits from this investment, surrender their ADRs or liquidate their investment in ADRs must register these operations
with the Colombian authorities and comply with applicable regulations through its Colombian brokerage firm.



In obtaining its own foreign investment
registration, an investor who surrenders its ADRs and sells common shares may incur expenses and/or suffer delays in the application
process. Investors would only be allowed to transfer dividends abroad or transfer funds received as distributions relating to our
common shares after their foreign investment registration procedure with the Colombian Central Bank has been completed. In addition,
the depositary’s foreign investment registration may also be adversely affected by future legislative changes, but its rights
to transfer dividends abroad or profits arising from distributions relating to our common shares must be maintained according to
Colombian law and foreign investment treaties entered into by Colombia in force at the time of the registration of the investment,
except when Colombia’s international reserves fall below an amount equivalent to three months’ worth of imports. Prospective
purchasers of common shares or ADSs should consult their own foreign exchange advisors.



| | 6.7 | Exchange Rates
| | --- | --------------



On May 26, 2017, the Representative
Market Exchange Rate was COP$2,911.66 per US$1.00. The Federal Reserve Bank of New York does not report a noon-buying rate for
Colombian Pesos. The Superintendencia Financiera, or Superintendence of Finance, calculates the Representative Market Exchange
Rate based on the weighted averages of the buy and 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 Superintendence of Finance also calculates the
Representative Market Exchange Rate for each month for purposes of preparing financial statements and converting amounts in foreign
currency to Colombian Pesos.







131







The following table sets forth the high,
low, average and period-end exchange rate for Colombian Peso/U.S. dollar Representative Market Exchange Rate for each of the last
five years and for the last six months.



Table 57 – Colombian Peso/U.S.
dollar Representative Market Exchange Rate





|                                |  | Exchange Rates |         
|------------------------------- |  | -------------- | --------
|                                |  | High           |         
|2012                            |  |                | 1,942.70
|2013                            |  |                | 1,952.11
|2014                            |  |                | 2,446.35
|2015                            |  |                | 3,356.00
|2016                            |  |                | 3,434.89
|Most recent six months          |  |                |         
|November 2016                   |  |                | 3,187.97
|December 2016                   |  |                | 3,085.60
|January 2017                    |  |                | 3,000.71
|February 2017                   |  |                | 2,921.90
|March 2017                      |  |                | 3,004.43
|April 2017                      |  |                | 2,944.31
|May 2017 (through May 26, 2017) |  |                | 2,967.44



Source:
Superintendence of Finance for historical data. Banco de la República, or the Colombian Central Bank, for averages.



| | 6.8 | Major Shareholders
| | --- | ------------------



Major Shareholders



The following table sets forth the names
of our major shareholders, and the number of shares and the percentage of outstanding shares owned by them at March 31, 2017:



Table 58 – Major Shareholders



|                                                  |  | At March 31, 2017 |               
|------------------------------------------------- |  | ----------------- | --------------
|Shareholders                                      |  | Number of shares  |               
|Nation(1) – Ministry of Finance and Public Credit |  |                   | 36,384,788,817
|Public float                                      |  |                   | 4,731,905,873 
|Total                                             |  |                   | 41,116,694,690










| | (1) | Includes 2,000 shares owned by other                                          state
                                                            entities.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



All our common shares have identical voting
rights.



As of March 31, 2017, 1.8% of our common
shares were held of record in the form of American Depository Shares. As of March 31, 2017, we had 41 registered holders and as
of February 23, 2017 we had 11,970 beneficiaries of common shares, or ADSs representing common shares, in the United States.



Changes in the Capital of the Company



There are no conditions in our bylaws governing
changes in our capital stock that are more stringent than those required under Colombian law, with the exception that the Nation
must hold a minimum of 80% of our capital stock at all times.



| | 6.9 | Enforcement of Civil Liabilities
| | --- | --------------------------------



We are a Colombian company. Most of our
Directors and executive officers and some of the experts named in this annual report reside outside the United States. All or a
substantial portion of our assets and the assets of these persons are located outside of the United States. As a result, it may
not be possible for you to affect service of process within the United States upon us or these persons who are residents in Colombia
or to enforce against us or these persons who are residents in Colombiajudgments in U.S. courts obtained in such courts
predicated upon the civil liability provisions of the U.S. federal securities laws. Colombian courts will enforce a U.S. judgment
predicated on the U.S. securities laws through a procedural system known under Colombian Law as “exequatur.” The Colombian
Supreme Court will enforce a foreign judgment, without reconsideration of the merits only if the judgment satisfies the requirements
set forth in Articles 605 through 607 of Law 1564 of 2012 (Código General del Proceso) which entered into force on
January 1, 2016, pursuant to AcuerdoNo. PSAA15-10392, of October 1, 2015, issued by the Colombian Superior Council of the
Judiciary (Consejo Superior de la Judicatura),as follows:



132







| | · | A treaty 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, there is reciprocity in the recognition of
foreign judgments between the courts of the relevant jurisdiction and the courts of Colombia;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 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;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | · | The foreign judgment does not contravene or conflict with Colombian laws relating to public order
other than those governing judicial procedures;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The foreign judgment, in accordance with the laws of the country where it was rendered, is final
and is not subject to appeal;
| | - | ------------------------------------------------------------------------------------------------------------------------------



| | · | 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;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The foreign judgment does not refer to any matter upon which Colombian courts have exclusive jurisdiction;
| | - | ----------------------------------------------------------------------------------------------------------



| | · | No proceeding is pending in Colombia with respect to the same cause of action, and no final judgment
has been awarded in any proceeding in Colombia on the same subject matter and between the same parties;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In the proceeding commenced in the foreign court that issued the judgment, the defendant is served
in accordance with the laws of such jurisdiction and in a manner reasonably designated to give the defendant an opportunity to
defend against the action; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The legal requirements pertaining to the exequatur proceedings have been observed;
| | - | ----------------------------------------------------------------------------------



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.
The Colombian Supreme Court 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 Colombian courts on a case-by-case basis.



Proceedings for enforcement of a money
judgment by attachment or execution against any assets or property located in Colombia are within the exclusive jurisdiction of
Colombian courts and such proceedings are conducted in Spanish. All parties affected by a foreign judgment in exequatur proceedings
must be summoned to the exequatur proceedings in accordance with the rules that apply to the Colombian courts. In the course of
such proceedings, both the plaintiff and the defendant are afforded the opportunity to request that evidence be collected in connection
with the requirements listed above. In addition, before the judgment is rendered, each party may file final allegations in support
of such party’s position regarding the above-mentioned requirements.



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.



133







| | 7. | Corporate Governance
| | -- | --------------------



Since 2004, Ecopetrol S.A. has voluntarily
adopted transparency, governance and control practices to facilitate corporate governance in order to generate confidence among
stakeholders and ensure the sustainability of its business.



The corporate governance practices at Ecopetrol
S.A.:



| | · | Promote and guarantee all stakeholders transparency, objectivity and competiveness.
| | - | -----------------------------------------------------------------------------------



| | · | Add value to the company and attract investors.
| | - | -----------------------------------------------



| | · | Protect shareholders, investors and stakeholders rights.
| | - | --------------------------------------------------------



| | · | Encourage financial markets confidence.
| | - | ---------------------------------------



| | · | Accomplish the highest corporate governance standards.
| | - | ------------------------------------------------------



Statement of the Nation
as Majority Shareholder



Ecopetrol’s majority shareholder
(the Nation, represented by the Ministry of Finance and Public Credit), is unilaterally committed to protect the interests of the
minority shareholders in the following topics:



| | · | Composition of Board of Directors: including in its list of candidates a Representative
for hydrocarbon producing departments operated by Ecopetrol and a Representative for the minority shareholders, who will be chosen
by the 10 shareholders with the largest stock participations.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



According to corporate governance
practices recommended by the OECD, organization to which Colombia is in the process of access, the National Government begun to
implement the practice of reducing the participation of Directors with a ministerial level in Ecopetrol’s Board of Directors.
Thus, in 2017 in the ordinary Shareholders’ Assembly, the National Government nominated only one (1) non-independent Director
with a ministerial level and in 2018 no director of ministerial rank will be nominated.



| | · | Dividend policy: guaranteeing the right of each shareholder to receive his pro rata dividends
in accordance with Colombian law.
| | - | -------------------------------------------------------------------------------------------------------------------------------



| | · | Issues not included in the agenda of extraordinary meetings of the Shareholders Assembly:
permitting a vote on those initiatives submitted by one or more shareholders representing at least 2% of the subscribed shares
of the company.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Asset disposal: ensuring that any asset disposal of an amount equal or higher than 15% of
the stock exchange capitalization of Ecopetrol is discussed and decided by the Shareholders’ General Assembly and that the
Nation will only vote affirmatively if the vote of minority shareholders is equal to or exceeds 2% of the shares subscribed by
shareholders other than the Nation.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7.1 | Bylaws
| | --- | ------



The Bylaws of Ecopetrol S.A. are contained
in Public Deed No. 5314 of December 14, 2007, issued by the Second Notary of Bogotá; amended by Public Deed No. 560 of May
23, 2011, issued by the Notary Forty- Six of Bogotá, Deed No. 666 of May 7, 2013, issued by the Notary Sixty-Five of Bogotá,
and Deed No. 1049 of May 19, 2015, issued by the Notary Second of Bogotá.



134







This summary does not purport to be complete
and is qualified by reference to our bylaws, which are filed as an exhibit to this annual report. For a description of the provisions
of our bylaws relating to our Board of Directors and its committees, see the sections Corporate Governance—Board of
Directors—Board Practices and —Board Committees.



General Meeting of Shareholders



Shareholders’ meetings may be ordinary
or extraordinary. Ordinary meetings will take place in our legal domicile located in Bogota, Colombia, within the first three months
following the end of each fiscal year, on the day and at the time set forth in the notice for the general shareholders’ meeting.
The call for the general shareholders’ meeting is published on the Ecopetrol S.A. website and in a newspaper of wide circulation
30 calendar days prior to the date on which the meeting will take place and on the Sunday previous to the meeting, must be published
at Ecopetrol S.A.’s website www.ecopetrol.com.co. The call for the general shareholders’ meeting is also sent electronically
to shareholders.



In the ordinary general shareholders’
meeting, our Board of Directors and the external auditor are appointed and our annual financial statements, profit distribution,
audit and management reports, including our corporate governance report and sustainability report, and any other matter provided
under applicable law or our corporate bylaws are approved.



Extraordinary meetings of shareholders
may be called by our Board of Directors, by our president or chief executive officer, by our external auditor, or by shareholders
holding at least 5% of the shares outstanding, or when unforeseen or urgent needs of the Company require it. Calls to extraordinary
meetings should be made at least 15 calendar days prior to the date of the meeting, with the exception of the case where the Law
requires a greater time between the summons and the meeting. Such a call is published on the Ecopetrol S.A. website and in a newspaper
of wide circulation. The meeting notice must specify the agenda for the meeting.



The required quorum for both ordinary and
extraordinary meetings is a plural number of shareholders representing 50% plus one of the subscribed shares entitled to vote and
decisions are approved with a majority of the members present. This quorum is exempted in the case of “second-call meetings,”
which may take place when a meeting fails to obtain the required quorum and is called within a period between 10 business days
and 30 business days from the first date, in which case decisions may be adopted by a majority of the shares present regardless
of the number represented.



Decisions made at ordinary and extraordinary
shareholders’ meeting must be approved by a plural number of shareholders representing the majority of the shares present.
Colombian law requires supermajorities in the following cases:



| | · | The vote of at least 70% of the shares present and entitled to vote at the ordinary shareholders’
meeting is required to approve the issuance of stock not subject to preemptive rights;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The vote of at least 78% of the shares represented entitled to vote is required to approve the
distribution of the annual net profits. In the absence of this special majority, at least 50% of the net profits must be distributed.
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;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The vote of at least 80% of the shares represented is required to approve the payment of dividends
in shares; and
| | - | -----------------------------------------------------------------------------------------------------------------



| | · | The vote of 100% of the outstanding and issued shares is required to replace a vacancy on the Board
of Directors without applying the electoral quotient system.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



Shareholders may be represented by proxies
provided that the proxy: (1) is in writing (faxes and electronic documents are valid), (2) specifies the name of the representative,
(3) specifies the date or time of the meeting for which the proxy is given and (4) includes other information specified by the
applicable law. Proxies granted abroad do not require legalization or an apostille.



135







During our ordinary annual shareholders’
meeting, our employees and Directors are only allowed to represent their own shares, unless they act as legal representatives.



Preference Rights and Restrictions Attaching to Our Shares



We have only one class of stock without
special rights or restrictions (ordinary shares). Our shareholders do not have any type of preemptive rights.



Under Commercial Colombian law, our shareholders
have the following economic privileges and voting rights:



| | · | To participate and vote on the decisions of the general shareholders’ meeting;
| | - | ------------------------------------------------------------------------------



| | · | To receive dividends based on the financial performance of the Company in proportion to their share
ownership;
| | - | --------------------------------------------------------------------------------------------------------------



| | · | To transfer and sell shares according to our bylaws and Colombian law;
| | - | ----------------------------------------------------------------------



| | · | To inspect corporate books and records 15 business days prior to the ordinary shareholders’
meeting where the year-end financial statements are to be approved;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Upon liquidation, to receive a proportional amount of the corporate assets after the payment of
external liabilities; and
| | - | -------------------------------------------------------------------------------------------------------------------------



| | · | To sell the shares, known as derecho de retiro, if a corporate restructuring affects the
economic or voting rights of the shareholders in the terms and conditions established under Colombian law.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our bylaws and corporate governance code
provide additional rights to our minority shareholders. These rights include:



| | · | Sale of Assets. For a ten-year period counted from the date of subscription of the declaration
of the Nation dated July 26, 2007 or until the Nation loses its status as majority shareholder, the Nation guarantees that
any sale of 15% or more of our assets requires the approval of the general shareholders’ meeting and that the Nation would
only be allowed to vote its shares in favor of the proposal if 2% or more of our minority shareholders accept the proposal.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Candidate List. Pursuant to our bylaws and Law 1118 of 2006, the Nation will include in
its candidate list for election of members of the Board of Directors one member selected by the departments that produce hydrocarbons.
In addition, pursuant to the declaration of the Nation dated July 26, 2007, the Nation will include in its candidate list
for election of members of the Board of Directors one member selected by the ten largest minority shareholders. The minority shareholders’
right to select a candidate loses its effect when minority shareholders, according to their share participation, name a member
to our Board of Directors.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Extraordinary Meetings. Our bylaws and corporate governance code provide that the entity
exercising permanent control over Ecopetrol must instruct the Company’s CEO or External Auditor to call an extraordinary
meeting of the Company’s shareholders when so requested by a plurality of shareholders holding at least 5% of the total number
of outstanding shares. Such requests shall be made in writing and must clearly indicate the purpose of the meeting.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Investor Attention Office. Ecopetrol has an investor attention office, a specialized unit
responsible for receiving complaints from our shareholders. Pursuant to our bylaws, shareholders holding at least 5% of the total
number of shares outstanding may request that the investor attention office conduct a special audit of the following documents:
the income statement; the proposal for the distribution of profits; the report of the Board of Directors as to the economic and
financial status of our Company; the report from our general counsel as to the legal status of our Company; and the report from
the independent auditors. Special audits cannot be made of documents that contain scientific, technological or statistical information
of our Company, or agreement that gives us competitive and economic advantages over our competitors, or in respect of any document
related to intellectual property. Shareholders also have the right to propose good corporate governance recommendations to the
office for the protection of investors.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



136







| | · | Others. Pursuant to our bylaws, shareholders holding at least 5% of the total number of
shares outstanding may propose recommendations to our Board of Directors pertaining to the management of our Company. Any shareholder
may file a written petition to our Board of Directors to investigate corporate governance violations that the shareholder believes
to have been committed.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Amendments to Rights and Restrictions to Shares



We have only one class of stock and it
has no special rights or restrictions (ordinary shares). Our shareholders do not have any type of preemptive rights. The rights
given to our shareholders by law are described in our bylaws and may only be modified through an amendment to the law.



The additional rights given to our minority
shareholders in our bylaws and corporate governance code may only be modified through an amendment of those internal documents.



Limitations on the Rights to Hold Securities



There are no limitations in our bylaws
or Colombian law on the rights of Colombian residents or foreign investors to own the shares of our Company, or on the right to
hold or exercise voting rights with respect to those shares, except in cases of legal representation and except that the Nation
must hold a minimum of 80% of our capital stock at all times.



Restrictions on Change of Control Mergers, Acquisitions
or Corporate Restructuring of the Company



Under Colombian law and our bylaws, the
general shareholders’ meeting has full authority to approve any corporate restructuring, including any mergers, acquisitions
or spin-offs. Corporate restructurings are also subject to the requirement that the Nation must hold a minimum of 80% of our common
stock at all times. So long as Law 1118 of 2006 is in effect, there cannot be any restructuring that result in a change of control
of our Company.



Ownership Threshold Requiring Public Disclosure



The Corporate Governance Code, Title
III, Chapter 1, Section 5, states: Identification of Major Shareholders. The shareholding composition of the Company,
indicating at least the twenty (20) people with the greatest number of shares, is disclosed on Ecopetrol’s website at www.ecopetrol.com.co.
Colombian securities regulations set forth the obligation to disclose any material event or hecho relevante. Any
transfer of shares equal or greater than 5% of our capital stock, or any legal entity or individual acquiring a percentage of
shares that would make him the beneficial owner of 5% or more of our capital stock, is a material event, and therefore, must
be disclosed to the Superintendence of Finance. The regulation includes other criteria in order to identify when to report a
material event other than the situations described in the previous sentence.



External Auditor



Pursuant to our bylaws, our external auditor
shall not be appointed for more than five consecutive one-year terms by us. However, an external auditor may be hired again after
two terms have passed since the conclusion of its last term of appointment. At the ordinary general shareholders’ meeting
on March 31, 2017, the shareholders appointed Ernst & Young as external auditor of Ecopetrol for the fiscal year 2017.



| | 7.2 | Code of Ethics
| | --- | --------------



We have adopted a code of ethics, which
complies with applicable U.S. and Colombian law.  Our code of ethics applies to our Board of Directors, our Chief Executive
Officer, our Chief Financial Officer, principal accounting officer, persons performing similar functions and in general to all
of the other employees of the company and its affiliates.



137







All of our agreements with suppliers or
third parties include a provision relating to compliance with applicable anti-bribery and anti-corruption regulations. These agreements
also require our suppliers and third parties to accept our Code of Ethics and our compliance manuals.



Our code of ethics is available on our
website at http://www.ecopetrol.com.co/especiales/codigoEtica_/index.html.



If we amend the provisions of our code
of ethics or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address.



| | 7.3 | Board
                                         of Directors
| | --- | -----------------------------------------------------------



The information below sets forth the names
and business experience of each of our current Directors elected at the shareholders’ ordinary meeting held on March 31,
2017 for terms of one year beginning on that date, as of the date hereof:



Minister of Finance and Public Credit,
Mauricio Cárdenas Santamaría (54)is the Minister of Finance and Public Credit since September, 2012. He was
the Minister of Mines and Energy of Colombia from September 26, 2011 to September 3, 2012. He has served as Senior Fellow and Director
at the Latin America Initiative of the Brookings Institution in Washington D.C. Previously, Mr. Cárdenas served as Executive
Director of Fundación para la Educación Superior y el Desarrollo (FEDESARROLLO), CEO of Empresa de Energía
Eléctrica de Bogotá, Minister of Economic Development, Minister of Transport, and Director of the National Planning
Agency of Colombia. Mr. Cárdenas holds a B.A. and master degree in economics from the University Andes and a Ph.D. in economics
from the University of Berkeley, California. In 2001, Mr. Cárdenas was a visiting scholar at Harvard University’s
Center for International Development. Mr. Cárdenas has also served as a member of the board of directors of various organizations,
including the Latin American and Caribbean Economic Association (LACEA), University Andes and the Colombia Stock Exchange (BVC).
Currently he is a Director of Banco de la República. Mr. Cárdenas has served as a Director of Ecopetrol ́s Board
since March 27, 2008. Currently Mr. Cárdenas is a non-independent Director of Ecopetrol ́s Board.



Mauricio Cabera Galvis
(65) currently serves as Director of the firm Cabrera & Bedoya Investment Bankers. He has been President of the FES
Foundation and Banco de Occidente. He has served as Director of INCORBANK S.A. and as Public Credit Director in the Finance
and Public Credit Ministry of Colombia. He has been Technical Vice President of the Banking Association of Colombia and Head
of the Global Programming Unit of the National Planning Department. He was Dean of the Faculty of Economics of the
Universidad Externado de Colombia and an economist in the Western Hemisphere Department of the International Monetary Fund.
He holds a degree in Philosophy from the Universidad Javeriana and holds a Master’s Degree in Economics from
Universidad de los Andes. He attended the Ph.D. program at the London School of Economics. He is a Director of Industrias de
Licores del Valle, Clínica DIME, ASTORGA and Fabricato. Mr. Cabrera has served as a Director of Ecopetrol’s
Board since March 31, 2017. Currently Mr. Cabrera is an independent Director of Ecopetrol ́s Board.



Yesid Reyes Alvarado (58)has
been a professor at the Universities Externado, Libre, Santo Tomás, Autónoma of Madrid and Los Andes. He has acted
as Associate Judge in the Tribunal Superior de Bogotá, Consejo Superior de la Judicatura, Supreme Court and Constitutional
Court. He has also been a columnist for the newspaper El Espectador. He served as Minister of Justice and Law of Colombia during
august 2014 to April 2016. He is currently Director of the Center for Research in Philosophy and Law at the University Externado.
Mr. Reyes holds a degree in law and a specialization and Master in Criminal, Criminological and Criminalistics Sciences in the
same university. He holds a PhD in Law from the University Autónoma of Madrid and had a research fellowship in Alexander
von Humboldt Stiftug at the University of Bonn (Germany). Mr. Reyes has served as a Director of Ecopetrol’s Board since September
14, 2016. Currently Mr. Reyes is an independent Director of Ecopetrol’s Board.



138







Ana Milena López Rocha (36)
serves as the Director of Public Credit and National Treasury at the Colombian Ministry of Finance since April 2015. She was a
Partner at asset manager Newfoundland Capital Management and an external advisor to Fiduciaria Alianza and Alianza Valores. She
held leadership positions at Sociedades Bolivar S.A. and J.P. Morgan Chase Bank. Ms. López holds a B.A. in Economics from
Harvard University and a Master ́s Degree in Business from Columbia Business School. She is a member of the Board of Directors
of Interconexión Eléctrica S.A. E.S.P. - (ISA) and Financiera de Desarrollo Nacional. Ms. López has served
as a Director of Ecopetrol’s Board since September 14, 2016. Currently Ms. López is a non-independent Director of
Ecopetrol ́s Board.



Jaime Ardila Gómez (61)was president of General Motors for South America and has held various positions within General Motors. Among these, he acted
as President for Brazil and Mercosur; CFO for Latin America, Africa and the Middle East; CEO and Managing Director in Argentina;
CEO and Managing Director in COLMOTORES, CEO and Managing Director in Ecuador; Omnibus BB, CFO in Chile; and Treasurer in Mexico,
among others. He also served as Managing Director in Colombian Operations for N.M Rothschild and Sons and Secretary General of
the Ministry of Industry and Trade in Colombia. Mr. Ardila holds a B.A. in economics from the University of Bogota Jorge Tadeo
Lozano and a master degree in economics from the London School of Economics. He is a member of the Board of Directors of Goldman
Sachs BDC, Accenture, Council of the Americas and the Chamber of Commerce of Brazil. Mr. Ardila has served as a Director of Ecopetrol’s
Board since March 31, 2016. Currently Mr. Ardila is an independent Director of Ecopetrol ́s Board.



Carlos Alfredo Cure Cure (72)was Ambassador of Colombia to Venezuela. He was CEO of Bavaria S.A., the largest brewery in Colombia. He also served as an
advisor to the Board of the Olympic Group S.A. and member of the Board of Avianca S.A. (Colombia’s national airline).He acted
as deputy financial manager of Cementos del Caribe, CEO of Cementos Toluviejo and CEO of Astilleros Unión Industrial. Mr.
Cure holds a degree in Civil Engineering from the National University of Medellin. Mr. Cure has served as a Director of Ecopetrol ́s
Board since September 5, 2015. Currently Mr. Cure is an independent Director of Ecopetrol ́s Board.



Joaquín Moreno Uribe (68)earned a degree in civil engineering from Universidad Industrial de Santander and completed a The Advanced Management Program
(AMP) at The Harvard University Business School. Mr. Moreno worked initially as Director for Constructions and Engineering of Urbanas,
in Bucaramanga, Colombia. He then joined the Royal Dutch/Shell Group of companies for more than 33 years. His career with Shell
included various positions at technical, managerial and leadership levels, in different sectors of the Oil & Gas Industries
(Upstream and Downstream), Chemicals, Metals and Coal. He worked in different countries in America and Europe, including several
appointments at regional, global and corporate levels at the Headquarters of the RDS Group in London and The Hague. Mr. Moreno
has also served as Country Chairman and President for Shell in Mexico, Colombia and Venezuela, as well as Regional CEO for the
Northern Latin American Region. On his return to Colombia, he was appointed by the Presidency of the Country, as High Presidential
Commissioner –Ad Honorem- in charge of coordinating the reconstruction of the areas affected by the heavy rain season and
floods of early 2005, in the Region of Santander and Northern Santander. Mr. Moreno has been a member of the boards of directors
of various local and international companies, as well as educational and leadership institutions and initiatives. Mr. Moreno has
served as a Director of Ecopetrol ́s Board since March 27, 2008. Currently Mr. Moreno is an independent Director of Ecopetrol ́s
Board.



Horacio Ferreira Rueda (47) is an
executive leader with more than 20 years of international experience in the oil industry. His knowledge and expertise stem from
positions as CEO and President of an oilfield services company in Houston, TX to application of state of art technologies in the
oil industry. He has led and executed numerous reservoir engineering projects in the Americas, Europe, Africa, Middle East and
Far East and has conducted research in optimization of multiphase meters, underbalanced reservoir engineering, real time reservoir
and production analysis, reservoir simulation and waterflood techniques with horizontal wells. He holds a BS in Petroleum Engineering
from Universidad América, master and doctoral degrees in Petroleum Engineering from Texas A&M University and a business
graduate degree in Management of International Corporations from Texas A&M University. Mr. Ferreira has served as a Director
of Ecopetrol ́s Board, nominated by the hydrocarbon producing provinces of Colombia, since January 23, 2014. Currently Mr.
Ferreira is an independent Director of Ecopetrol ́s Board, nominated by the hydrocarbon producing provinces of Colombia.



139







Carlos Gustavo Cano Sanz (70) currently
serves as Professor in the Master of Corporate Finance at CESA. He was Director of Banco de la República from February
4, 2005 to January 31, 2017. He was Minister of Agriculture between August 7, 2002 and February 3, 2005. He served as an external
consultant to the Alternative Development and Competitiveness for the Andean Region from 1999 to 2002. He represented Colombia
at the Inter-American Institute for Cooperation on Agriculture (IICA) from 1997 to 1999. He acted as President of COMUNICAN S.A.
from 1996 to 1997, Caja Agraria from 1995 to 1996 and Sociedad de Agricultores de Colombia (SAC) from 1990 to 1991. He was General
Manager of the National Federation of Rice Growers (FEDEARROZ) and the Agroindustrial Complex of Tolima S.A. (CATSA). Mr. Cano
is an Economist from the University of Los Andes with a master degree in Economics from the University of Lancaster, England.
He has a postgraduate degree in Government, Business and International Economics from Harvard University and from the Institute
of Higher Business Management (INALDE). He has served as a member of various boards of directors, including the Comisión
Nacional de Crédito Agropecuario, FINAGRO, Banco Agrario, ICA, CORPOICA, the National Coffee Growers Committee, among others.
He doesn’t serve as a Director of joint-stock company. Mr. Cano has served as a Director of Ecopetrol’s Board, nominated
by the minority shareholders with the greatest share participation, since March 31, 2017. Currently Mr. Cano is an independent
Director of Ecopetrol ́s Board, nominated by the minority shareholders with the greatest share participation.



| | 7.3.1 | Board Practices
| | ----- | ---------------



Our Board of Directors is composed of nine
members and is responsible for, among other things, establishing our general business policies. The majority of the Board of Directors
must be independent, and must be elected pursuant to the criteria set out in paragraph two, Article 44, Law 964, 2005, and in accordance
with the procedure determined in Decree 3923, 2006, or any other provisions that regulate, amend, replace or add such regulations.
In addition, pursuant to our bylaws and in accordance the procedures described therein, our majority shareholder must include,
in its list of candidates for the last two seats in the Board of Directors, the name of one individual jointly proposed by departments
that produce hydrocarbons and one individual jointly proposed by the ten minority shareholders with the highest equity participation.
According to Colombian law, the members of the Board of Directors must be elected by the shareholders’ meeting in accordance
with a proportional representation system similar to cumulative voting (through an electoral quota voting system). The number of
votes required to fill each position is calculated by dividing the number of possible votes by the number of open board positions.
The members of the Board of Directors may be elected without an electoral quota voting system when there is unanimity. Pursuant
to our bylaws, Directors are elected for a one-year term, and the positions are filled either by person or by position. Members
of the Board may be reelected indefinitely. Currently, we have one Director appointed by his position: the Minister of Finance
and Public Credit. Our current Directors were elected at the ordinary shareholders’ meeting held on March 31, 2017. Directors
may be removed without cause at any moment by a majority of the shareholders present at a general shareholders’ meeting.



Our CEO is appointed by the Board of Directors
and has two alternates. The CEO is elected for a two-year term, may be reelected indefinitely and freely removed prior to the expiration
of his term. In accordance with our bylaws, the Board of Directors must evaluate the annual performance of the CEO and such results
must be published in Ecopetrol’s web page or in an alternative media vehicle.



The compensation of our Directors is set
exclusively by the shareholders at the general shareholders’ meeting. Directors are compensated for attending board meetings
and committee meetings. A Board meeting requires a quorum of at least five members and decisions are approved with a majority of
the Directors present. In the practice a consensus decision making operates in the Board.



Under Colombian law, a director or executive
officer must abstain from participating in any transaction that may result in a conflict of interest or that involves competition
with the company, unless authorized at a general shareholders’ meeting. The general shareholders may approve or reject the
transaction giving rise to the conflict of interest with the vote of the majority of the shares present at the shareholders’
meeting. If the director or executive officer who has the conflict is a shareholder, his or her vote must be excluded. We disclose
conflicts of interest of our employees, executive officers and Directors in our annual reports.



140







Neither our bylaws nor our corporate governance
code provide a retirement age for our Directors. Under our bylaws, there is no requirement for a person to have a minimum number
of shares to be elected as a Director. Colombian law provides that Directors willing to sell or purchase shares in our Company
need prior authorization from the entire Board of Directors. Colombian law does not impose any limitation as to the number of shares
that may be acquired by a Director.



| | 7.3.2 | Board Committees
| | ----- | ----------------



Pursuant to our bylaws, our Board of Directors
has four committees (audit and risk committee, corporate governance and sustainability committee, compensation and nomination committee
and business committee), which establish guidelines, set specific actions and evaluate and submit proposals designed to improve
performance in the areas under their supervision and control. These committees are comprised of members of the Board of Directors
who are also appointed by the members of the Board of Directors and the chairman of each of the committees must be an independent
Director. In addition to applicable regulations, the committees also have their own specific regulations that establish their purposes,
duties and responsibilities.



Table
65 – Composition of committees of the Board of Directors as of April 20, 2017



|Audit and Risk Committee                                                                                                                                                                           |  | Compensation andNomination Committee                                                                                                                                                            |  | Corporate Governanceand SustainabilityCommittee                                                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Horacio Ferreira Rueda
        Jaime Ardila Gómez
        Joaquín
        Moreno Uribe

Yesid Reyes Alvarado

Carlos Gustavo Cano Sanz                                                             |  | Minister of Finance and Public Credit Carlos Cure Cure
        Ana Milena López
Rocha
                                                             Joaquín Moreno Uribe
Mauricio Cabrera Galvis |  | Minister of Finance and Public Credit
        Horacio Ferrerira Rueda
        Carlos Cure Cure
        
        Yesid Reyes Alvarado
        Jaime Ardila Gómez
        Carlos Gustavo Cano Sanz
        Mauricio Cabrera Galvis
|Business Committee                                                                                                                                                                                 |  |                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                 
|Minister of Finance and Public Credit
        Horacio Ferreira Rueda 
Joaquín Moreno Uribe 
Carlos Cure Cure
        Jaime Ardila Gómez
        

Carlos Gustavo Cano Sanz
Mauricio Cabrera Galvis |  |                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                 



Audit and Risk Committee



Our audit and risk committee, which must
be comprised of at least three members, all of them independent Directors, is our highest internal control body and provides support
to our Board of Directors on risk, accounting and financial matters. It is in charge of guaranteeing the design, implementation
and supervision of our internal control over financial reporting. It also ratifies the annual hydrocarbons reserves report and
provides support for our Board on analyzing topics related to financial matters, risks, control environment and the assessment
of the Company’s internal and external auditors.



All committee members are required to be
knowledgeable in accounting matters and at least one of them is required to be an expert in financial and accounting matters.



Our Board of Directors has determined that
Jaime Ardila Gómez qualifies as an “audit committee financial expert,” and he is independent under the definition
of “independent” applicable to us under the rules of the NYSE.



The audit and risk committee approves on
a case-by-case basis any engagement of our external independent auditors to provide services different than those related to auditing
our financial statements. Occasionally, the audit and risk committee will have no doubt that these additional services do not compromise
the external auditor’s independence. When in doubt, the committee will request the opinion of the internal auditor.



141







Compensation and Nomination Committee



Our compensation and nomination committee,
which must be comprised of at least three members, including at least one independent director, provides general guidelines for
the selection and compensation of our executive officers and employees.



Corporate Governance and Sustainability Committee



Our corporate governance and sustainability
committee, which must be comprised of at least three members, including at least one independent director, makes proposals to our
Board of Directors to ensure and supervise the fulfillment of our good corporate governance and sustainability practices in accordance
with our corporate governance code.



Business Committee



Our business committee, which must be comprised
of at least five members, including at least one independent Director, assists our Board in analyzing potential business ventures.
Based on its delegation of power, the committee studies and analyzes capital expenditure policies, major investment projects, strategy,
new business and other matters that would help us move forward in our efforts toward the consolidation of our strategy. The primary
criteria used in the committee’s decision-making process are the optimization of our portfolio and the proper allocation
of our resources.



| | 7.4 | Compliance with NYSE Listing Rules
| | --- | ----------------------------------



The following is a summary of the significant
differences between our corporate governance practices and those required for U.S. companies under the NYSE listing standards.



|NYSE Standards                                                                                                                                                                                                                                                                                                                                                      |  | Our Corporate Governance Practices                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Director Independence                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                          
|The majority of the board of directors must be independent.  §303A.01.
     “Controlled companies,” which would include Ecopetrol if we were a U.S. issuer, are exempt from this
    requirement. A controlled company is one in which more than 50% of the voting power is held by an individual, group or
    another company, rather than the public.  §303A.00. |  | Pursuant to our bylaws, the majority of the Board of Directors must be independent. As of
    the date of this annual report, we have seven independent Directors and two non-independent Directors.                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                          
|Executive Sessions                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                          
|The non-management directors of each listed company must meet at regularly scheduled
    executive sessions without management.  §303A.03.                                                                                                                                                                                                                          |  | A comparable rule does not exist under Colombian law.  Except for our audit and risk
    committee, our Board of Directors does not meet without management.                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                          
|Nominating/Corporate Governance and Sustainability Committee                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                          
|A nominating/corporate governance and sustainability committee composed entirely of
    independent directors is required. The committee must have a charter specifying the purpose, duties and evaluation
    procedures of the committee.  §303A.04. “Controlled companies” are exempt from these
    requirements.  §303A.00.                                    |  | Colombian law does not require the establishment of a nominating and a corporate governance and sustainability committee composed entirely of independent directors. Pursuant to our bylaws and board charter, these committees shall be composed of a majority of independent Directors.
|                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                          
|Compensation Committee                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                          
|A compensation committee composed entirely of independent directors is required, which must evaluate and approve executive officer compensation. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee.  §303A.05.  “Controlled companies” are exempt from this requirement.  §303A.00.                       |  | Colombian law does not require the establishment of a compensation committee composed entirely of independent directors. Pursuant to our bylaws and board charter, this committee shall be composed of a majority of independent Directors.                                              



142







|NYSE Standards                                                                                                                                                                                                                                                                            |  | Our Corporate Governance
        Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Audit and Risk Committee                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|An audit committee with a minimum of three independent directors satisfying the independence and other requirements of Rule 10A-3 under the Exchange Act and the more stringent requirements under the NYSE standards is required.  §§303A.06 and 303A.07.                                |  | According to Law 964 of 2005, Colombian companies that are authorized to issue securities by the Superintendence of Finance must have an audit committee that satisfies the requirements of Law 964 of 2005, including its minimum number of members, independence criteria and audit related duties.  Our audit and risk committee is composed entirely of independent Directors, and the committee meets the requirements of Law 964 of 2005 and Rule 10A-3 under the Exchange Act.                                                                                              
|Equity Compensation Plans                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Equity compensation plans and all material revisions thereto require shareholder approval, subject to limited exemptions.  §§303A.08 and 312.03.                                                                                                                                          |  | Under Colombian law, no similar right to vote on equity compensation plans and material revisions thereto is given to shareholders.  We do not give our shareholders the right to vote on equity compensation plans and material revisions thereto.                                                                                                                                                                                                                                                                                                                                
|Corporate Governance Guidelines                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Listed companies must adopt and disclose corporate governance guidelines.  §303A.09.                                                                                                                                                                                                      |  | The Superintendence of Finance recommends the adoption of corporate governance guidelines to all Colombian issuers.  According to Superintendence of Finance Circular No. 028, 2014, the adoption of corporate governance guidelines is voluntary.  Listed companies must annually publish a corporate governance survey comparing their corporate governance standards with those recommended by the Superintendence of Finance.  Our corporate governance code and our survey of the adoption of Colombian practices are available on our website at http://www.ecopetrol.com.co.
|Code of Ethics for Directors, Officers and Employees                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver for directors or executive officers.  The code must contain compliance standards and procedures that will facilitate the effective operation of the code.  §303A.10. |  | We have adopted a code of ethics which complies with applicable U.S. and Colombian law.  Our code of ethics applies to our chief executive officer, chief financial officer, principal accounting officer, persons performing similar functions and to all of the employees, members of the Board of Directors, suppliers, and contractors of Ecopetrol S.A. and its corporate group.  Our code of ethics is available on our website at http://www.ecopetrol.com.co.                                                                                                              



| | 7.5 | Management
| | --- | ----------



The following presents information concerning
our executive officers and senior management. Unless otherwise noted, the majority of these individuals are Colombian citizens.



143







Juan Carlos Echeverry (54)has served
as the Chief Executive Officer of Ecopetrol, Colombia’s National Oil Company, since April 2015. From 2010 to 2012, he was
Colombia’s Minister of Finance. During his mandate, four international publications (The Banker, América Economía,
Emerging Markets, and Institutional Investor) awarded him as Best Finance Minister of the Americas. Prior to his current role,
Mr. Echeverry represented Colombia in the Board of Directors of the Inter–American Development Bank (Washington D.C.). He
also served as Dean of Economics at University of the Andes (Bogotá). From 2000 to 2002 he was the Director of Economic
Planning of Colombia. In 2002, Mr. Echeverry founded Econcept, a Bogotá based economics and business consultancy, and was
partner of Global Source, a New York based consultancy. He is the author of several books about the Colombian economy and co-author
of publications focusing on developing economies. Mr. Echeverry received a Ph.D. in Economics from New York University, a graduate
studies degree in International Economics from Kiel Institute of the World Economy and B.A. in Economics from the University of
the Andes (Bogotá).



Felipe Bayon Pardo (51) has served
as the Executive Vice-President of Ecopetrol since February 2016. Mr. Bayon holds a degree in Mechanical Engineering from the Universidad
de Los Andes (Bogotá). He has over 25 years of experience in the oil and gas industry. For more than 20 years, he worked
at BP plc, most recently as Senior Vice-President of BP America and Head of Global Deepwater Response. From 2005 to 2010, he was
the Regional President of BP Southern Cone (South America), and prior to 2005 he worked in BP’s headquarters as Chief of
Staff to the Upstream CEO and Head of the Executive Office for Exploration and Production. He began his career in 1995 in BP Colombia,
as a Project Engineer, where he held various positions until becoming Vice-President of Operations in Colombia.



María Fernanda Suárez
(42) has served as the Chief Financial Officer of Ecopetrol since August 2015. Ms. Suárez holds a degree in Business
Administration from CESA and a master’s degree in Policy Management from Georgetown University. Ms. Suárez has 20
years of experience in the public and private sectors. She has held various positions in these sectors, including Director of Public
Credit and National Treasury at Ministry of Finance and Public Credit in the Treasury Department, Investment Chief Officer at Porvenir
and other high-level positions at Citibank, ABN AMRO and Bank of America. She has served on the board of directors for ISA, Isagen,
XM, FEN, Cenit, among others.



Hector Manosalva (54) joined
Ecopetrol in 1986 and has served as Vice-President for Development and Production since July, 2014.  Mr. Manosalva holds
a degree in Petroleum Engineering from the Universidad de America (Bogotá), completed post-graduate studies in finance at
the Universidad EAFIT and Executive Management at the Universidad de los Andes.  Over the course of his career at Ecopetrol,
Mr. Manosalva has held various positions, including Executive Vice-President for Production and Exploration, Vice-President
of Production, Production Manager of the Central Region, President of Colombia’s Advisor for Safety and Security of National
Energy Infrastructure, Director of HSE and Corporate Social Responsibility, Production Manager of the Southern Region and Head
of the Production Planning Division.



Max Torres (59)has served as Exploration
Vice-President since September 2014. Mr. Torres holds a B.S. degree in Geology from Universidad Nacional of Tucumán in
Argentina and an M.S. in Stratigraphy from Georgia State University. He has more than 28 years of experience in oil and gas exploration
and production and is a proven world class oil and gas finder and a champion of Latin American oil and gas exploration. Among
his many professional accomplishments, Mr. Torres was directly responsible for the 16 Tcfg Perla gas field discovery in Venezuela,
the 275 Tcfg super giant Galkynysh gas field discovery in Turkmenistan, as well as other oil and gas discoveries. Prior to joining
Ecopetrol, Mr. Torres worked at Repsol from 1997 to 2013 as Exploration Director for Europe and the Middle East, Exploration Director
for Europe and Africa and Exploration Director for Latin America.





Rafael Espinosa (49)has served
as Vice-President of Transportation since September 2016.  Mr. Espinosa holds a bachelor’s degree in Civil Engineering
from Universidad Santo Tomas in Colombia and a MBA from University of the Andes (Bogotá).  He has worked for Ecopetrol
for the last 23 years and has held various positions within the company, including Operations and Maintenance General Manager,
Pipelines Manager, Central Operation Superintendent, Chief of Operations Department, Plant Coordinator, Pipeline Maintenance Engineer
and Community Relationships Engineer.





144







Rafael Guzman (50) joined Ecopetrol
in 2010 and has served as Technical Vice-President since May 2013. Mr. Guzman holds a B.S. degree in Petroleum Engineering from
Universidad America in Colombia (1995), a M.S. in Petroleum Engineering and a PhD in Petroleum Engineering with minor in Mathematics
both from Stanford University. Mr. Guzman has been with Ecopetrol since October 2010, where he has held several positions as regional
production manager. Prior to that, Mr. Guzman worked with ENI in managerial positions in Europe and Latin America.



Luisa Fernanda Lafaurie (56)has
served as Cenit’s Chief Executive Officer since September 2016. Ms. Lafaurie holds a degree in Economics from the Universidad
Javeriana with a Master’s Degree in Business Administration and a Degree in Finance and Senior Management from Los Andes
University (Bogotá). Ms. Lafaurie has accumulated extensive experience in the energy sector, both in the public and private
sector, serving as Minister of Mines and Energy (2001-2002) and Deputy Minister of Mines and Energy (1998-2000), and in the private
sector as an external advisor to mining and fuel distributors companies. She was a founding member of Sumatoria, a firm where she
worked as an advisor on corporate strategies and business issues. As chief executive officer of HJDK (2009-2013), German Efromovich ́s
business group in Colombia, Ms. Lafaurie led the development of hospitality and agribusiness companies. She was also an advisor
for the Synergy Group corporations in Colombia with the exception of Avianca. Ms. Lafaurie worked at Carbocol (1985-1996) and has
served as a member of the board of different companies such as Ocensa, Ecopetrol, Carbocol, Minercol, Ecogas, ISA, Almacenes Exito,
ISAGEN, and Conconcreto in Colombia, and CTEEP in Brazil. Currently, she is member of the board of directors of Avianca, Financiera
de Desarrollo Nacional (FDN), Emgesa, Ocensa and Oleoducto Bicentenario.



Tomas Hernandez (62) has served
as Vice-President of Refining and Industrial Processes since February 2016. He has over 37 years of international experience in
the oil and gas sector. He has served as Business Manager at Chevron’s Pascagoula refinery in the United States, General
Manager for Marketing Operations for Chevron Texaco in Latin America and Africa-Europe-Pakistan Regions and has spent over 20 years
in managerial positions in various refineries at Chevron. Prior to joining Ecopetrol, he was Deputy Upgrader Manager at Petropiar,
a joint venture in which Chevron participates. Mr. Hernandez holds a degree in Chemical Engineering from the University of Missouri
– Rolla (University of Science and Technology Missouri).



Jürgen Loeber (59) has served
as the Projects & Engineering Vice-President of Ecopetrol since May 2016. Mr. Loeber holds a degree in Business Administration
from Universidad del Norte and specialization in Project Management. He joined the Army Corps of Engineers as reserve officer and
reached a captain rank.  He has over 30 years of experience in the Oil & Gas industry. For the last 10 years, he worked
at Equion Limited (formerly BP Exploration Colombia) as Project Director. From 2001 to 2006, he was Project Director for Wood Group
Colombia. From 1992 to 2001 he worked for BP in various countries as project manager, construction manager and project control
engineer. He began his career in 1985 in Exxon as financial analyst.



Pedro Manrique (52) was named Commercial
and Marketing Vice President as of April 2017. Mr. Manrique holds a bachelor’s degree in Electrical Engineering from the
Industrial University of Santander, Colombia. He has a Master’s degree in Industrial and Systems Engineering from the University
of Florida and an MBA from the IE Business School in Madrid, Spain. Mr. Manrique has 27 years of experience in the oil and gas
industry. His previous position was as the Commercial and Business Planning Manager for Chevron Latin America, in Caracas, Venezuela.
At Chevron he also served as Commercial and Business Development Manager in Chevron Colombia based in Bogotá, Colombia.
During his career he also worked Enron Energy Services as Risk Manager, out of their headquarter offices in Houston, Texas. He
has also served as member of the Leadership Team of Chevron Latin America and as member of the national operations council of natural
gas in Colombia, among many other responsibilities.



Carlos Alberto Vargas Medina (47)
has served as Vice-President of Transformation since December 2015. Mr. Vargas holds a degree in Petroleum Engineering from America
University. He has 23 years of experience across the integrated oil and gas value chain with a focus in drilling and well interventions
and an expertise in exploration, appraisal, development and production onshore and offshore wells. He has held management positions
in the United Kingdom, Argentina, Bolivia and Colombia, where he has developed key skills in strategy, performance management systems,
risks management, HSE and integration of multicultural and multidisciplinary teams. Prior to taking his current position, he was
the Vice-President of Drilling and Completions at Equion.



145







Fernán Ignacio Bejarano Arias
(60) has served as Vice-President of Legal Affairs and General Counsel at Ecopetrol since March 2016. Mr. Bejarano Arias
holds a bachelor’s degree in Law from Universidad Javeriana in Bogotá and an LLM from the American University (Washington
D.C.). In his more than thirty years of professional experience, he has been a partner at the law firms of Estudios Palacios Lleras
S.A, Bejarano Cárdenas y Ospina y Asociados Ltda and OPEBSA Compañía de  Abogados S.A.S. and has worked
for several years at important positions in the public sector, such as the Vice-Minister of Foreign Affairs, Secretary of the Monetary
Board, Secretary of the Board of Directors of the Banco de la República (Colombian Central Bank),  Office of Legal
Affairs Counselor at the Presidency of the Republic of Colombia, Vice-President of Legal Affairs and General Counsel at Corporación
Finaciera Colombiana. Mr. Bejarano Arias has been a professor at the Faculty of Law of the Universidad Javeriana, and has been
arbitrator before the Center for Arbitration and Conciliation of the Bogotá Chamber of Commerce.



María Juliana Albán (41)
has served as Compliance Vice-President and Compliance Officer since July 2015.  Ms. Alban holds a law degree from Universidad
Sergio Arboleda with a specialization in Commercial and Financial Law from the same institution.  Since 2007, Ms. Alban has
worked in the Attorney General’s Office (Procuraduría General de la Nación) as Attorney General for State Contracts,
General Secretary and Chief of Legal Office, among other positions within the institution.



Alejandro Arango (57)has served
as Vice-President of Human Resources at Ecopetrol S.A. since October 2014.  He has more than 20 years of professional experience
around the world and has worked as a Vice-President of Human Resources at Banco Santander in Colombia and as Human Resources Director
of the Consumer Finance Division, Strategy Division and Cards Division at Banco Santander in Spain.  Mr. Arango has also served
as Human Resources Director for the Asia Pacific region at Banco Santander in Hong Kong and as a Global Human Resources Division
T&O, among others.  Mr. Arango holds a degree in Strategic Marketing from CESA School of Business and a bachelor’s
degree in Theology from the Universidad Hochschule Sankt Georgen (Frankfurt) and a bachelor’s degree in Philosophy from Javeriana
University.



Andrés Mantilla (46) has
served as the Director of the Colombian Petroleum Institute of Ecopetrol, the technology development center of the company, since
September 2013. He holds a degree in Petroleum Engineering from Universidad Industrial de Santander, Colombia, Master of Science
degree in Petroleum Engineering from Stanford University, and a Ph.D. in Geophysics from Stanford University. His professional
work includes the leadership and management of oil and gas technology development, demonstration and implementation teams. He worked
for Ecopetrol holding various positions between 1994 and 2006. Before rejoining Ecopetrol in 2013, he worked for BP Colombia, Marathon
Oil Company and Maersk Oil. During his professional career he has had exposure to exploration and production projects and the evaluation
of new ventures in Colombia, the Gulf of Mexico, the North Sea, West Africa, South America and the Middle East.



Eduardo Uribe Botero (57) has served
as Vice-President of Sustainable Development and Environmental since August 2015. Mr. Uribe holds a degree in Agricultural Engineering
from Caldas University, a master’s of science in Soil Chemistry and a Ph.D. in Fertility and Management of Tropical Soils.
He has over 25 years of experience in the private and public sectors. In 1994, he was appointed the first Vice-Minister of the
Environment in Colombia. In recent years he has served as a strategic, environmental and social advisor to companies and organizations
in the fields of hydrocarbons, mining, energy, forestry, environmental and agribusiness through the consulting firm Optim Consulting.



Alberto Consuegra Granger (57) has
served as Vice-President of Supply and Services since August 2016. Mr. Consuegra holds a degree in Civil Engineering from Cartagena
University and has a master’s degree in Pavements and Construction Management from Texas A&M University. His latest position
was Vice-President of Exploration and Production at Equion Energia Limited, where he also served as the Vice-President for Projects
and Production. Alberto began his professional career in 1984 by working for Morrison Knudsen International as a contract coordinator
during the construction of the Cerrejon project. In 1993 he joined Ecopetrol, working in the project group, afterwards, he went
on to BP Exploration, where he worked for 16 years starting as a contract coordinator, then as procurement and contract manager,
then human resource manager for the Andean area, and finally as leader of the Colombian Performance Unit.



146







Mónica Jiménez González
(41) has served as Secretary General of Ecopetrol SA since July 2016. Ms. Jiménez holds a law degree from University
of the Andes (Bogotá) and has been allowed to practice as a foreign lawyer in Canada. She holds a post-graduate degree in
Civil and State Responsibility from the Universidad Externado de Colombia and a Master of Science in Development Studies from the
London School of Economics and Political Science (LSE). Before studying abroad, Ms. Jimenez worked as a lawyer at a Colombian law
firm and then as lawyer advising the Minister and the Deputy Minister of Defense of Colombia in matters related to international
law. Prior to returning to Colombia, she lived in Canada for 13 years, time during which she worked as a lawyer in a boutique law
firm specialized in international law and then, in a major Canadian law firm in Vancouver, BC.



None of our Directors or executive officers
has any familial relationship with any Director or executive officer.



| | 7.6 | Compensation of Directors and Management
| | --- | ----------------------------------------



Based on a resolution adopted at our annual
shareholders’ meeting in 2012, compensation for Directors’ attendance in person at meetings of the Board of Directors
and/or committee meetings increased from the equivalent of four to six minimum monthly wage salaries, which totals approximately
COP$4.1 million for 2016 and COP$3.9 million for 2015. Fees for attendance at virtual meetings are set at 50% of the
in-person meeting fee.



The total compensation paid to our Directors,
executive officers and senior management active as of December 31, 2016 during 2016 amounted to COP$13,901 million.



Only one of our executive officers is eligible
to receive pension and retirement benefits from us. The total amount set aside to provide pension and retirement benefits to our
eligible executive officers totals COP$4,674 million.



| | 7.7 | Share
                                         Ownership of Directors and Executive Officers
| | --- | --------------------------------------------------------------------------------------------



No individual Director or executive officer
beneficially owns more than 1% of our outstanding shares.



Table 59 –The following Directors
and executive officers own shares of Ecopetrol:



|Director                     |  | Shares |         |  | % | 
|---------------------------- |  | ------ | ------- |  | - | 
|Joaquín Moreno Uribe         |  |        | 127,988 |  |   | 
|Mauricio Cárdenas Santamaría |  |        | 2,000   |  |   | 
|Juan Carlos Echeverry Garzón |  |        | 33,420  |  |   | 



|Executive Officer    |  |  | Shares |  |  |  | %         |  
|-------------------- |  |  | ------ |  |  |  | --------- | -
|Héctor Manosalva     |  |  | 49,380 |  |  |  | 0.0001201 | %
|Rafael Espinosa Rozo |  |  | 7,200  |  |  |  | 0,0000175 | %



Under Colombian law, all of our shareholders
have the same economic privileges and voting rights.



| | 7.8 | Controls and Procedures
| | --- | -----------------------



Disclosure Controls and Procedures



As required by Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as of December 31, 2016, we evaluated the design and effectiveness of our financial
disclosure controls and procedures under the supervision and participation of our management, including our Chief Executive Officer
and Chief Financial Officer. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures,
including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even
if effective, disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.



147







Based upon this evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that as of the end of the period covered by this annual report, our disclosure controls
and procedures were effective to provide reasonable assurance that the information required to be disclosed in the reports that
we file and submit under the Securities Exchange Act of 1934 is recorded, summarized and reported as and when required and is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure.



Management’s Annual Report on Internal Control over
Financial Reporting



Our management is responsible for establishing
and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities
Exchange Act of 1934. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive
Officer and Chief Financial Officer, and affected by our board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting
purposes in accordance with generally accepted accounting principles, and it includes those policies and procedures that:



| | · | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
transactions and dispositions of our assets;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being
made only in accordance with authorization of our management and directors; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on our financial statements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Therefore, effective control over financial reporting
cannot, and does not, provide absolute assurance of achieving our control objectives. Also, projection of any evaluation of the
effectiveness of the internal controls to future periods is subject to the risk that controls may become inadequate because of
changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.



As of the year ended December 31,
2016, our management conducted an assessment of the effectiveness of our internal control over financial reporting in accordance
with the criteria established in the publication “Internal Control – Integrated Framework (2013)”, issued by
the Committee of the Sponsoring Organizations of the Treadway Commission, as well as the rules set by the SEC in its Final Rule
“Management’s Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic
Reports.”



Based on the assessment performed, management
concluded that our internal control over financial reporting was effective as of the end of the period covered by this annual report.



The effectiveness of our internal control
over financial reporting has been audited by Ernst & Young Audit S.A.S., an independent registered public accounting firm,
as stated in their audit report accompanying our consolidated financial statements.



Audit and Non-Audit Fees



Our consolidated financial statements for
the fiscal year ended December 31, 2016 were audited by Ernst & Young Audit S.A.S. Our consolidated financial statements
for the fiscal years ended December 31, 2015 were audited by PricewaterhouseCoopers Ltda.



148









The following table sets forth the fees
billed to us by Ernst & Young Audit S.A.S. during the fiscal year ended December 31, 2016.





Table 60 – Fees Billed to us
by Ernst & Young Audit S.A.S.



|                   |  | As of December 31,                                                  |      
|------------------ |  | ------------------------------------------------------------------- | -----
|                   |  | 2016                                                                |      
|                   |  | (in millions of  Colombian Pesos,   excluding 16% value  added tax) |      
|Audit fees         |  |                                                                     | 7,800
|Audit-related fees |  |                                                                     | 538  
|Tax fees           |  |                                                                     | 916  
|All other fees     |  |                                                                     | -    
|Total              |  |                                                                     | 9,254



Audit Fees. The audit fees listed
in the table above are the aggregated fees billed by Ernst & Young Audit S.A.S. in connection with their audits of our annual
consolidated financial statements (IFRS), interim consolidated financial statements (under IFRS), statutory audits of Ecopetrol
S.A. and its consolidated subsidiaries and some of its associate entities (under local GAAP) and review of periodic documents filed
with the SEC. In addition, these audit fees include fees related to our independent auditors’ audits of our internal controls
over financial reporting.



Audit-related Fees. The audit-related
fees listed in the table above are the fees billed by Ernst & Young Audit S.A.S. in connection with their agreed-upon procedures
of our variable compensation bonus system and its review procedures in connection with the offering document related to the SEC-registered
bonds we reopened in 2016.



Tax Fees. The tax fees listed in
the table above correspond to (i) advising some subsidiaries about the tax consequences associated with new or proposed legislation,
and (ii) rendering advice to some subsidiaries on the likely tax consequences of proposed transactions and the appropriate methods
of structuring and reporting.



The following table sets forth the fees
billed to us by PricewaterhouseCoopers Ltda. during the fiscal year ended December 31, 2015.



Table 61 – Fees Billed to us
by PricewaterhouseCoopers Ltda.



|                   |  | As of December 31,                                                  |      
|------------------ |  | ------------------------------------------------------------------- | -----
|                   |  | 2015                                                                |      
|                   |  | (in millions of  Colombian Pesos,   excluding 16% value  added tax) |      
|Audit fees         |  |                                                                     | 8,199
|Audit-related fees |  |                                                                     | 606  
|Tax fees           |  |                                                                     | -    
|All other fees (1) |  |                                                                     | 5    
|Total              |  |                                                                     | 8,810










| | (1) | These fees are comprised of coaching sessions in management skills dictated to officers of some
affiliates as well as participation in open training courses.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



Audit Fees. The audit fees listed
in the table above are the aggregated fees billed by PricewaterhouseCoopers Ltda. in connection with their audits of our annual
consolidated financial statements (IFRS), interim consolidated financial statements (under IFRS), subsidiary audits (under local
GAAP) and review of periodic documents filed with the SEC. In addition, these audit fees include fees related to our independent
auditors’ audits of our internal controls over financial reporting.





Audit-related Fees. The audit-related
fees listed in the table above are the fees billed by PricewaterhouseCoopers Ltda. in connection with their agreed-upon procedures
of our variable compensation bonus system as well as the audit of the joint operation agreement of ECP Oil and Gas Germany GmbH.



Tax Fees. The tax fees listed in
the table above correspond to (1) assisting some subsidiaries in the preparation and filing of appropriate tax returns with the
tax authorities (including electronic filings), (2) advising some subsidiaries about the tax consequences associated with new or
proposed legislation and (3) rendering advice to some subsidiaries on the likely tax consequences of proposed transactions and
the appropriate methods of structuring and reporting.





149









Changes in Internal Control over Financial Reporting



There were no changes made in our internal
control over financial reporting during the year ended December 31, 2016 that have materially affected or are reasonably likely
to materially affect the Company’s internal controls over financial reporting.



Attestation Report of the Registered Public Accounting
Firm



Ernst & Young Audit S.A.S.’s
attestation report on our internal control over financial reporting is included in their audit report accompanying our consolidated
financial statements. See Report of Independent Registered Public Accounting Firm to the consolidated financial statements.



Significant Changes



For a description of significant events
since December 31, 2016, please see Note 36 – Subsequent eventsto our consolidated financial statements.





150







|8. | Financial
    Statements
|-- | ------------------------



Ecopetrol S. A.

Consolidated Financial Statements

At December 31, 2016 and 2015 and for three
years ended December 31, 2016, 2015 and 2014





151





Index





|Report of Independent Registered Public Accounting Firm - Ernst & Young          | F-2                                                                                
|-------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------
|                                                                                 |                                                                                    
|Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers | F-4                                                                                
|                                                                                 |                                                                                    
|Consolidated statements of financial position                                    | F-5                                                                                
|                                                                                 |                                                                                    
|Consolidated statements of profit or loss                                        | F-6                                                                                
|                                                                                 |                                                                                    
|Consolidated statements of other comprehensive income                            | F-7                                                                                
|                                                                                 |                                                                                    
|Consolidated statements of changes in equity                                     | F-8                                                                                
|                                                                                 |                                                                                    
|Consolidated statements of cash flows                                            | F-10                                                                               
|                                                                                 |                                                                                    
|1.                                                                               | Reporting entity                                                                   
|                                                                                 |                                                                                    
|2.                                                                               | Basis of presentation                                                              
|                                                                                 |                                                                                    
|3.                                                                               | Significant estimates and accounting judgments                                     
|                                                                                 |                                                                                    
|4.                                                                               | Accounting policies                                                                
|                                                                                 |                                                                                    
|5.                                                                               | New standards issued by the IASB                                                   
|                                                                                 |                                                                                    
|6.                                                                               | Cash and cash equivalents                                                          
|                                                                                 |                                                                                    
|7.                                                                               | Trade and other receivables, net                                                   
|                                                                                 |                                                                                    
|8.                                                                               | Inventories, net                                                                   
|                                                                                 |                                                                                    
|9.                                                                               | Other financial assets                                                             
|                                                                                 |                                                                                    
|10.                                                                              | Taxes                                                                              
|                                                                                 |                                                                                    
|11.                                                                              | Equity instruments measured at fair value                                          
|                                                                                 |                                                                                    
|12.                                                                              | Other assets                                                                       
|                                                                                 |                                                                                    
|13.                                                                              | Assets held for sale and their related liabilities                                 
|                                                                                 |                                                                                    
|14.                                                                              | Investments in associates and joint ventures                                       
|                                                                                 |                                                                                    
|15.                                                                              | Property, plant and equipment                                                      
|                                                                                 |                                                                                    
|16.                                                                              | Natural and environmental resources                                                
|                                                                                 |                                                                                    
|17.                                                                              | Impairment on property, plant and equipment and natural and environmental resources
|                                                                                 |                                                                                    
|18.                                                                              | Intangibles                                                                        
|                                                                                 |                                                                                    
|19.                                                                              | Goodwill                                                                           
|                                                                                 |                                                                                    
|20.                                                                              | Loans and borrowings                                                               
|                                                                                 |                                                                                    
|21.                                                                              | Trade and other payables                                                           
|                                                                                 |                                                                                    
|22.                                                                              | Provisions for employee benefits                                                   
|                                                                                 |                                                                                    
|23.                                                                              | Accrued liabilities and provisions                                                 
|                                                                                 |                                                                                    
|24.                                                                              | Equity                                                                             
|                                                                                 |                                                                                    
|25.                                                                              | Sales revenue                                                                      
|                                                                                 |                                                                                    
|26.                                                                              | Cost of sales (before impairment of non-current assets)                            
|                                                                                 |                                                                                    
|27.                                                                              | Administration, operation and project expenses                                     
|                                                                                 |                                                                                    
|28.                                                                              | Impairment of non-current assets                                                   
|                                                                                 |                                                                                    
|29.                                                                              | Other operating income and (expenses), net                                         
|                                                                                 |                                                                                    
|30.                                                                              | Financial result, net                                                              
|                                                                                 |                                                                                    
|31.                                                                              | Risk management                                                                    
|                                                                                 |                                                                                    
|32.                                                                              | Related parties                                                                    
|                                                                                 |                                                                                    
|33.                                                                              | Joint operations                                                                   
|                                                                                 |                                                                                    
|34.                                                                              | Segment information                                                                
|                                                                                 |                                                                                    
|35.                                                                              | Contractual obligations                                                            
|                                                                                 |                                                                                    
|36.                                                                              | Subsequent events                                                                  
|                                                                                 |                                                                                    
|Supplemental information on oil and gas producing activities (unaudited)         | F-104                                                                              
|                                                                                 |                                                                                    
|Exhibit 1 - Consolidated companies, associates and joint ventures                | F-108                                                                              



F-1







Report of Independent Registered Public Accounting
Firm



The Board of Directors and Shareholders of
Ecopetrol S.A. and subsidiaries



We have audited the accompanying consolidated
statement of financial position of Ecopetrol S.A. and subsidiaries as of December 31, 2016 and the related consolidated statements
of profit or loss, other comprehensive income, changes in equity and cash flows for the year ended December 31, 2016. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.



We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provide a reasonable basis for our opinion.



In our opinion, the financial statements referred
to above present fairly, in all material respects, the consolidated financial position of Ecopetrol S.A. and subsidiaries at December 31,
2016, and the consolidated results of their operations and their cash flows for the year ended December 31, 2016, in conformity
with International Financial Reporting Standards as issued by the International Accounting Standards Board.



We also have audited, in accordance with the
standards of the Public Company Accounting Oversight Board (United States), Ecopetrol S.A. and its subsidiaries’ internal
control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission “(2013 framework)” and our report dated
May 30, 2017 expressed an unqualified opinion thereon.



/s/ Ernst & Young Audit S.A.S.

Bogota, Colombia

May 30, 2017





F-2





Report of Independent Registered Public Accounting Firm



The Board of Directors and Shareholders of
Ecopetrol S.A. and subsidiaries



We have audited Ecopetrol S.A. and subsidiaries’
internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission “(2013 framework)” (the COSO
criteria). Ecopetrol S.A. and subsidiaries’ management is responsible for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Ecopetrol S.A. and subsidiaries’ internal control over financial reporting based on our audit.



We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.



A company’s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.



Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



In our opinion, Ecopetrol S.A. and subsidiaries
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on
the COSO criteria.



We also have audited, in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position of
Ecopetrol S.A. and subsidiaries as of December 31, 2016 and the related consolidated statements of profit or loss, other comprehensive
income, changes in equity and cash flows for the year ended December 31, 2016 of Ecopetrol S.A. and subsidiaries and our report
dated May 30, 2017 expressed an unqualified opinion thereon.



/s/ Ernst & Young Audit S.A.S.

Bogota, Colombia

May 30, 2017





F-3





Report of Independent Registered Public Accounting Firm





To the Board of Directors

And Shareholders of Ecopetrol S. A.





In our opinion, the accompanying consolidated statement of financial
position and the related consolidated statement of profit and loss, other comprehensive income, changes in equity and cash flows
present fairly, in all material respects, the financial position of Ecopetrol S. A. and its subsidiaries (the  ̈Company ̈)
at December 31, 2015, and the results of their operations and their cash flows for each of the two years in the period ended December
31, 2015 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards
of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.



As discussed in Note 2.8 to the consolidated financial statements,
the Company has elected to change the manner in which it presents dry wells in the consolidated statements of cash flows in 2016.





/s/ PricewaterhouseCoopers Ltda.

Bogotá, Colombia

April 28, 2016, except for the change in the manner in which
the company presents dry wells in the consolidated statements of cash flows in 2016 as discussed in Note 2.8 to the consolidated
financial statements, as to which the date is May 30, 2017.



F-4









Ecopetrol S.A.

Consolidated statements of financial position

(Figures expressed in millions of Colombian pesos)



|                                             |  |       |  | As of December 31, |            
|-------------------------------------------- |  | ----- |  | ------------------ | -----------
|                                             |  | Notes |  | 2016               |            
|Assets                                       |  |       |  |                    |            
|Current assets                               |  |       |  |                    |            
|Cash and cash equivalents                    |  | 6     |  |                    | 8,410,467  
|Trade and other receivables, net             |  | 7     |  |                    | 4,212,701  
|Inventories, net                             |  | 8     |  |                    | 3,841,901  
|Other financial assets                       |  | 9     |  |                    | 5,315,537  
|Tax assets                                   |  | 10    |  |                    | 1,129,098  
|Equity instruments measured at fair value    |  | 11    |  |                    | 51,610     
|Other current assets                         |  | 12    |  |                    | 1,035,632  
|                                             |  |       |  |                    | 23,996,946 
|Assets held for sale                         |  | 13    |  |                    | 132,216    
|Total current assets                         |  |       |  |                    | 24,129,162 
|                                             |  |       |  |                    |            
|Non-current assets                           |  |       |  |                    |            
|Investments in associates and joint ventures |  | 14    |  |                    | 1,552,694  
|Trade and other receivables, net             |  | 7     |  |                    | 729,410    
|Property, plant and equipment                |  | 15    |  |                    | 62,328,502 
|Natural and environmental resources          |  | 16    |  |                    | 22,341,047 
|Intangibles                                  |  | 18    |  |                    | 272,132    
|Deferred tax assets                          |  | 10    |  |                    | 5,726,961  
|Other financial assets                       |  | 9     |  |                    | 1,371,358  
|Goodwill                                     |  | 19    |  |                    | 1,159,922  
|Other non-current assets                     |  | 12    |  |                    | 826,736    
|Total non-current assets                     |  |       |  |                    | 96,308,762 
|Total assets                                 |  |       |  |                    | 120,437,924
|                                             |  |       |  |                    |            
|Liabilities                                  |  |       |  |                    |            
|Current liabilities                          |  |       |  |                    |            
|Loans and borrowings                         |  | 20    |  |                    | 4,126,203  
|Trade and other payables                     |  | 21    |  |                    | 6,854,363  
|Provisions for employee benefits             |  | 22    |  |                    | 1,974,496  
|Tax liabilities                              |  | 10    |  |                    | 2,130,940  
|Accrued liabilities and provisions           |  | 23    |  |                    | 821,954    
|Other financial liabilities                  |  |       |  |                    | -          
|Other liabilities                            |  |       |  |                    | 439,274    
|                                             |  |       |  |                    | 16,347,230 
|Liabilities related to assets held for sale  |  | 13    |  |                    | 40,128     
|Total current liabilities                    |  |       |  |                    | 16,387,358 
|                                             |  |       |  |                    |            
|Non-current liabilities                      |  |       |  |                    |            
|Loans and borrowings                         |  | 20    |  |                    | 48,095,824 
|Trade and other payables                     |  | 21    |  |                    | 23,893     
|Provisions for employee benefits             |  | 22    |  |                    | 3,901,082  
|Deferred tax liabilities                     |  | 10    |  |                    | 3,118,650  
|Accrued liabilities and provisions           |  | 23    |  |                    | 5,095,916  
|Other non-current liabilities                |  |       |  |                    | 254,700    
|Total non-current liabilities                |  |       |  |                    | 60,490,065 
|Total liabilities                            |  |       |  |                    | 76,877,423 
|                                             |  |       |  |                    |            
|Equity                                       |  |       |  |                    |            
|Ecopetrol shareholders’ equity               |  | 24    |  |                    | 42,026,858 
|Non-controlling interests                    |  |       |  |                    | 1,533,643  
|Total equity                                 |  |       |  |                    | 43,560,501 
|Total liabilities and equity                 |  |       |  |                    | 120,437,924





F-5









Ecopetrol S.A.

Consolidated statements of profit or loss

(Figures expressed in millions of Colombian pesos, except for the
net earnings (loss) per share, expressed in Colombian pesos)



|                                                        |  |       |  | For the years ended December 31, |           
|------------------------------------------------------- |  | ----- |  | -------------------------------- | ----------
|                                                        |  | Notes |  | 2016                             |           
|Sales revenue                                           |  | 25    |  |                                  | 48,485,561
|Cost of sales (before impairment of non-current assets) |  | 26    |  |                                  | 34,251,423
|Gross profit (excluding impairment)                     |  |       |  |                                  | 14,234,138
|                                                        |  |       |  |                                  |           
|Administration expenses                                 |  | 27    |  |                                  | 1,923,268 
|Operation and project expenses                          |  | 27    |  |                                  | 2,751,687 
|Impairment of non-current assets                        |  | 28    |  |                                  | 928,747   
|Other operating income and (expenses), net              |  | 29    |  |                                  | (274,112  
|Operating income                                        |  |       |  |                                  | 8,904,548 
|                                                        |  |       |  |                                  |           
|Financial result, net                                   |  | 30    |  |                                  |           
|Financial income                                        |  |       |  |                                  | 1,311,743 
|Financial expenses                                      |  |       |  |                                  | (3,463,540
|Foreign exchange gain (loss), net                       |  |       |  |                                  | 976,430   
|                                                        |  |       |  |                                  | (1,175,367
|                                                        |  |       |  |                                  |           
|Share of profit (loss) of associates and joint ventures |  | 14    |  |                                  | 61,345    
|Income before income tax expense                        |  |       |  |                                  | 7,790,526 
|                                                        |  |       |  |                                  |           
|Income tax expense                                      |  | 10    |  |                                  | (4,543,046
|Net income (loss) for the period                        |  |       |  |                                  | 3,247,480 
|                                                        |  |       |  |                                  |           
|                                                        |  |       |  |                                  |           
|Net income (loss) attributable to:                      |  |       |  |                                  |           
|Company’s shareholders                                  |  |       |  |                                  | 2,447,881 
|Non-controlling interests                               |  |       |  |                                  | 799,599   
|                                                        |  |       |  |                                  | 3,247,480 
|Earnings (loss) per share (basic and diluted)           |  | 24.6  |  |                                  | 59.5      





F-6









Ecopetrol S.A.

Consolidated statements of other comprehensive income

(Figures expressed in millions of Colombian pesos)



|                                                                                      |  |       |  | For
    the years ended December 31, |           
|------------------------------------------------------------------------------------- |  | ----- |  | ------------------------------------ | ----------
|                                                                                      |  | Notes |  | 2016                                 |           
|                                                                                      |  |       |  |                                      |           
|Net
    income (loss) of the year                                                     |  |       |  |                                      | 3,247,480 
|                                                                                      |  |       |  |                                      |           
|Other comprehensive
    income                                                        |  |       |  |                                      |           
|Items that may be
    reclassified subsequently to profit or loss (net of tax):       |  |       |  |                                      |           
|                                                                                      |  |       |  |                                      |           
|Unrealized gain
    (loss) on hedges:                                                 |  |       |  |                                      |           
|Cash flow hedge
    for future exports                                                |  | 31    |  |                                      | 461,424   
|Hedge of a net
    investment in a foreign operation                                  |  | 31    |  |                                      | (155,359  
|Cash flow hedge
    with derivative instruments                                       |  | 31    |  |                                      | 33,869    
|Gain (loss) on
    equity instruments measured at fair value                          |  | 11    |  |                                      | 126,205   
|Realized gain on proceeds from sales
    of equity instruments measured at fair value |  |       |  |                                      | (68,497   
|Foreign
    currency translation                                                      |  |       |  |                                      | (925,981  
|                                                                                      |  |       |  |                                      | (528,339  
|Items
    that will not be reclassified subsequently to profit or loss (net of tax):  |  |       |  |                                      |           
|                                                                                      |  |       |  |                                      |           
|Remeasurement
    (loss) gain on defined benefit plans                                |  |       |  |                                      | (1,153,442
|Others
    (losses) gains                                                             |  |       |  |                                      | (46,826   
|                                                                                      |  |       |  |                                      | (1,200,268
|Other
    comprehensive income                                                        |  |       |  |                                      | (1,728,607
|Total
    comprehensive income                                                        |  |       |  |                                      | 1,518,873 
|                                                                                      |  |       |  |                                      |           
|Attributable to:                                                                      |  |       |  |                                      |           
|Ecopetrol shareholders                                                                |  |       |  |                                      | 784,658   
|Non-controlling
    interests                                                         |  |       |  |                                      | 734,215   
|                                                                                      |  |       |  |                                      | 1,518,873 



F-7







Ecopetrol S.A.

Consolidated statements of changes
in equity

(Figures expressed in millions of Colombian pesos)



|                                                                     |  | Notes |  | Subscribed
    and  paid-in capital |            |  | Additional
     paid-in  capital |  |           | Reserves

    (1) |  |  | Other
     comprehensive  income |   |  | Retained
     earnings
 (1) |            |   | Equity
     attributable to Company’s  shareholders |  |            | Non-
    controlling  interests |  |  | Total
    equity |  
|-------------------------------------------------------------------- |  | ----- |  | ----------------------------------- | ---------- |  | -------------------------------- |  | --------- | ----------------- |  |  | -------------------------------- | - |  | --------------------------- | ---------- | - | --------------------------------------------------- |  | ---------- | ------------------------------- |  |  | ---------------- | -
|Balance as of December 31, 2015                                      |  |       |  |                                     | 25,040,067 |  |                                  |  | 6,607,699 |                   |  |  | 5,546,570                        |   |  |                             | 10,846,004 |   |                                                     |  | (6,814,432 | )                               |  |  | 41,225,908       |  
|Net income                                                           |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | -          |   |                                                     |  | 2,447,881  |                                 |  |  | 2,447,881        |  
|Dividends declared                                                   |  |       |  |                                     |            |  |                                  |  |           |                   |  |  |                                  |   |  |                             |            |   |                                                     |  |            |                                 |  |  |                  |  
|Legal reserve used to offset previous year loss                      |  | 24    |  |                                     | -          |  |                                  |  | -         |                   |  |  | (3,869,907                       | ) |  |                             | -          |   |                                                     |  | 3,869,907  |                                 |  |  | -                |  
|Appropriation of reserves, net                                       |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | (117,819                         | ) |  |                             | -          |   |                                                     |  | 117,819    |                                 |  |  | -                |  
|Other movements                                                      |  |       |  |                                     |            |  |                                  |  |           |                   |  |  |                                  |   |  |                             |            |   |                                                     |  | (23,637    | )                               |  |  | (23,637          | )
|Other comprehensive income                                           |  |       |  |                                     |            |  |                                  |  |           |                   |  |  |                                  |   |  |                             |            |   |                                                     |  |            |                                 |  |  |                  |  
|Gain (loss) on hedging instruments:                                  |  |       |  |                                     |            |  |                                  |  |           |                   |  |  |                                  |   |  |                             |            |   |                                                     |  |            |                                 |  |  |                  |  
|Cash flow hedge for future exports                                   |  | 31    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | 461,424    |   |                                                     |  | -          |                                 |  |  | 461,424          |  
|Hedge of a net investment in a foreign operation                     |  | 31    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | (155,359   | ) |                                                     |  | -          |                                 |  |  | (155,359         | )
|Cash flow hedge with derivative instruments                          |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | 24,546     |   |                                                     |  | -          |                                 |  |  | 24,546           |  
|Net fair value gain on equity instruments
    measured at fair value |  | 11    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | 57,708     |   |                                                     |  | -          |                                 |  |  | 57,708           |  
|Foreign currency translation                                         |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | (811,345   | ) |                                                     |  | -          |                                 |  |  | (811,345         | )
|Actuarial valuation losses                                           |  | 22    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | (1,153,442 | ) |                                                     |  | -          |                                 |  |  | (1,153,442       | )
|Other movements                                                      |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                                |   |  |                             | (46,826    | ) |                                                     |  | -          |                                 |  |  | (46,826          | )
|Balance as of December 31, 2016                                      |  |       |  |                                     | 25,040,067 |  |                                  |  | 6,607,699 |                   |  |  | 1,558,844                        |   |  |                             | 9,222,710  |   |                                                     |  | (402,462   | )                               |  |  | 42,026,858       |  



|                                                                       |  | Notes |  | Subscribed
    and  paid-in capital |            |   | Additional
     paid-in capital |  |           | Reserves

    (1) |  |  | Other
     comprehensive  income |   |  | Retained
     earnings
 (1) |            |   | Equity
     attributable to Company’s  shareholders |  |            | Non-
    controlling  interests |  |  | Total
    equity |  
|---------------------------------------------------------------------- |  | ----- |  | ----------------------------------- | ---------- | - | ------------------------------- |  | --------- | ----------------- |  |  | -------------------------------- | - |  | --------------------------- | ---------- | - | --------------------------------------------------- |  | ---------- | ------------------------------- |  |  | ---------------- | -
|Balance as of December 31, 2014                                        |  |       |  |                                     | 10,279,175 |   |                                 |  | 6,607,612 |                   |  |  | 17,963,370                       |   |  |                             | 3,980,749  |   |                                                     |  | 8,192,040  |                                 |  |  | 47,022,946       |  
|Net income (loss)                                                      |  |       |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | -          |   |                                                     |  | (7,193,859 | )                               |  |  | (7,193,859       | )
|Dividends declared                                                     |  | 24    |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | -          |   |                                                     |  | (5,468,521 | )                               |  |  | (5,468,521       | )
|Appropriation of reserves, net                                         |  |       |  |                                     | -          |   |                                 |  | -         |                   |  |  | 2,344,095                        |   |  |                             |            |   |                                                     |  | (2,344,095 | )                               |  |  | -                |  
|Capitalization of reserves                                             |  |       |  |                                     | 14,760,895 |   |                                 |  | -         |                   |  |  | (14,760,895                      | ) |  |                             | -          |   |                                                     |  | -          |                                 |  |  | -                |  
|Other movements                                                        |  |       |  |                                     | (3         | ) |                                 |  | 87        |                   |  |  | -                                |   |  |                             | -          |   |                                                     |  | 3          |                                 |  |  | 87               |  
|Other comprehensive income                                             |  |       |  |                                     |            |   |                                 |  |           |                   |  |  |                                  |   |  |                             |            |   |                                                     |  |            |                                 |  |  |                  |  
|Loss on hedging instruments:                                           |  |       |  |                                     |            |   |                                 |  |           |                   |  |  |                                  |   |  |                             |            |   |                                                     |  |            |                                 |  |  |                  |  
|Cash flow hedge for future exports                                     |  | 31    |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | (217,291   | ) |                                                     |  | -          |                                 |  |  | (217,291         | )
|Cash flow hedge with derivative instruments                            |  |       |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | (43,590    | ) |                                                     |  | -          |                                 |  |  | (43,590          | )
|Net fair value (loss) on equity instruments
    measured at fair value |  | 11    |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | (126,316   | ) |                                                     |  | -          |                                 |  |  | (126,316         | )
|Foreign currency translation                                           |  |       |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | 5,789,207  |   |                                                     |  | -          |                                 |  |  | 5,789,207        |  
|Actuarial valuation gains                                              |  | 22    |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | 1,404,602  |   |                                                     |  | -          |                                 |  |  | 1,404,602        |  
|Other movements                                                        |  |       |  |                                     | -          |   |                                 |  | -         |                   |  |  | -                                |   |  |                             | 58,643     |   |                                                     |  | -          |                                 |  |  | 58,643           |  
|Balance as of December 31, 2015                                        |  |       |  |                                     | 25,040,067 |   |                                 |  | 6,607,699 |                   |  |  | 5,546,570                        |   |  |                             | 10,846,004 |   |                                                     |  | (6,814,432 | )                               |  |  | 41,225,908       |  



(1) For comparative purposes, the initial
balances of reserves and accumulated profits were reclassified, without changing the equity attributable to the shareholders of
Ecopetrol. See note 2.8.





F-8







Ecopetrol S.A.

Consolidated statements of changes in equity

(Figures expressed in millions of Colombian pesos)



|                                                                            |  | Notes |  | Subscribed
    and paid- in capital |            |  | Additional
     paid-in  capital |  |           | Reserves
     (1) |  |  | Other
     comprehensive income |  |  | Retained
     earnings (1) |           |   | Equity
     attributable  to Company’s  shareholders |  |             | Non-
    controlling interests |  |  | Total
    equity |  
|--------------------------------------------------------------------------- |  | ----- |  | ----------------------------------- | ---------- |  | -------------------------------- |  | --------- | ----------------- |  |  | ------------------------------- |  |  | -------------------------- | --------- | - | ---------------------------------------------------- |  | ----------- | ------------------------------ |  |  | ---------------- | -
|Balance as of January 1st, 2014                                             |  |       |  |                                     | 10,279,175 |  |                                  |  | 6,607,540 |                   |  |  | 15,300,725                      |  |  |                            | (86,956   | ) |                                                      |  | 16,498,512  |                                |  |  | 48,598,996       |  
|Net income                                                                  |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                               |  |  |                            | -         |   |                                                      |  | 5,046,517   |                                |  |  | 5,046,517        |  
|Dividends declared                                                          |  | 24    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                               |  |  |                            | -         |   |                                                      |  | (10,690,342 | )                              |  |  | (10,690,342      | )
|Appropriation of reserves, net                                              |  | 24    |  |                                     | -          |  |                                  |  | -         |                   |  |  | 2,662,645                       |  |  |                            | -         |   |                                                      |  | (2,662,645  | )                              |  |  | -                |  
|Other movements                                                             |  |       |  |                                     | -          |  |                                  |  | 72        |                   |  |  | -                               |  |  |                            | -         |   |                                                      |  | (2          | )                              |  |  | 70               |  
|Other comprehensive income                                                  |  |       |  |                                     |            |  |                                  |  |           |                   |  |  |                                 |  |  |                            |           |   |                                                      |  |             |                                |  |  |                  |  
|Net fair value gain (loss) on equity instruments measured at fair
    value |  | 11    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                               |  |  |                            | 76,435    |   |                                                      |  | -           |                                |  |  | 76,435           |  
|Foreign currency translation                                                |  |       |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                               |  |  |                            | 3,247,477 |   |                                                      |  | -           |                                |  |  | 3,247,477        |  
|Actuarial valuation gains                                                   |  | 22    |  |                                     | -          |  |                                  |  | -         |                   |  |  | -                               |  |  |                            | 743,793   |   |                                                      |  | -           |                                |  |  | 743,793          |  
|Balance as of December 31, 2014                                             |  |       |  |                                     | 10,279,175 |  |                                  |  | 6,607,612 |                   |  |  | 17,963,370                      |  |  |                            | 3,980,749 |   |                                                      |  | 8,192,040   |                                |  |  | 47,022,946       |  



(1) For comparative purposes, the initial balances of reserves and
accumulated profits were reclassified, without changing the equity attributable to the shareholders of Ecopetrol. See note 2.8.



F-9







Ecopetrol S.A.

Consolidated statements of cash flows

(Figures expressed in millions of Colombian pesos)



|                                                                                     |  |          |  | For the years ended December 31, |           
|------------------------------------------------------------------------------------ |  | -------- |  | -------------------------------- | ----------
|                                                                                     |  | Note     |  | 2016                             |           
|Cash flow provided by operating activities:                                          |  |          |  |                                  |           
|Net income (loss) for the period                                                     |  |          |  |                                  | 3,247,480 
|Adjustments to reconcile net income (loss) to cash provided by operating activities: |  |          |  |                                  |           
|Income tax                                                                           |  | 10       |  |                                  | 4,543,046 
|Depreciation, depletion and amortization                                             |  | 15,16,18 |  |                                  | 7,607,000 
|Foreign exchange loss                                                                |  | 30       |  |                                  | (976,430  
|Finance costs recognised in profit or loss                                           |  |          |  |                                  | 3,345,515 
|Dry wells                                                                            |  | 2.8 - 16 |  |                                  | 342,691   
|Loss on disposal of non-current assets                                               |  |          |  |                                  | 78,990    
|Impairment of assets                                                                 |  |          |  |                                  | 1,003,140 
|Fair value (gain) loss on financial assets valuation                                 |  |          |  |                                  | (59,593   
|(Gain) loss on share of profit of associates and joint ventures                      |  | 14       |  |                                  | (61,345   
|(Gain) on sale of equity instruments measured at fair value                          |  |          |  |                                  | (47,129   
|Realized foreign exchange cash flow hedges                                           |  | 25       |  |                                  | (33,074   
|Net changes in operating assets and liabilities                                      |  |          |  |                                  | -         
|Accounts and notes receivable                                                        |  |          |  |                                  | (1,400,583
|Inventories                                                                          |  |          |  |                                  | (217,198  
|Accounts payable                                                                     |  |          |  |                                  | (619,131  
|Taxes payable                                                                        |  |          |  |                                  | 2,547,232 
|Labor obligations                                                                    |  |          |  |                                  | (11,677   
|Estimated liabilities and provisions                                                 |  |          |  |                                  | (827,153  
|Other assets                                                                         |  |          |  |                                  | 118,523   
|Income tax paid                                                                      |  |          |  |                                  | (4,347,364
|Net cash provided by operating activities                                            |  |          |  |                                  | 14,232,940
|                                                                                     |  |          |  |                                  |           
|Cash flows from investing activities:                                                |  |          |  |                                  |           
|Investment in property, plant and equipment                                          |  | 15       |  |                                  | (3,646,929
|Investment in natural and environmental resources                                    |  | 2.8 - 16 |  |                                  | (2,121,295
|Additions to intangibles                                                             |  | 18       |  |                                  | (69,253   
|Proceeds from sales of equity instruments measured at fair value                     |  | 11       |  |                                  | 966,715   
|(Purchases) sales of other financial assets                                          |  |          |  |                                  | (5,446,507
|Interest received                                                                    |  |          |  |                                  | 386,001   
|Dividends received                                                                   |  |          |  |                                  | 437,803   
|Proceeds from sales of property, plant and equipment                                 |  |          |  |                                  | 109,896   
|Net cash used in investing activities                                                |  |          |  |                                  | (9,383,569
|                                                                                     |  |          |  |                                  |           
|Cash flows from financing activities:                                                |  |          |  |                                  |           
|Proceeds from borrowings                                                             |  |          |  |                                  | 4,594,640 
|Repayment of borrowings                                                              |  |          |  |                                  | (3,149,917
|Interest paid                                                                        |  |          |  |                                  | (2,495,446
|Capitalizations                                                                      |  |          |  |                                  | -         
|Dividends paid                                                                       |  | 24       |  |                                  | (1,712,298
|Net cash used in financing activities                                                |  |          |  |                                  | (2,763,021
|                                                                                     |  |          |  |                                  |           
|Exchange difference in cash and cash equivalents                                     |  |          |  |                                  | (226,333  
|Net increase (decrease) in cash and cash equivalents                                 |  |          |  |                                  | 1,860,017 
|Cash and cash equivalents at the beginning of the year                               |  | 6        |  |                                  | 6,550,450 
|Cash and cash equivalents at the end of the year                                     |  |          |  |                                  | 8,410,467 
|Non-cash transactions                                                                |  |          |  |                                  |           
|Capitalization of reserves                                                           |  |          |  |                                  | -         
|Payment of income tax through offset of recoverable balances                         |  |          |  |                                  | 656,121   



F-10


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)






| | 1. | Reporting entity
| | -- | ----------------



Ecopetrol S.A. is a mixed economy company,
with a commercial nature, formed in 1948 in Bogotá – Colombia, headquarters of the Ecopetrol Business Group. Its corporate
purpose is to develop commercial or industrial activities arising from or related to the exploration, production, refining, transportation,
storage, distribution, and selling of hydrocarbons, their by-products and associated products on its own or through its subsidiaries
(hereafter “Ecopetrol”, the “Company” or Ecopetrol Business Group).



An 11.51% of Ecopetrol S.A.’s shares
are publicly traded on the Stock Exchanges of Colombia, New York, USA and Lima, Peru. The remaining shares (88.49% of the total
outstanding shares) are owned by the Colombian Ministry of Finance and Public Credit.



The address of the main office of Ecopetrol
S.A. is Bogotá – Colombia, Carrera 13 No. 36 - 24.



| | 2. | Basis of presentation
| | -- | ---------------------



| | 2.1 | Statement of compliance and authorization of the financial
                                         statements
| | --- | --------------------------------------------------------------------------------------------------------------



These consolidated financial statements of
Ecopetrol for the years ended on December 31, 2016, 2015 and 2014 have been prepared in accordance with International Financial
Reporting Standards (IFRS) and their interpretations, issued by the International Accounting Standards Board (IASB). The Ecopetrol
Business Group adopted IFRS starting January 1, 2015, with a transition date of January 1, 2014.



Accounting policies described in Note 4 have
been applied consistently in all periods.



These consolidated financial statements were
approved by Ecopetrol’s Management on May 30, 2017.



| | 2.2 | Basis for consolidation
| | --- | -----------------------



The consolidated financial statements were
prepared by consolidating all companies set out in Exhibit 1, which are those where Ecopetrol exercises direct or indirect control.
Control is achieved when the Company:



| | § | Has power over the investee;
| | - | ----------------------------

| | § | Is exposed, or has the rights, to variable returns from its involvement with the investee; and
| | - | ----------------------------------------------------------------------------------------------

| | § | Has the ability to use its power to affect its operational returns. This occurs when the Company
has less than a majority of the voting rights of an investee, and it still has the power over the investee to provide it with the
practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient or not to give it power,
including:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) | The percentage of the Company's voting rights regarding to the size and division of the shares
of other vote holders;
| | -- | ---------------------------------------------------------------------------------------------------------------------

| | b) | Potential voting rights held by the Company, other vote holders or other parties;
| | -- | ---------------------------------------------------------------------------------

| | c) | Rights arising from other contractual arrangements; and
| | -- | -------------------------------------------------------

| | d) | Any additional facts and circumstances that indicate that the Company
has, or does not have, the current ability to direct the relevant activities, at the time that decisions need to be made,including voting patterns at previous shareholders’ meetings
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Subsidiaries are consolidated from the date
on which control is obtained until the date that such control ceases, using consistent accounting policies.



All inter-company assets and liabilities, equity,
income, expenses and cash flows relating to transactions between entities of the Group were eliminated on consolidation. Unrealized
losses are also eliminated. Non-controlling interest represents the proportion of profit, other comprehensive income and net assets
in subsidiaries that are not attributable to Ecopetrol’s shareholders.





F-11


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)




In 2015, the Board of Directors of Ecopetrol
S.A authorized the creation of a Colombian company indirectly wholly owned by Ecopetrol S.A. This Company will develop offshore
activities in Colombia, which the company currently carries out as operator and non-operator, and take advantage of the benefits
of Decree 2682/14, “pursuant to which the conditions and requirements are established for declaring the existence of Permanent
Offshore Free Trade Zones”. At December 31, 2015, the legal proceedings were pending to formalize the establishment of the
subsidiary.



The following are the subsidiaries that were
incorporated in 2016:



| | a) | Ecopetrol Costa Afuera S.A.S.: Subsidiary engaged
in the production and exploration segment with a 100% ownership by the Group and that was created with the purpose of carrying
out offshore activities in Colombia, which Ecopetrol is currently conducting as operator and non-operator of permits.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | Sento
                                         S.A.S.: Subsidiary engaged in the
                                         transport segment that was created for transferring 100% of the equity share held by
                                         Equion in Oleoducto de Colombia S.A.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.3 | Measurement basis
| | --- | -----------------



The consolidated financial statements have
been prepared on a historical cost basis, except for financial assets and liabilities that are measured at fair value through profit
or loss and / or through other comprehensive income at the end of each reporting period, as explained in the accounting policies
included below.



Historical cost is generally based on fair
value of the consideration given in exchange for goods and services.



The fair value is the price that would be received
from selling an asset or that would be paid for transferring a liability among market participants, in an orderly transaction,
on the date of measurement. When estimating the fair value, the Group uses assumptions that market participants would use for pricing
an asset or liability at current market conditions, including risk assumptions.



| | 2.4 | Functional and presentation currency
| | --- | ------------------------------------



The functional currency of
each group’s company is determined in relation to the main economic environment where they operate. The consolidated financial
statements are presented in Colombian pesos, which is the Group’s functional and presentation currency.



The statement of profit or loss and statement
of cash flows of subsidiaries with functional currencies different from Ecopetrol’s functional currency are translated at
the exchange rates on the dates of the transaction or at the monthly average exchange rate. Assets and liabilities are translated
at the closing rate and other equity items are translated at exchange rates at the time of the transaction. All resulting exchange
differences are recognized in other comprehensive income. Upon disposal of all or part of an interest in a subsidiary, the portion
of the cumulative translation adjustment related to the company is recognized in the consolidated statement of profit or loss.



The financial statements
are presented in Colombian pesos rounded up to the closest million unit (COP 000,000) except when otherwise indicated.





F-12


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 2.5 | Foreign currency
| | --- | ----------------



In the preparation of the financial statements
of Ecopetrol, transactions in currencies other than the Company’s functional currency are recognized at the rates of exchange
prevailing at the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies
are translated at the rates prevailing at the period end and variations presented on translation are recognized in financial results,
net, except those resulting from the conversion of loans and borrowings designated as cash flow hedges or net investment in a business
abroad, which are recognized in other comprehensive income within equity. When the hedged item affects the results, exchange differences
accumulated in equity are reclassified to the consolidated statement of profit or loss as part of the operating result.



Non-monetary items carried at fair value that
are denominated in foreign currencies are translated using the rates prevailing at the date when the fair value was determined.



Net investment in foreign operations includes
equity financing and long-term inter-company loans for which settlement is neither planned nor likely to occur in the foreseeable
future. The exchange differences derived from the translation of net investment in a foreign operation are accumulated in the other
comprehensive income.



| | 2.6 | Classification of assets and liabilities as current and non-current
| | --- | -------------------------------------------------------------------



In the consolidated statement of financial
position, assets and liabilities are classified in accordance with their maturities between current, those with maturity equal
to or less than twelve months, and non-current, those with maturity exceeding twelve months.



| | 2.7 | Earnings (loss) per share (basic and diluted)
| | --- | ---------------------------------------------



Basic earnings (loss) per share is calculated
by dividing the profit for the year attributable to ordinary equity holders of the parent by weighted average number of ordinary
shares outstanding during the year. There is no potential dilution of shares.



| | 2.8 | Changes in presentation policies and reclassifications
| | --- | ------------------------------------------------------



| | a) | Subsequent to the issuance of the consolidated financial statements as of December 31, 2015, the
Company modified its presentation policy in the cash flows statements to dry wells, for better understanding and comparability
respect to the amount invested in exploration activities; the above is aligned with the policy of successful efforts described
in Note 4.7 which states that the costs of exploratory wells are initially capitalized until it is determined if they are commercially
viable, additionally, it allows alignment of the information presented with the annual investment budget published by the Company,
which includes investments to be made during the period, whether commercially viable or not. With this change, starting in 2016,
investments that could result in dry wells are added back to net income in determining cash flows provided by operations and are
included in cash flows used in investing activities. The following is the detail of the mentioned change:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-13


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)






|                                                   |  | December 31,  2015 as  previously  reported |             |   | Reclassifications |  |            | December 31,  2015 as  adjusted | 
|-------------------------------------------------- |  | ------------------------------------------- | ----------- | - | ----------------- |  | ---------- | ------------------------------- | 
|Cash provided by operating activities:             |  |                                             |             |   |                   |  |            |                                 | 
|Dry wells                                          |  |                                             | -           |   |                   |  | 1,266,440  |                                 | 
|Total cash provided by operating activities        |  |                                             | 10,411,475  |   |                   |  | 1,266,440  |                                 | 
|Cash provided by operating activities::            |  |                                             |             |   |                   |  |            |                                 | 
|Investment in natural and environmental  resources |  |                                             | (5,590,321  | ) |                   |  | (1,266,440 | )                               | 
|Total cash used in investing activities            |  |                                             | (11,545,039 | ) |                   |  | (1,266,440 | )                               | 
|Cash and cash equivalents at the end of the year   |  |                                             | 6,550,450   |   |                   |  | -          |                                 | 



|                                                  |  | December 31,  2014 as  previously  reported |             |   | Reclassifications |  |            | December 31,  2014 as  adjusted | 
|------------------------------------------------- |  | ------------------------------------------- | ----------- | - | ----------------- |  | ---------- | ------------------------------- | 
|Cash provided by operating activities:            |  |                                             |             |   |                   |  |            |                                 | 
|Dry wells                                         |  |                                             | -           |   |                   |  | 1,563,384  |                                 | 
|Total cash provided by operating activities       |  |                                             | 16,572,981  |   |                   |  | 1,563,384  |                                 | 
|Cash provided by operating activities:            |  |                                             |             |   |                   |  |            |                                 | 
|Investment in natural and environmental resources |  |                                             | (5,038,296  | ) |                   |  | (1,563,384 | )                               | 
|Total cash used in investing activities           |  |                                             | (11,568,877 | ) |                   |  | (1,563,384 | )                               | 
|Cash and cash equivalents at the end of the year  |  |                                             | 7,618,178   |   |                   |  | -          |                                 | 



| | b) | For comparison purposes, the Company reclassified certain amounts from prior periods, in the concepts
that comprise the statement of changes in equity, as well as, the reconciliation of the income tax expense related in the note
10 - Taxes, to allow better comparability with the current period. These reclassifications do not impact either profit or loss
or equity.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Significant
                                         estimates and accounting judgments
| | -- | ---------------------------------------------------------------------------------------



The preparation of the financial statements
requires estimates from Company management to quantify some assets, liabilities, sales revenues, costs and commitments recognized
in the financial statements. These estimates have been made based on the best available data for realized facts. Uncertainty on
the assumptions and estimations could result into material future changes that could affect the value of assets or liabilities.
The changes to such estimates are recognized in a prospective manner during the period in which the estimate is reviewed.



The following are accounting judgments and
estimates with the most significant effect for preparing the financial statements:



| | 3.1 | Oil and Gas reserves
| | --- | --------------------



Measurements relating to depreciation, depletion,
amortization, impairment and asset abandonment obligations are determined, in part, based on the Company's estimated reserves of
oil and natural gas. Reserves estimation is an inherently complex process and it involves professional judgments.





F-14


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)




The reserves estimation is conducted
annually at December 31 in accordance with the United States Securities and Exchange Commission (SEC) definitions and rules set
forth in Rule 4-10(a) of SEC Regulation S-X and the disclosure guidelines contained in the SEC final rule - Modernization of Oil
and Gas Reporting.



As required by current regulations, the future
estimated date in which a field will no longer produce for economic reasons, is based on actual costs and average of crude prices
(calculated as the arithmetical average of prices on the first day of the past 12 months). The estimated date for end of production
will affect the amount of reserves, unless the prices have been defined by contractual agreements; therefore, if the prices and
costs change from one year to the other, the proved reserves estimate also changes. Generally, our prove reserves decrease as prices
go down and increase when prices go up.



Reserves estimations are prepared using geological,
technical and economic factors, including projections of future production rates, oil prices, engineering data and length and amount
of future investments with a certain degree of uncertainty. These estimations reflect the regulatory and market conditions existing
on the date of which could significantly differ from other conditions during the year or in future periods. Any changes in regulatory
and/or market conditions and assumptions could materially affect the reserves estimation.



Impact of oil reserves and natural gas in
depreciation and depletion



Changes in estimates of proved developed reserves
may affect the carrying amounts of exploration and production assets, natural resources and environment, goodwill, liabilities
for dismantling and depreciation, depletion and amortization. With all other variables remaining unchanged, a decrease in estimated
proved reserves would increase, prospectively, depreciation, depletion and amortization expenses, while an increase in reserves
would reduce depreciation and amortization expenses, as depreciation, depletion and amortization charges are calculated using the
units of production method.



Information about the carrying amounts of exploration
and production assets and the amounts charged to income, including depreciation, depletion and amortization, is presented in Notes
15 and 16.



| | 3.2 | Asset impairment (recovery)
| | --- | ---------------------------



The Company uses its professional judgment
in assessing the existence of evidence of impairment, based on internal and external factors. If impairment indicators exist, Company
estimated the recoverable amount of the cash generating units, which is considered to be the higher of the fair value less costs
of disposal and value in use. The assessments require the use of estimates and assumptions including: (1) Estimation of the volumes
and market value of oil and natural gas reserves; (2) production profiles for oilfields and future production of refined and chemical
products; (3) investments, taxes and future costs; (4) useful life of assets; (5) future prices, and (6) discount rate, which is
revised annually and determined as the weighted average cost of capital (WACC), (7) changes in environmental regulation, among
other factors. The recoverable amount is compared to the carrying amount of the asset or the cash generating unit, to determinate
if the asset is impaired.



Future price assumptions are estimated at current
market conditions. Expected production volumes, which comprise proved and unproved reserves, are used for impairment testing because
management believes this to be the most appropriate indicator of expected future cash flows, which would also be considered by
market participants. Reserves estimates are inherently imprecise and subject to risk and uncertainty. Furthermore, projections
about unproved volumes are based on information that is necessarily less robust than that available for mature reservoirs.



Changes in estimates and judgments may impact
these projections, which may impact the recoverable amount of the cash generating units and, as a consequence, may also impact
the recognition or recovery of asset impairment





F-15


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 3.3 | Exploration and evaluation costs
| | --- | --------------------------------



Certain exploration and evaluation costs are
initially capitalized when it is expected that an economically viable extraction operation can be established. The Company uses
its professional judgment of future events and circumstances and makes estimates in order to assess annually the generation of
future economic benefits for extracting the oil resources, as well as technical and commercial analyses to confirm intent of continuing
their development. Changes regarding available information such as drilling success level or changes in the project's economics,
production costs, investment levels, and others, may result in capitalized exploration drilling costs being recognized as a cost
in profit or loss for the period. Since 2016, dry wells are treated as investment activities in the statement of cash flows.



3.4
Determination of cash generating units (CGU)



The allocation of assets in cash generating
units requires significant judgment, as well as interpretations regarding the integration between assets, the existence of active
markets, similar exposure to market risk, shared infrastructure, and the way in which management monitors the operations. See Note
4.12 - Impairment in the value of assets for more information.



| | 3.5 | Asset retirement obligation
| | --- | ---------------------------



According to environmental and oil regulations,
the Company must recognize costs for the abandonment of oil extraction and transportation facilities, which include the cost of
plugging and abandoning wells, dismantling facilities, and environmental remediation in the affected areas.



The estimated costs of dismantling and abandonment
of these facilities are recorded in the functional currency of each company at the time of the installation of assets. The estimated
obligation created for the abandonment and dismantling are subject to annual reviews and adjusted to reflect the best available
estimation due to technological changes, political, economic, and environmental and security issues, as well as relationships with
stakeholders.



The determination of these estimations is complex
and involve significant judgment by Management, such as internal projections of costs, changes in reserve estimates, future inflation
and discount rates. The Company considers that the abandonment costs are reasonable, based on the experience of the Ecopetrol Business
Group and market conditions; nevertheless, significant variations in external factors used for the calculation of the estimation
could significantly impact the financial statements.



| | 3.6 | Pension plan and other benefits
| | --- | -------------------------------



The calculation of expenses, liabilities and
adjustments relating to pension plans and other defined retirement benefits requires management to use judgment in the actuarial
assumptions used in such calculation. The actuarial assumptions include estimates regarding future mortality, retirement, changes
in compensation and discount rate in order to reflect the value of money over time, in addition to the rate of return on the plan's
assets. Due to the complexity of the valuation of these variables, as well as the long term nature, the obligations that are defined
are quite sensitive to any change of these assumptions.



These assumptions are reviewed on an annual
basis for purposes of actuarial valuations and may differ materially from actual results due to changing economic and market conditions,
regulatory events, judicial rulings, higher or lower retirement rates, or longer or shorter life expectancies among employees.
The calculation of pension bonds is maintained for compliance with the Company's pension obligations, in accordance with current
regulations.





F-16


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 3.7 | Goodwill impairment
| | --- | -------------------



The Company performs an annual impairment test
of goodwill to assess if it carrying amount is recoverable. Goodwillis allocated to each of the cash-generating units (or groups
of cash generating units) expecting to benefit from the synergies of the combination.



The determination of the recoverable value
is described in note 4.12 and its calculation requires assumptions and estimations. The Company considers that the assumptions
and estimations used are reasonable and supportable based on the current market conditions and are aligned to the risk profile
of the related assets. However, different assumptions and estimations may be used which would lead to different results. Valuation
models used to determine fair value are sensitive to changes in the underlying assumptions. For example, sales volumes and prices
that will be paid for the purchase of raw materials are assumptions that may vary in the future. Adverse changes in any of these
assumptions could lead to the recognition of goodwill impairment.



| | 3.8 | Litigation
| | --- | ----------



The Company is subject to claims for regulatory
and arbitration proceedings, tax assessments and other claims arising in the ordinary course of business. Management evaluates
these claims based on their nature, the likelihood that they materialize, and the amounts involved, to decide on any changes to
the amounts accrued and/or disclosed in the financial statements. This analysis, which may require considerable judgment, includes
assessment of current legal proceedings brought against the Company and claims not yet initiated.  A provision is recognized
when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.



| | 3.9 | Taxes
| | --- | -----



Calculation of the income tax provision requires
interpretation of the tax law in the jurisdictions where the Ecopetrol Business Group operates. Significant judgment is required
to determine estimates for income tax and to evaluate the recoverability of deferred tax assets, which is based on estimates of
future taxable income and the ability to generate sufficient results during the periods in which such deferred taxes are deductible.
Liabilities for deferred taxes are recorded in accordance with estimates of net assets that in the future will not be tax deductible.



To the extent that actual future cash flows
and taxable income differ significantly from the estimates, the Company's capacity recover recorded deferred tax assets could be
affected.



Additionally, changes in tax rules could limit
the capacity of the Company to obtain tax deductions in future years, as well as new potential liabilities resulting from questioning
by the reviews of tax authorities.



Tax positions used imply a thorough evaluation
by Management, and these are reviewed and adjusted in response to situations such as expiry in application of laws, closing of
tax audits, additional disclosures caused by any legal issue or a court decision related to a particular tax issue. The Company
creates provisions based on the estimation of a potential adverse decision that could be derived from a tax audit. The amount of
these provisions depends on factors such as previous experience in tax audits and different interpretations of tax rules by tax
paying entities and tax authorities. The actual results may differ from recorded amounts.





F-17


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 3.10 | Hedge Accounting
| | ---- | ----------------



The process of identifying hedge relations
among hedging elements and instruments (derivative and non-derivative such as long term debt in foreign currency), and the related
effectiveness requires management judgment. The Company periodically assesses alignment between identified hedges and its risk
management policy.



| | 4. | Accounting policies
| | -- | -------------------



The accounting policies below have been consistently
applied in all the periods presented, unless otherwise indicated.



| | 4.1 | Financial instruments
| | --- | ---------------------



The classification of financial instruments
depends on the nature and purpose for which the financial assets or liabilities were acquired and is determined at the time of
initial recognition. Financial assets and financial liabilities are initially measured at their fair value. Transaction costs that
are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the statement of profit
or loss.



Financial assets with changes in profit or
loss and other comprehensive income are stated at fair value. Financial instruments such as, loans and trade receivables, other
receivables and financial assets held-to-maturity are stated at amortized cost using the effective interest method.



Available for sale equity investments that
do not have a market quoted price and which fair value cannot be reliably measured are measured at cost less any loss for impairment
identified at the end of each reporting period.



Fair value measurement



Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
either in the principal market for the asset or liability or in absence of a principal market, in the most advantageous market
for the asset or liability.



All assets and liabilities for which fair value
is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level
input that is significant to the fair value measurement as a whole, as follows::



| | · | Level 1: Quoted (unadjusted) market prices in active markets for identical assets and liabilities.
For the Company, level-1 inputs include marketable securities that are actively traded.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Level 2: Entries different from those of Level 1 that are observable, either directly or indirectly.
For the Company, Level-2 entries include prices of similar assets, prices obtained through quotations made by stockbrokers, and
prices that can be substantially corroborated with other observable data with the same term of the contract.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | · | Level 3: Unobservable inputs. The Company does not use Level-3 inputs for the measurement of financial
assets and liabilities. The Company may use Level-3 inputs for the determination of fair value associated with certain measurements
of non-financial assets to determine their recoverable amount.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-18


Ecopetrol S.A. Notes to Consolidated Financial Statements (Figures expressed in millions of Colombian pesos, unless otherwise stated)






Effective interest method



The effective interest method is a method of
calculating the amortized cost of a financial instrument and accounting of income or financial cost over the relevant period. The
effective interest rate is the discount rate that exactly discounts estimated future cash receipts or payments (including all fees,
transaction costs and other premiums or discounts) through the expected life of the financial instrument (or, when appropriate,
at a shorter period), to the net carrying amount on initial recognition.



Impairment



The Company assesses, at each reporting date,
whether there is objective evidence that a financial asset or a groupof financial assets is impaired. Financial assets are assessed for impairment indicators at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred
after initial recognition, the estimated future cash flows of the asset have been affected. For financial assets measured at amortized
cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.



De-recognition of financial assets and liabilities



Ecopetrol derecognizes a financial asset only
upon expiration of the contractual rights to receive cash flows from the financial asset or, when it has transferred its rights
to receive cash flows from the asset or has assume an obligation to pay the received cash flows in full without material delay
to a third party and either (a) it has transferred substantially all the risks and rewards inherent in the ownership of the financial
asset or (b) it has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.



When the Company neither transfer nor retain
substantially all the risks and rewards of the asset nor transferred control of the asset, the Company continues recognizing the
transferred asset, to the extent of it continuing involvement, and also recognizes an associated liability.



| | 4.1.1 | Cash and cash equivalents
| | ----- | -------------------------



Cash and cash equivalents include cash on hand
and at banks and short-term investments with original maturity dates of 90 days or less, which are subject to insignificant risks
of changes in value.



| | 4.1.2 | Financial assets
| | ----- | ----------------



The Company classifies its financial assets
in the following categories:



| | a) | Financial assets measured at fair value through profit or loss
| | -- | --------------------------------------------------------------



Financial assets at fair value through profit
or loss are financial assets held for trading and financial assets designated at the time of the initial recognition at fair value
through profit or loss. Financial assets are classified as held for trading if they are acquired to be sold or repurchased in the
short term. Financial assets at fair value through profit or loss are carried at fair value with net changes in fair value recognized
in the statement of profit or loss.



| | b) | Financial assets measured at fair value with changes in other comprehensive income
| | -- | ----------------------------------------------------------------------------------



These are equity instruments of other non-controlled
and non-strategic companies not allowing for any type of control or material influence thereon and where the Company management
is not intended to negotiate with them in the short-term. These instruments are recognized for their fair value and unrealized
losses or gains are recognized in other comprehensive income. The sales revenues received by these equity instruments are recognized
as financial sales revenues in the period results.





F-19


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




At the time of sale or recognition of losses
for impairment in its value, the cumulative adjustment for valuation in the other comprehensive income and the profit or loss in
sale are recognized in the statement of profit or loss.



| | c) | Loans and receivables
| | -- | ---------------------



Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are classified as current,
except when their maturity is longer than twelve months as of the date of the statement of financial position, in which case they
are classified as non-current. Loans and receivables, including trade and other receivables, are initially measured at fair value
and subsequently at amortized cost using the effective interest rate method, less impairment.



Loans to employees are initially recognized
using the present value of the future cash flows, discounted at the current market rate for similar loans. If the interest rate
is less than the current market rate, fair value will be less than the amount of the loan. This difference is recorded as a benefit
to employees.



| | 4.1.3 | Financial liabilities
| | ----- | ---------------------



Financial liabilities correspond to the financing
obtained by the Company through bank credit facilities and bonds, accounts payable to suppliers and creditors.



Bank credit facilities and bonds are initially
recognized at their fair value, net of transactions costs incurred. The difference between the amount received and its nominal
value is recognized in the results of the period during the time of amortization of the financial obligation, using the effective
interest rate method. The effective interest method amortization is included as financial expense in the statement of profit or
loss.



Accounts payable to suppliers and creditors
are short term financial liabilities recorded at their nominal value, which does not differ significantly from their fair value.



A financial liability is derecognized when
the obligation under the liability is discharged or cancelled expires. When an existing financial liability is replaced by another
from the same lender, on substantially different terms, or the terms of an existing liability are substantially modified such an
exchange or modification is treated as the derecognition of the original liability and the recognized as a new liability. The difference
in the respective carrying amounts is recognized in the statement of profit or loss.



| | 4.1.4 | Derivative financial instruments and hedging activities
| | ----- | -------------------------------------------------------



Financial derivative instruments are initially
recognized in the statement of financial position as assets or liabilities and are measured at fair value on the date the derivative
is entered into and are subsequently measured at fair value. Changes in the fair value of derivatives are recognized as gain or
loss in the statement of profit or loss, except for the effective portion of cash flow hedges, which is recognize in other comprehensive
income and later reclassified to profit or loss when the hedge item affects profit or loss.



The profit or loss of derivative contracts,
neither qualified nor designated as hedges, including forward sale and purchase contracts of commodities in trading for delivery
or physical receiving of the commodity are registered in profit or loss.



Embedded derivatives in contracts that do not
yet require being recognized at fair value and that are not directly related to the host contract in terms of economics characteristics
and risks are separated from their host contract and recognized at fair value; associated gains and losses are recognized in profit
or loss.





F-20


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 4.1.5 | Hedging operations
| | ----- | ------------------



For purpose of hedge accounting, hedges are
classified as:



| | § | Fair value hedges, when hedging the exposure to changes in fair value of a recognized asset or
liability, or an unrecognized firm commitment, or an identifiable portion of such asset, liability or firm commitment.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | § | Cash flow hedges when hedging of the exposure to variability in cash flows that is either attributable
to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | § | Hedges of a net investment in a foreign operation.
| | - | --------------------------------------------------



At the inception of a hedge relationship, the
Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, including the relationship
between the hedging instrument and the hedged item, the risk management objectives and strategy to perform hedging transactions.
Furthermore, such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are
assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods
for which they were designated.



Hedging instruments are classified as non-current
assets or liabilities when their expiration is more than 12 months from the statement of financial position date, otherwise they
are classified as current assets or liabilities.



| | 4.1.5.1 | Cash flow hedge
| | ------- | ---------------



The effective portion of the gain or loss on
the hedging instrument is recognized in other comprehensive income, while any ineffective portion is recognized in the statement
of profit or loss, in the net financial results line item.



The amounts previously recognized in other
comprehensive income are transferred to profit or loss. When the hedged item is a non-financial asset or liability, the amounts
previously recognized in other comprehensive income are transferred and included in the initial carrying amount of the cost of
the non-financial asset or liability.



If the hedging instrument expires or is sold,
terminated or exercised without replacement or rollover, or if it designation as a hedge is revoked or when the hedge no longer
meets the criteria for hedge accounting, any cumulative gain or loss previously recognized in other comprehensive income remains
separately in equity until the transaction is recognized in profit or loss. When it is no longer expected that the initially hedged
transaction occurs, any profit or loss accumulated in equity is immediately recognized in profit or loss.

Ecopetrol designates long term loans as hedging
instrument for their exposure to the exchange risk in future oil exports. See Note 31 for further information.



| | 4.1.5.2 | Hedge of a net investment in a foreign operation
| | ------- | ------------------------------------------------



Hedges of net investment in a foreign operation
are accounted for in a way similar to the cash flow hedges.



Gains or losses on of the hedging instrument
related to the effective portion of the hedge are	 recognized in other comprehensive income, while any gains or losses relating
to the ineffective portion are recognized in the statement profit or loss. Cumulative gains or losses recorded in equity is transferred
to profit or loss when the foreign subsidiary is partially or totally disposed of.





F-21


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Ecopetrol
uses long term loans as a hedge of its exposure to foreign exchange risk on its investment in subsidiaries whose functional currency
is the U.S. dollar. See Note 31 for further information.



| | 4.2 | Inventories
| | --- | -----------



Inventories are stated at the lower of cost
and net realizable value.



Inventories mainly comprise crude oil, fuels
and petrochemicals and consumable inventories (spares and supplies).p



The cost of crude oil is the production costs,
including transportation costs.



The crude required to bring the pipeline into
working order, is treated as part of the related pipeline.



The cost of other inventories is determined
based on the weighted average method, which includes acquisition costs (deducting commercial discounts, rebates and other similar
items), transformation, and other costs incurred to bring inventory to their current location and condition, such as transportation
costs.



Consumable inventories (spares and supplies)
are recognized as inventory and then charged to expense, maintenance or project to the extent that such items are consumed.



Ecopetrol estimates
the net realizable value of inventories at the end of the period. When the circumstances that previously caused inventories to
be written down below cost no longer exist, or when there is clear evidence of an increase in the net realizable value because
of a change in economic circumstances, the amount of the write-down is reversed. The reversal
cannot be greater than the amount of the original write-down, so that the new carrying amount will always be the lower of the cost
and the revised net realizable value.



| | 4.3 | Related parties
| | --- | ---------------



Related parties are considered those in which
one party has the ability to control, or has joint control of the other, or exercises significant influence over the other party
in making financial or operational decisions, or is a member of key management personnel (or close relative of a member). The Company
has considered as related parties, associates, joint ventures, key management, entities managing resources for payment of employee
post-employment benefit plans, and some relevant transactions with Colombian government entities, such as the purchase of hydrocarbons
and the fuel price stabilization fund. See note 4.16.



| | 4.3.1 | Investments in associates
| | ----- | -------------------------



An associate is an entity over which the Group
has significant influence but not control. Significant influence is the power to participate in the financial and operating policy
decisions of the investee, but is not control or joint control over those policies. Generally, these entities are those in which
an equity interest is maintained from 20% to 50% of the voting rights. See Exhibit I - Consolidated companies, associates and joint
ventures for further details..



Investments in associates are accounted for
using the equity method. Under the equity method, the investment in an associate is initially recognized at cost. The carrying
amount of investment in associates includes goodwill identified on acquisition, which is not tested for impairment separately.





F-22


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The Company's share of the results of operations
of the associate is recognized in the consolidated statement of profit or loss. Any changes in other comprehensive income of the
associates is recognized in the Company’s other comprehensive income.



After application of the equity method, the
Company determines if it is necessary to recognize an impairment loss on its investment in its associate. At each reporting date,
the Company determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence,
the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying
value, and then recognizes the loss in the statement of profit or loss.



When necessary, the Company makes adjustments
to the accounting policies of associates to ensure consistency with the policies adopted by the Company. In addition, the equity
method of these companies is measured on their most recent financial statements.



| | 4.3.2 | Joint ventures
| | ----- | --------------



A joint venture is a joint arrangement whereby
two or more parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control
exists only when decisions about the relevant activities require unanimous consent of the parties sharing such control. The accounting
treatment for the recognition of joint ventures is the same as investments in associates.



| | 4.4 | Joint operations
| | --- | ----------------



A joint operation is a type of joint arrangement
whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating
to the arrangement.



Joint operation contracts are entered into
between Ecopetrol and third parties in order to share risk, secure capital, maximize operating efficiency and optimize the recovery
of reserves. In these joint operations, one party is designated as the operator to execute the expense and investment budget and
report to partners according to their participation interests. Furthermore, each party takes its share of the hydrocarbons (crude
oil or gas) produced according to their production share.



When Ecopetrol participates as a non-operator
partner, it records the assets, liabilities, sales revenues, costs and expenses based on the operators' report. When Ecopetrol
is the direct operator of the joint venture contracts, it records its percentage of the assets, liabilities, sales revenues, costs
and expenses, based on each partner’s participation interests in the items corresponding to assets, liabilities, expenses,
costs and sales revenues.



| | 4.5 | Non-current assets held for sale
| | --- | --------------------------------



Non-current assets are classified as held for
sale if their carrying values will be recovered principally through a sale transaction rather than through continued use. Non-current
assets are classified as held for sale only when the sale is highly probable within one year from the date of classification and
the asset (or group of assets) is available for immediate sale in its present condition. These assets are measured at the lower
of their carrying amount and fair value less related disposal costs.





F-23


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 4.6 | Property, plant and equipment
| | --- | -----------------------------



Recognition and measurement



Property, plant and equipment are stated at
cost less accumulated depreciation and accumulated impairment losses. Tangible components related to natural and environmental
resources are part of property, plant and equipment.



The initial cost of an assets comprises its
purchase price or construction cost, including import duties and non-refundable purchase taxes, any costs directly attributable
to bringing the asset into operation, costs of employee benefits arising directly from the construction or acquisition, borrowing
costs incurred that are attributable to the acquisition and construction of qualifying assets and the initial estimate of the costs
of dismantling and abandonment of the item.



Spare parts and servicing equipment are recorded
as inventories and recognized as an expense as they are used. Major spare parts and stand-by equipment that the entity expects
to use during more than one period are recognized as property, plant and equipment.



Any gain or loss arising from the disposal
of a property, plant and equipment item is recognized in profit or loss of the period.



Subsequent disbursements



They correspond to all payments to be made
on existing assets in order to increase or extend the initial expected useful life, increase productivity or productive efficiency,
allow for significant reduction of operating costs, increase the level of reserves in exploration or production areas or replace
a part or component of an asset that is considered critical for the operation.



The costs of repair, conservation and maintenance
of a day to day nature are expensed when incurred. However, disbursements related to major maintenance are capitalized.



Depreciation



Property, plant and equipment is depreciated
using the straight-line method, except for those associated with exploration and production activities which are depreciated using
the units-of-production method. Technical useful lives are updated annually considering factors such as: additions or improvements
(due to parts replacement or critical components for the asset’s operation), technological advances, obsolescence and other
factors; the effect of this change is recognized from the period in which it was executed. Depreciation of an asset starts when
it is ready to be used.



Useful lives are determined based on the period
over which an asset is expected to be available for use, physical exhaustion, technical or commercial obsolescence and legal limits
or restrictions over the use of the asset.



The estimated useful life are as follows:



|Plant and equipment       | 7 - 56 years 
|------------------------- | -------------
|Ducts, networks and lines | 10 - 53 years
|Buildings                 | 19 - 72 years
|Other                     | 3 - 38 years 



Land is recorded separately from buildings
and facilities and they are not subject to depreciation.



Depreciation methods and useful lives are reviewed
annually and adjusted if appropriate.





F-24


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 4.7 | Natural and environmental resources
| | --- | -----------------------------------



Recognition and measurement



Ecopetrol uses the successful efforts method
to account for exploration and production of crude oil and gas activities, following the provisions of IFRS 6 – Exploration
for the evaluation of mineral resources.



Exploration costs



Acquisition and exploration costs are recorded
as exploration and evaluation assets until the determination of whether the exploration drilling is successful or not; if determined
to be unsuccessful, all costs incurred are recognized as expenses in the statement of profit or loss.



Exploration costs are those incurred with the
objective of identifying areas that are considered to have prospects of containing oil and gas reserves, including geological and
geophysical, seismic costs, viability, and others, which are recognized as expenses when incurred. Furthermore, disbursements associated
with the drilling of exploratory wells and those related to stratigraphic wells of an exploratory nature are charged as assets
until it is determined if they are commercially viable; otherwise, they are expensed in the profit or loss as as dry wells expense.
Other expenditures are recognized as expenses when incurred.



An exploration and evaluation asset shall no
longer be classified as such when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
Exploration and evaluation assets shall be assessed for impairment, and any impairment loss recognised, before reclassification.



All capitalized costs are subjected to technical
and commercial revisions at least once a year to confirm continuity to develop and produce such fields; otherwise, these costs
are transferred to profit or loss.



Exploration costs are net of the revenues obtained
from the sale of crude oil during the extensive testing period, net of cost of sales, since they are considered necessary to complete
the asset.



Development Costs



Development costs correspond to those costs
incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing. When a
project is approved for development, the accumulated acquisition and exploration costs is classified as natural and environmental
resources and costs subsequent to the exploration phase are capitalized as development costs of the properties that contain such
natural resources. All development costs are capitalized, including drilling costs of unsuccessful development wells.



Production costs



Production costs are those incurred to operate
and maintain productive wells, and are part of the corresponding equipment and facilities. The production activity includes extraction
of oil and gas to the surface, its gathering, treatment and processing as well as storage in the field. Production costs are expenses
in profit and loss as incurred unless they add oil and gas reserves, in which case they are capitalized.



Production and support equipment is recognized
at cost and is part of property, plant and equipment subject to depreciation.



Capitalized costs also include decommissioning,
dismantling, retiring and restoration costs, as well as the estimated cost of future environmental obligations. The estimation
includes plugging and abandonment costs, facility dismantling and environmental recovery of areas and wells. Changes arising in
new abandonment liability estimations and environmental remediation are capitalized in the carrying amount of the related asset.





F-25


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Depletion



Depletion of natural and environmental resources
is determined using the unit-of-production method per field, using proved developed reserves as a base. Amortization factors are
reviewed annually, based on the reserve report and the impact of changes of such factors on the amortization is recognized prospectively
in the financial statements.



Reserves are audited by internationally recognized
external consultants and approved by the Company’s Board of Directors. Proved reserves consist of the estimated quantities
of crude oil and natural gas demonstrated with reasonable certainty by geological and engineering data to be recoverable in future
years from known reserves under existing economic and operating conditions, that is, at the prices and costs that apply at the
date of the estimation.



Impairment



Assets associated to exploration, evaluation
and production are subject to review for possible impairment in their recoverable amount. See notes 3.2 – Asset impairment
(recovery) and 4.12 - Impairment in the value of assets.



| | 4.8 | Capitalization of borrowing costs
| | --- | ---------------------------------



Borrowing
costs related to the acquisition, construction or production of a qualifying asset that requires a substantial period of time to
get ready for its intended use are capitalized as part of the cost of such asset when it is probable that future economic benefits
associated with the item will flow to the Company and costs can be measured reliably. Other borrowing costs are recognized as finance
costs in the period in which they are incurred. Projects that have been suspended but that the Company intends to continue pursue
their developing in the future, are not considered qualifying assets for the purpose of capitalization of borrowing costs.



| | 4.9 | Intangibles assets
| | --- | ------------------



Intangible assets with a defined useful life,
which were acquired separately, are stated at cost less accumulated amortization and any impairment loss. Intangible assets are
amortized under the straight line method, over their estimated useful lives. The estimated useful lives and amortization method
are revised at the end of each reporting period; any change in the estimates is recognized on a prospective basis.



The disbursements in relation to research activities
are expensed as incurred.



| | 4.10 | Goodwill
| | ---- | --------



Goodwill is initially measured at cost (being
the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous
interest held over the net identifiable assets acquired and liabilities assumed). After initial recognition goodwill is measured
at cost less any accumulated impairment loss. Goodwill is not amortized but annually tested for impairment.



| | 4.11 | Leases
| | ---- | ------



Leases are classified as finance leases whenever
the terms of the lease transfer substantially all the risks and rewards of ownership. All other leases are classified as operating
leases.



Assets held under finance leases, when Ecopetrol
is the lessee, are recognized in the statement of financial position at an amount equal to the fair value of the leased asset or,
if lower, the present value of the minimum lease payment. These assets are depreciated over the asset's useful life. When there
is no reasonable certainty that the company will obtain ownership of the asset at the end of the contract, the leased assets are
depreciated in the shortest period between the asset estimated useful life and the lease term.





F-26


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The corresponding liability to the lessor is
included in the consolidated statement of financial position as a finance lease obligation, in the loans and financing line item.



Lease payments are apportioned between financial
charges and reduction of lease liabilities in order to achieve a constant rate of interest on the liability remaining balance.
Interest expenses are recognized immediately in the statement of profit or loss.



Operating lease payments are recognized as
an expense on a straight-line basis over the lease term, except where another systematic prorating basis is more representative
of the time pattern of economic benefits from the lease. Contingent rentals arising under operating leases are recognized as an
expense in the period in which they are incurred.



| | 4.12 | Impairment in the value of assets
| | ---- | ---------------------------------



In order to evaluate the recoverable amount
of tangible and intangible assets, Ecopetrol compares the carrying amount with its recoverable amount at the end of each reporting
period or earlier, if there is any indicator that an asset may be impaired.



In order to make an impairment analysis, the
assets are grouped into cash generating units (CGU), provided that those assets individually considered do not generate cash inflows
that, to a greater extent, are independent from those generated by other assets or CGUs. The group of assets in different CGUs
requires the exercise of professional judgment and the consideration, among other parameters, of the business segments. In this
sense, in the segment of Exploration and Production, each CGU corresponds to each one of the different contractual areas commonly
called “fields”; by exception, in those cases in which the cash inflows generated by several fields are interdependent
on each other, those fields are grouped into a single CGU. In the case of the Refining and Petrochemicals segment, the CGU ́s
correspond to each one of the refineries of the group and for the segment of Transportation each pipeline is taken as an independent
CGU.



The recoverable amount of the asset is the
higher of the fair value less costs of disposal or its value in use. If the recoverable amount of an asset (or of a CGU) is lower
than its net carrying amount, such amount (or that of the CGU) is reduced to its recoverable amount, recognizing a loss for impairment
of value in the results of the period.



The fair value less costs of disposal will
be greater than the value in use for the asset’s production segment due to use of the value in use methodology has some significant
restrictions included in future cash flows, as the following: a) future capital expenses that improve the CGU performance, which
could result in expected increase of net cash flows, and b) items before taxes that reflect specific business risks, resulting
on a higher discount rate.. The recoverable amount of assets in the business segments is the highest between the fair value less
costs of disposal and value in use.



The fair value less costs of disposal is determined
as the sum of the future discounted cash flows adjusted to the estimated risk. The estimations of future cash flows used in the
evaluation of impairment of assets are made with projections of commodity prices, supply and demand estimations and the margins
of the products. In case of assets or cash generating units engaged in the evaluation and exploration of reserves, proved, probable
and possible reserves are considered, with a risk factor associated to them also being considered.



The calculations are verified with valuation
multiples, quoted prices of stock in companies comparable to Ecopetrol.



Once a loss for impairment of value has been
recorded, future amortization expense is calculated on the basis of the adjusted recoverable amount. Impairment losses may be reversed
only if the reversal is related to a change in estimations used after the loss for impairment was recognized. These reversals shall
not exceed the carrying amount of the assets net of depreciation or amortization that would have been determined if neither the
impairment had ever been recognized, nor the recoverable amount on the date of assessment of the impairment.





F-27


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




In the reclassification of any non-current
asset to assets held-for-sale, the carrying amount of these assets is revised to its fair value less costs of disposal. No other
provision for depreciation, depletion or amortization is recorded if the fair value less costs of disposal is lower than the carrying
amount.



| | 4.13 | Provisions and contingent liabilities
| | ---- | -------------------------------------



Provisions are recognized when Ecopetrol has
a current obligation (legal or implied) as a result of a past event, it is probable that Ecopetrol will be required to settle the
obligation, and a reliable estimation can be made of the amount of the obligation. Where applicable, they are recorded at present
value, using a rate reflecting the liability specific risk.



Disbursements related to the conservation of
the environment for current or future operations, are accounted for as expenses or assets, as the case may be. Disbursements related
to operations of the past that do not contribute to the obtaining of current or future income, are charged to expenses.



The creation of these provisions coincides
with the identification of an obligation related to environmental remediation and Ecopetrol has adequate information to determine
a reasonable estimation of the related cost.



Contingent liabilities are not recognized but
are subject to disclosure in the explanatory Notes whenever the outflow of resources is possible; including those which values
cannot be estimated.



Whenever expected that the provision is reimbursed,
either in whole or in part, for example by virtue of an insurance contract, the reimbursement is recognized as a separate asset
only in cases in which such reimbursement is almost certain. The expense corresponding to any provision is presented in the profit
or loss statement in the line that best reflects the nature of the provision, net of any related reimbursement, to the extent that
it is almost certain.



If the effect of the time value of money is
significant, the provisions are discounted using the current market rate before taxes reflecting, as applicable, the liability
specific risks. When recognizing the discount, the increase of the provision resulting from time elapsed is recognized as financial
cost in the profit or loss statement.



Asset retirement obligation



Liabilities associated to the retirement of
assets are recognized when there are current obligations, either legal or implied, related to the abandonment and dismantling of
wells, facilities, pipelines, buildings and equipment. The obligation is usually acquired when the assets are installed or the
surface or the environment are altered at the operating sites. These liabilities are recognized using the discounted cash flow
method, at all rate before taxes reflecting current market evaluations of a similar risk liability and considering the economic
limits of the field or the useful life of the respective asset. When it is not possible to determine a reliable estimation in the
period in which the obligation originates, a provision is recognized when there is sufficient information available to make the
best estimation.



The
carrying amount of the provision is reviewed and adjusted annually considering changes in the variables used for its estimation,
using a rate that reflects the liability specific risk. Any change in the present value of the estimated expenditure is reflected
as an adjustment to the provision and the corresponding property, plant and equipment and natural and environmental resources.
When a decrease in the asset retirement obligation related to a producing asset exceeds the carrying amount of the asset, the excess
is recognised the Consolidated statement of profit or loss. The financial cost of updating these liabilities is recognized in results
for the period as financial expense.

F-28


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 4.14 | Income tax and other taxes
| | ---- | --------------------------



Income tax expense is comprised of income tax
payable for the period (including, income tax and income tax for equality - CREE, as appropriate) and the effect of deferred taxes
in each period.



Current income taxes are recognized in income
except when they relate to items recognized in other comprehensive income, in which case the tax is recognized in equity. Income
tax assets and liabilities are presented separately in the Consolidated Statement of Financial Position except where there is a
right of set-off within fiscal jurisdictions and an intention to settle such balances on a net basis.



| | 4.14.1 | Current income tax
| | ------ | ------------------



The Company determines the provision for income
tax based on the highest amount between taxable income and presumptive income (the minimum estimated amount of taxable profit on
which the law expects to quantify and collect the income tax). Taxable income differs from profit before tax as reported in the
consolidated statement of profit or loss, because of: items of income or expense that are taxable or deductible in other periods,
special taxable deductions, tax losses and income and line items measured that, according to applicable tax laws in each jurisdiction,
are considered nontaxable or nondeductible.



| | 4.14.2 | Deferred income tax
| | ------ | -------------------



Deferred tax is accounted for according to
the liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences
between the carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax
bases. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for all
deductible temporary differences and for all tax losses to be amortized, insofar as there is a reasonable expectation that the
Company will have future tax profits with which it may offset such temporary differences.



Deferred taxes on assets and liabilities are
calculated based on tax rates that will be applied to taxable income during the years in which temporary differences between the
carrying amounts and tax bases are expected to be reversed.



The carrying amount of a deferred tax asset
is subject to review at the end of each reporting period and it is reduced to the extent it is estimated probable that there will
not be enough future taxable profit that allows the total or partial recovery of the asset.



Consolidated deferred tax, is calculated as
the sum of the deferred tax in the individual financial statements of the companies of the Ecopetrol Business Group adjusted by
deferred taxes on business combinations, inter-company transactions or other adjustments at a consolidated level.



Deferred taxes are not recognized when they
arise in the initial recognition of an asset or liability in a transaction (except in a business combination) and at the time of
the transaction, does not affect the accounting or tax profit, or in respect of the taxes on the possible future distribution of
accumulated profits of subsidiaries or investments accounted for by the equity method, if at the time of the distribution it may
be controlled by Ecopetrol and it is probable that the retained earnings will be reinvested by the Group companies and, therefore,
will not be distributed to Ecopetrol.



| | 4.14.3 | Other taxes
| | ------ | -----------



The Company recognizes in profit or loss the
costs and expenses related to other taxes than the income tax, such as the wealth tax, which is determined based on the tax equity,
the industry and commerce tax on income obtained in the municipalities for performance of commercial, industrial and service activities,
and the transport tax on volumes loaded in the transport systems. Taxes are calculated in accordance with current tax regulations.
For more details, see Note 10.





F-29


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 4.15 | Employee benefits
| | ---- | -----------------



Salaries and benefits for Ecopetrol staff are
governed by the Collective Labor (Agreement 01 of 1977), and, by the Substantive Labor Code. In addition to the legally mandated
benefits, employees are entitled to fringe benefits which are subject to the place of work, type of work, length of service, and
basic salary. An annual interest of 12% is recognized on accumulated severance amounts for each employee, and the payment of compensations
is provided for when special circumstances arise resulting in the non-voluntary termination of the contract, without just cause,
and in periods other than the probationary period.



Ecopetrol belonged to the special pension regime
under which allowances are a Company’s responsibility and not a Pension Fund’s responsibility. However, Law 797 of
January 29, 2003 and Legislative Act 001 of 2005 determined that Ecopetrol will no longer belong to said regime and that from thereon
employees would be part of the General Pension Regime. Consequently, allowances for employees pensioned until July 31, 2010 are
still Ecopetrol’s responsibility. Likewise, these employees are entitled to such pension bonus if they worked with Ecopetrol
prior to January 29, 2003, but whose labor agreement expired without renewal before that date.



All labor benefits of employees who joined
the Company before 1990 are Ecopetrol’s responsibility, without the involvement of any social security entity or institution.
The cost of health services for the employee and his/her relatives registered with the Company is determined by means of a mortality
table, prepared based on facts occurring during the year.



For employees who joined the Company subsequent
to the entry into effect of Act 50 of 1990, the Company makes periodic contributions for severance payments, pensions and labor
risks to the respective funds.



In 2008, Ecopetrol partially commuted the value
corresponding to monthly pension payments from its pension liabilities, transferring such liabilities and their underlying amounts
to pension-related autonomous equities (PAP, for its acronym in Spanish). The funds transferred, and returns on those funds, cannot
be redirected nor they can be returned to the Company until all of the pension obligations have been fulfilled. The commuted obligation
covers allowances and pension bonds payments; while health and education remains under the labor liability in charge of Ecopetrol.



Employee-benefits are divided into four groups
comprised as follows:



| | a) | Short-term employee benefits and post-employment defined benefits
| | -- | -----------------------------------------------------------------



Benefits to employees in the short term mainly
correspond to those which payment will be made in the term of twelve months following the closing of the period in which the employees
have rendered their services. These mainly include salaries, severance payments, vacation, bonuses and other benefits.



Post-employment benefits of defined contributions
correspond to the periodic payments for severance, pensions and labor risk payments that the Company makes to the respective funds
that assume these obligations in their entirety.



The above benefits are recognized as an expense
with an associated liability after deducting any already paid amounts.





F-30


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | b) | Post-employment defined benefit plans
| | -- | -------------------------------------



In the defined benefits plan, the Company provides
the benefits agreed to current and former employees and assumes the actuarial and investment risks.



The following benefits are classified as long-term
defined benefit plans recognized in the financial statements according to the calculations of an independent actuary:



| | · | Pensions
| | - | --------

| | · | Pension bonds
| | - | -------------

| | · | Health
| | - | ------

| | · | Educational plan
| | - | ----------------

| | · | Retroactive severances
| | - | ----------------------



Liabilities recognized in the statement of
financial position in respect of these benefit plans are the present value of the defined benefit obligation at the date of the
statement of financial position, less the fair value of plan assets.



The defined benefit obligation is calculated
annually by independent actuaries using the projected credit unit method, which takes into account employees’ years of service
and, for pensions, average or final pensionable remuneration. This obligation is discounted at its present value using interest
rates of high-quality government bonds denominated in the currency in which the benefits will be paid and of a duration consistent
with the plan obligations.



These actuarial calculations involve several
assumptions that could differ from the events that will effectively take place in the future. Said assumptions include the determination
of the discount rate, future salary increases, mortality rates and future pension increase. Because of the complexity of the calculation,
the underlying assumptions and long-term nature of these plans, the obligations for defined benefits are extremely sensitive to
changes in assumptions. All key variables are revised at the close of the reported period.



When determining the appropriate discount rate,
in absence of a broad high quality bond market, Management considers interest rates corresponding to the class B TES bonds issued
by the Colombian Government as its best reference, at an appropriate discount rate with maturities extrapolated in line with the
term expected for each benefit plan. The mortality rate is based on the particular country’s rate, which latest version is
the RV08 mortality table published in resolution 1555 of October 2010. The future salary and pension increases are linked to the
country's future inflation rates. Note 22 - Provisions for employee benefits provides further details on key assumptions used.



The amounts recognized in profit or loss related
to employees defined benefit plans are comprised mainly by service cost and the net interest. Service cost includes mainly the
increase in present value of the benefit obligation during the period (current service cost) and the amount resulting from a new
benefit plan. Plan amendments corresponds to changes in benefits and are usually recognized when all legal and regulatory approvals
have been obtained and the effects have been conveyed to the employees involved. The net interest is calculated using the net liability
for defined benefits as compared with the yield curve of the discount rate at the beginning of each year for each plan. The net
defined benefit liability or asset resulting from actuarial profits and losses, the asset ceiling effect and the asset profitability,
excluding the value of recognized in the profit or loss, are recognized in other comprehensive income.



There is no service cost for the pension plan
of employees because in their capacity as pensioners there is no service time to which the pension benefit can be charged; in other
words, the benefit is 100% cost and is not in the cumulative stage.



When the plan assets exceed the gross obligation,
the recognized asset is limited to the lower of the surplus in the defined benefits plan and the ceiling of assets determined using
a discount rate based on Colombian Government bonds.





F-31


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | c) | Other long term benefits
| | -- | ------------------------



Other long-term benefit is the five-year term
bonus which also considered in the actuarial calculation. This benefit is a cash bond that accumulates annually and is paid every
five years to employees. The Company recognizes in profit or loss the service cost, the net financial cost and the adjustment to
the obligation of the defined benefit plan.



| | d) | Termination benefits
| | -- | --------------------



Termination
benefits are recognized only when a detailed plan exists for such process and there is no possibility to withdraw the offer. The
Company recognizes a liability and an expense for termination benefits at the earliest date between the date when the offer of
such benefits cannot be withdrawn and the date when the restructuring costs are recognized.



| | 4.16 | Sales revenue recognition
| | ---- | -------------------------



Sales revenue from crude oil and natural gas
sales is recognized at the time of transfer of title to the buyer, including risks and rewards of ownership. In the case of refined
and petrochemical products, sales revenue is recognized when products are shipped by the refinery and subsequently adjusted in
accordance with price changes when dealing with regulated price products. Sales revenue from transportation services is recognized
when products are transported and delivered to the buyer in accordance with sale terms. In all other cases, sales revenue is recognized
at the time it is earned and a true, probable and quantifiable right to demand its payment arises.



Under current regulations, Ecopetrol and Refinería
de Cartagena S.A., sell regular gasoline and mid-distillates at a regulated price.



In accordance with Decree 1068 of 2015, the
Ministry of Mines and Energy calculates semi-annually and settles Ecopetrol’s net position to be stabilized for each fuel
by the Fuel Price Stabilization Fund (FEPC, for its acronym in Spanish). The net position is calculated by adding all differentials
throughout the six-month period and the result is an amount in Colombian pesos in favor of the Company and chargeable to the FEPC.
The differential is calculated as the volume reported by the Company at the time of sale multiplied by the difference between the
international parity price and the regulated price. The international parity price is the daily price of gasoline and diesel oil
of the respective month in Colombian pesos, indexed to the United States of America Gulf market, calculated in accordance with
Resolution 18 0522 of 2010 and the Producer Price reference defined by the Ministry of Mines and Energy. Therefore, this difference
represents a higher or lower value of sale sales revenues for Ecopetrol and Refinería de Cartagena S.A.



| | 4.17 | Costs and expenses
| | ---- | ------------------



Costs and expenses are presented according
to their nature; they are detailed in the related disclosures in cost of sales, and administrative, operating, projects and other
associated expenses.



| | 4.18 | Financial income (expenses)
| | ---- | ---------------------------



The financial income and expenses include mainly:
a) cost of interest on loans and financing, except for those that are capitalized as part of the asset cost, b) valuation of profits
and losses of financial instruments measured at fair value with changes in profit or loss, c) exchange differences of financial
assets and liabilities, except for debt instruments designated as hedging instruments, d) expenses for financial updating of long
term liabilities (abandonment costs and pension liabilities), e) dividends derived from equity instruments measured at fair value
with changes in other comprehensive income.





F-32


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 4.19 | Information by business segment
| | ---- | -------------------------------



Ecopetrol presents the respective disclosures
relative to its business segments in its consolidated financial statements in accordance with paragraph 4 of IFRS 8 - Operation
segments.



The operation of the Ecopetrol Business Group
is performed through three business segments: 1) Exploration and production, 2) Transport and logistics, and 3) Refining, petrochemical
and biofuels. This segmentation is based on management of objectives and corporate strategic plan, considering that these businesses:
(a) are engaged in differential commercial activities, which generate sales revenues and incur costs and expenses; (b) the operational
results are revised regularly by the Group's Governance that makes operational decisions to allocate resources to the various segments
and assess their performance; and (c) there is differentiated financial information available. Internal transfers represent sales
to inter-company segments and are registered and presented at market prices.



| | 1) | Exploration and production. This segment includes activities related to the exploration
and production of oil and gas. Sales revenues are derived from sales of oil and natural gas at market prices to other segments
and to third parties (domestic and foreign distributors). Costs include costs incurred in production. Expenses include all exploration
costs that are not capitalized.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) | Transport and logistics- This segment includes sales revenues and costs associated with
the transport and distribution of hydrocarbons, derivatives and products operation.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | Refining and petrochemicals- This segment mainly includes activities performed at the Barrancabermeja
and Cartagena refineries, where crude from production fields is transformed. The sales revenues from products are realized to other
segments and domestic and foreign customers and include refined and petrochemical products at market prices and some fuels at regulated
price. This segment also includes industrial service sales to customers.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-33


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 5. | New standards issued by the IASB
| | -- | --------------------------------



The following rules, interpretations and amendments
issued by the IASB are applicable to yearly periods commencing on January 1, 2017 and thereon:



| | - | IFRS 9 "Financial Instruments" gathers all the phases of the financial instruments project
and will replace IAS 39 "Financial Instruments: Recognition and Measurement"; it is effective for annual periods starting
on January 1, 2018. IFRS 9 introduces new requirements of classification, measurement, impairment, derecognition and hedge accounting.
This standard does not require retroactive application or modify comparative information.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 15 "Sales revenues from Ordinary Activities in Contracts with Customers" and its
amendments provide a five-step model to measure sales revenues derived from contracts with customers. In accordance with IFRS 15,
the sales revenue is recognized as an amount reflecting the offsetting that an entity expects to be entitled to in exchange for
transferring goods or services to a customer. The principles of IFRS 15 suppose a more structured approach to value and register
sales revenues. A full or partial retroactive application is required for periods commencing on January 1, 2018. The Company plans
to adopt the new standard by using the modified retrospective method and keeps assessing its impact on the consolidated financial
statements.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This new standard is applicable to
all entities and will derogate all previous standards on sales revenue recognition.



| | - | IFRS 16 "Leases", which will be effective as of January 2019, with limited possibilities
for early implementation. It provides a comprehensible model for identification of lease agreements and their treatment in the
financial statements, both of lessees and lessors. Oil and gas companies must recognize more assets and liabilities, derived mostly
from rental of construction equipment and offices.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | Amendments to IFRS 10 and IAS 28: Asset sale or contribution between the investor and its associates
or joint ventures. The amendments address the conflict between I FRS 10 and IAS 28 as to the treatment of control loss of a subsidiary
that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the asset
sale or contribution that is a business, as defined in IFRS 3, between the investor and its associate or joint venture, is recognized
in its entirety. Any gain or loss resulting from an asset sale or contribution that is not a business; however, is recognized only
up to the interests of investors who are not related to the associate or joint venture. The effective date is still to be defined
by the IASB.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | Amendments to IAS 12:Recognition of Assets for Deferred Taxes for Unrealized Losses. These
amendments clarify how to register assets for deferred taxes corresponding to debt instruments measured at fair value. This rule
is effective for annual periods commencing on January 1, 2017.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ecopetrol is not expecting to adopt the aforementioned
standards before their date of implementation. The impact from these standards is being evaluated by Company Management, particularly
IFRS 16, which could affect the recognition of assets and liabilities in the financial situation statement, as well as the recognition
of lease charges in the profit or loss of the period.



There are no new or amended standards or interpretation
adopted in 2016 that had a material impact on the consolidated financial statements.



F-34


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 6. | Cash and cash equivalents
| | -- | -------------------------



The balance of cash and cash equivalents at December 31, 2016 and
2015 is comprised as follows:



|                       |  | 2016 |           |  | 2015 | 
|---------------------- |  | ---- | --------- |  | ---- | 
|Banks and corporations |  |      | 3,319,465 |  |      | 
|Short-term investments |  |      | 5,090,048 |  |      | 
|Cash                   |  |      | 954       |  |      | 
|                       |  |      | 8,410,467 |  |      | 



As of December 31, 2016, it includes restricted
cash for COP$114,206 (2015 - COP$108,348), intended for the exclusive payment of principal and interest on loans contracted by
Oleoducto Bicentenario and Oleoducto de los Llanos. The use of short-term financial investments depends on the liquidity requirements
of the Company.



The fair value of cash and cash equivalents
approximates their carrying amount due to their short-term nature and their high liquidity.



The average return on cash and cash equivalents
as of December 31, 2016 was 3.5% (2015 - 2.6%). The credit quality of issuers and counterparties in transactions involving cash
and cash equivalents is described in Note 31.3 – Credit risk.



| | 7. | Trade and other receivables, net
| | -- | --------------------------------



The balance of trade and other receivables, net of provision is
comprised as follows at December 31, 2016 and 2015:



|                                  |  | 2016 |           |  | 2015 | 
|--------------------------------- |  | ---- | --------- |  | ---- | 
|Current                           |  |      |           |  |      | 
|Customers                         |  |      |           |  |      | 
|Foreign                           |  |      | 1,366,322 |  |      | 
|Domestic                          |  |      | 1,180,577 |  |      | 
|Fuel price stabilization fund (1) |  |      | 1,203,811 |  |      | 
|Related parties (Note 32)         |  |      | 97,730    |  |      | 
|Industrial services               |  |      | 60,025    |  |      | 
|Employee loans (2)                |  |      | 42,407    |  |      | 
|Other                             |  |      | 261,829   |  |      | 
|Total current                     |  |      | 4,212,701 |  |      | 
|                                  |  |      |           |  |      | 
|Non-current                       |  |      |           |  |      | 
|Employee loans (2)                |  |      | 425,468   |  |      | 
|Related parties (Note 32)         |  |      | 170,121   |  |      | 
|Fuel price stabilization fund (1) |  |      | 77,510    |  |      | 
|Other                             |  |      | 56,311    |  |      | 
|Total non-current                 |  |      | 729,410   |  |      | 



| | (1) | Accounts receivable from
the Ministry of Finance and Public Credit, arising from regular motor gasoline and diesel price differentials pursuant to Resolution
180522 issued on March 29, 2010. The Ministry of Finance and Public Credit makes the payment based on the resolution for the net
liquidation position in favor of Ecopetrol of receivables for months with pending payments. During
the month of March 2017, the Company received COP$542,718 of this amount.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The administration, management and control of loans granted to employees by Ecopetrol were transferred
to Cavipetrol (“Corporación de los trabajadores de la Empresa Colombiana de Petróleos Ecopetrol S.A.”),
which manages the details per employee of such loans and their related conditions.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-35


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The following shows the changes in allowance
for doubtful accounts related to trade and other receivables, provisioned in full, at December 31:



|                                       |  | 2016 |         |   | 2015 | 
|-------------------------------------- |  | ---- | ------- | - | ---- | 
|Opening balance                        |  |      | 160,406 |   |      | 
|Additions (recovery) of allowances     |  |      | 19,438  |   |      | 
|Accounts receivable write-off and uses |  |      | (35,515 | ) |      | 
|Closing balance                        |  |      | 144,329 |   |      | 



| | 8. | Inventories, net
| | -- | ----------------



The balance of Inventories, net of a provision at December 31, 2016
and 2015 is comprised as follows:



|                                      |  | 2016 |           |  | 2015 | 
|------------------------------------- |  | ---- | --------- |  | ---- | 
|Crude                                 |  |      | 1,557,267 |  |      | 
|Fuels and petrochemicals              |  |      | 1,270,870 |  |      | 
|Materials for the production of goods |  |      | 1,013,764 |  |      | 
|Total                                 |  |      | 3,841,901 |  |      | 



The following shows a breakdown of the changes
in the provisions for inventories:



|                             |  | 2016 |         |   | 2015 | 
|---------------------------- |  | ---- | ------- | - | ---- | 
|Opening balance              |  |      | 198,539 |   |      | 
|Additions (recoveries), net  |  |      | 41,957  |   |      | 
|Foreign currency translation |  |      | 50,053  |   |      | 
|Uses                         |  |      | (25,114 | ) |      | 
|Closing balance              |  |      | 265,435 |   |      | 





F-36


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 9. | Other financial assets
| | -- | ----------------------



The balance of other financial assets at December 31, 2016 and 2015
is comprised as follows:



|                                                     |  |      |           |  |      | 
|---------------------------------------------------- |  | ---- | --------- |  | ---- | 
|                                                     |  | 2016 |           |  | 2015 | 
|Assets measured at fair value through profit or loss |  |      |           |  |      | 
|Investment portfolio – Local currency                |  |      | 2,519,311 |  |      | 
|Investment portfolio – Foreign currency              |  |      | 4,116,987 |  |      | 
|                                                     |  |      | 6,636,298 |  |      | 
|Assets measured at amortized cost                    |  |      | 4,152     |  |      | 
|Hedging instruments                                  |  |      | 46,445    |  |      | 
|Total                                                |  |      | 6,686,895 |  |      | 
|                                                     |  |      |           |  |      | 
|Current                                              |  |      | 5,315,537 |  |      | 
|Non-current                                          |  |      | 1,371,358 |  |      | 
|                                                     |  |      | 6,686,895 |  |      | 



The average return on investments in Colombian
pesos and US dollars portfolio was 8.1% (2015 - 5.5%) and 0.8% (2015 - 0.5%), respectively. The credit quality of issuers and counterparties
in transactions involving the other financial assets is described in Note 31.3 – Credit risk.



The fair value measured is recognized against
financial result (see note 30).



| | 9.1 | Restrictions
| | --- | ------------



As of December 31, 2016, no resource of the
investment portfolio was restricted. As of December 31, 2015, COP$699,832 related to the Santiago de las Atalayas process were
restricted.



On November 6, 2016, through the Ministries
of Mines and Energy and Finance and Public Credit the termination of Ecopetrol's condition as sequester in the process for nullity
and re-establishment of rights filed against the Comuneros de Santiago de las Atalayas was confirmed. In view of the foregoing,
the restricted resources related to this case belong to Ecopetrol (see Note 23.3 - Provisions and contingencies, for further information).



| | 9.2 | Maturity
| | --- | --------



The following are the maturities
of other financial assets at December 31, 2016 and 2015:



|             |  | 2016 |           |  | 2015 | 
|------------ |  | ---- | --------- |  | ---- | 
|Up to 1 year |  |      | 5,315,537 |  |      | 
|1 - 2 years  |  |      | 838,786   |  |      | 
|2 - 5 years  |  |      | 497,204   |  |      | 
|> 5 years    |  |      | 35,368    |  |      | 
|             |  |      | 6,686,895 |  |      | 



| | 9.3 | Fair value
| | --- | ----------



The classification of other financial assets
at fair value, corresponding to the investment portfolio is as follows at December 31, 2016 and 2015:



|        |  | 2016 |           |  | 2015 | 
|------- |  | ---- | --------- |  | ---- | 
|Level 1 |  |      | 25,066    |  |      | 
|Level 2 |  |      | 6,611,232 |  |      | 
|        |  |      | 6,636,298 |  |      | 





F-37


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




There were no transfers between hierarchy levels
during the years 2016 and 2015.



The securities comprising Ecopetrol's portfolio
are valued on a daily basis pursuant to the provisions issued by the Financial Superintendence of Colombia. To this end, the Company
uses the information provided by the entities authorized for this purpose, which collect data from active markets. For cases in
which market data is not available other directly or indirectly observable data is used.



For dollar-denominated investments the information
provider is Bloomberg while for investments denominated in pesos, Infovalmer, an entity authorized by the Financial Superintendence
of Colombia.



For the process of establishing levels of the
fair value for investments, in addition to the information used for valuation, other relevant aspects are also taken into account,
such as the issuer rating, investment rating and issuer risk analysis performed by Ecopetrol, thus making it possible to establish
the appropriate hierarchy level for investments.



| | 10. | Taxes
| | --- | -----



| | 10.1 | Current tax assets and tax liabilities
| | ---- | --------------------------------------



The balance at December 31, 2016 and 2015 of current tax assets
and tax liabilities is comprised as follows:



|                                                |  |      |           |  |      | 
|----------------------------------------------- |  | ---- | --------- |  | ---- | 
|                                                |  | 2016 |           |  | 2015 | 
|Current tax assets                              |  |      |           |  |      | 
|Income tax                                      |  |      | 308,868   |  |      | 
|Credit tax balance (1)                          |  |      | 598,140   |  |      | 
|Other taxes                                     |  |      | 222,090   |  |      | 
|Total                                           |  |      | 1,129,098 |  |      | 
|                                                |  |      |           |  |      | 
|                                                |  |      |           |  |      | 
|Current tax liabilities                         |  |      |           |  |      | 
|Income tax                                      |  |      | 1,478,294 |  |      | 
|National tax on gasoline and surtax on gasoline |  |      | 324,402   |  |      | 
|Other taxes (2)                                 |  |      | 328,244   |  |      | 
|Total                                           |  |      | 2,130,940 |  |      | 



| | (1) | Consists primarily of VAT balance in favor.
| | --- | -------------------------------------------



| | (2) | Consists primarily of the industry and commerce tax payable.
| | --- | ------------------------------------------------------------



Income tax asset is
related with prepayments made by the group companies which cannot be offset with the income tax liability because they are
generated by different companies.



| | 10.2 | Income tax
| | ---- | ----------



The current tax regulations
applicable to Ecopetrol for the taxable year 2016 establish that:



| | (a) | As of January 1, 2013 until December 31, 2016, taxable income in Colombia is taxed at 25% on
                                                                                                 account of income tax plus 9% as the surtax on income for equality-CREE, excluding tax payers who, based on
                                                                                                 specific provisions are subject to special rates and a 10% capital gains tax; the companies in the free trade
                                                                                                 zone                                                                                                  pay
                                                                                                 15%; and those not
                                                                                                 generating net income or net income that is lower than the presumptive rate declare over presumptive
                                                                                                 income at 3% on equity at beginning of the year.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-38


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




On December 23,
2014, through Law 1739, a surtax on income for equality - CREE was established for the years 2015, 2016, 2017 and 2018, which is
applicable for taxpayers with taxable base above COP$800 million, at rates of 5%, 6%, 8%
and 9% per year, respectively.



For
taxable year 2016, the Ecopetrol Group has companies that measure taxes at the ordinary income tax rate of 40%. Companies in
free trade zones are subject to tax at 15%, some have taxable income calculated based on presumptive income, as explained
above, and others with foreign income are taxed at the respective foreign income tax rates.



| | (b) | Regarding to current expense for income tax, as of December 31, 2016 and 2015, Bioenergy
                                                                                                 S.A., Bionergy Zona Franca and the Cartagena Refinery are companies that are part of the Ecopetrol Group and present tax
                                                                                                 losses carryforwards with a net value of COP$3,384,346 and COP$1,524,148, respectively, originated between 2009 and 2016. In
                                                                                                 accordance with current tax rules, tax losses incurred from the year 2007 can be offset, or tax adjusted, at any time, with
                                                                                                 future net taxable income without limitation. Corporation losses will not be transferred to the
                                                                                                 partners. However, in accordance with article 290 of Law 1819 of 2016, the tax losses accumulated up to December 21, 2016,
                                                                                                 which have not been offset, are subject for offsetting to the application of a formula contained in said article.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The impact of
tax losses in the Bioenergy and Bioenergy Zona Franca with respect to deferred tax is mentioned in this Note under the chapter
titled "Deferred Tax on Income".



Effective
for the year 2015, in accordance with that provided for in Law 1739 of December 2014, tax losses and minimal CREE base
surplus can be offset with future income originated in the income tax for equality - CREE, considering the same rules set out
for income and supplementary taxes. In accordance with article 290 of Law 1819 of 2016,
the presumptive income surplus and minimal base surplus generated before 2017 on income tax and CREE that have not been
offset, are subject for offsetting to the application of a formula contained in said article and subject to the term
established in article 189 of the Tax Code.



The Colombian government issued Law
1819 of 2016 (Structural Tax Reform), whereby it is established that companies can offset tax losses originated on or
after 2017 with ordinary net income to be obtained in the next twelve (12) taxable periods. Reficar and Bioenergy ZF, as they
entered into a legal stability agreement that included offsetting tax losses, do not have time limits and are not subject
to this restriction insofar as the contract is still in force.



Statute of limitation of review of tax
returns



Tax returns may be reviewed by the tax authorities
within the next 5 years following the filing date and/or amendment, considering that the returns reflected tax losses.



According to law 1819 the general
rule extended from 2 to 3 years the statute of limitation of tax returns. Tax returns extemporarily filed will have a 3 year
statute of limitations from the day the tax return was filed. The statute of limitations for income tax returns subject to
the transfer pricing regime is 6 years. Tax returns with balances in favor, the statute of limitation will be 3
years starting from the date when the offset or refund request is filed. Tax returns in which tax losses are originated, will
have a statute of limitation period of 12 years, which will be extended to 15 years if losses are offset within the last 2
years of the 12 year period.



Tax returns in which tax losses are
offset will have a 6-year statute of limitation period.





F-39


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Presumptive income



The taxable income of the tax payer cannot
be lower than 3% of its net equity as of December 31 of immediately preceding taxable period. As of the year 2017, it will be at
a rate of 3.5%.



Income tax expense



The following table shows
a breakdown of the income tax recognized in profit or loss for the years ended December 31, 2016, 2015 and 2014:



|                    |  | 2016 |           |  | 2015 |  |            | 2014 | 
|------------------- |  | ---- | --------- |  | ---- |  | ---------- | ---- | 
|Current income tax  |  |      | 4,517,336 |  |      |  | 3,510,546  |      | 
|Deferred income tax |  |      | 25,710    |  |      |  | (2,800,193 | )    | 
|Income tax expense  |  |      | 4,543,046 |  |      |  | 710,353    |      | 



Reconciliation of the
income tax expense



The reconciliation between income tax expense
and the tax determined based on the official tax rate applicable to the Company in Colombia is as follows:



|                                                                 |  | 2016 |           |   | 2015 |  |            | 2014 | 
|---------------------------------------------------------------- |  | ---- | --------- | - | ---- |  | ---------- | ---- | 
|Net income (loss) before income tax                              |  |      | 7,790,526 |   |      |  | (5,578,626 | )    | 
|Statutory rate                                                   |  |      | 40        | % |      |  | 39         | %    | 
|Income tax at statutory rate                                     |  |      | 3,116,210 |   |      |  | (2,175,664 | )    | 
|                                                                 |  |      |           |   |      |  |            |      | 
|ETR reconciliation items:                                        |  |      |           |   |      |  |            |      | 
|Effect in changes in tax rates and effect in tax
    base (CREE) |  |      | 807,989   |   |      |  | 2,063,782  |      | 
|Non deductible wealth tax                                        |  |      | 229,375   |   |      |  | 253,422    |      | 
|Foreign currency translation and exchange difference             |  |      | (234,316  | ) |      |  | 310,657    |      | 
|Prior year taxes                                                 |  |      | 140,630   |   |      |  | (21,233    | )    | 
|Non deductible expenses                                          |  |      | 486,300   |   |      |  | 251,246    |      | 
|Valuation of investments                                         |  |      | -         |   |      |  | 48,129     |      | 
|Non taxable income                                               |  |      | (3,142    | ) |      |  | (19,986    | )    | 
|Others                                                           |  |      | -         |   |      |  | -          |      | 
|Income tax calculated                                            |  |      | 4,543,046 |   |      |  | 710,353    |      | 
|                                                                 |  |      |           |   |      |  |            |      | 
|Current                                                          |  |      | 4,517,336 |   |      |  | 3,510,546  |      | 
|Deferred                                                         |  |      | 25,710    |   |      |  | (2,800,193 | )    | 
|                                                                 |  |      | 4,543,046 |   |      |  | 710,353    |      | 



The effective tax rate (ETR) as of
December 31, 2016 was 58.3% (2015: 12.7%). The increase compared to the previous year is mainly due to the following: a) The
effect of the increase of unrecognized deferred tax assets on tax carryforwards in the group that according to the financial
projections will not be able to be recovered in a predictable future, and b) the increase in non-deductible expenses due to
the amendment of the 2015 income tax.



Income tax returns for taxable years 2012 to
2015 and CREE of taxable years 2013 to 2015 are open to review in accordance with the applicable statute of limitations. The auditing
of those tax returns may result in additional taxes, or interest, or penalties which could give rise to administrative proceedings
with applicable authorities. Management of the Group Companies considers that the amounts accounted as a liability for the tax
payable is supported by tax law, regulations and official opinion in order to address any legal claim that could be requested by
the tax authority. The strategy's Company is do not take aggressive or risk tax positions that could put into question these tax
returns.





F-40


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Deferred income tax



The balance at December 31, 2016 and 2015 of deferred
taxes is comprised as follows:



|                          |  | 2016 |           |  | 2015 | 
|------------------------- |  | ---- | --------- |  | ---- | 
|Deferred tax asset        |  |      | 5,726,961 |  |      | 
|Deferred tax liability    |  |      | 3,118,650 |  |      | 
|Total deferred income tax |  |      | 2,608,311 |  |      | 



Deferred
tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates
enacted or substantively enacted at the reporting date.



The table below shows an
analysis of the Company ́s deferred tax assets and liabilities:



|                                                                          |  | 2016 |           |  | 2015 | 
|------------------------------------------------------------------------- |  | ---- | --------- |  | ---- | 
|Deferred tax assets                                                       |  |      |           |  |      | 
|Property, plant and equipment and Natural and environmental resources (1) |  |      | 2,185,792 |  |      | 
|Provisions                                                                |  |      | 1,875,964 |  |      | 
|Employee benefits (2)                                                     |  |      | 656,997   |  |      | 
|Loss carry forwards                                                       |  |      | 477,808   |  |      | 
|Accounts payable                                                          |  |      | 311,646   |  |      | 
|Borrowings and other financial liabilities                                |  |      | -         |  |      | 
|Accounts receivable                                                       |  |      | 135,092   |  |      | 
|Others (3)                                                                |  |      | 83,662    |  |      | 
|Total                                                                     |  |      | 5,726,961 |  |      | 



|                                                                          |  | 2016 |           |  | 2015 | 
|------------------------------------------------------------------------- |  | ---- | --------- |  | ---- | 
|Deferred tax liabilities                                                  |  |      |           |  |      | 
|Property, plant and equipment and Natural and environmental resources (1) |  |      | 2,406,106 |  |      | 
|Goodwill                                                                  |  |      | 345,288   |  |      | 
|Borrowings and other financial liabilities                                |  |      | 113,497   |  |      | 
|Others (3)                                                                |  |      | 253,759   |  |      | 
|Total                                                                     |  |      | 3,118,650 |  |      | 



| | (1) | For
tax purposes, natural resources and property, plant and equipment have specific useful lives and a methodology of capitalization
different from those determined under IFRS. This difference will result in a difference in the depreciable basis for accounting
and tax purposes.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Difference in valuation of the actuarial liability.
| | --- | ---------------------------------------------------



| | (3) | Investments, inventories and intangible assets.
| | --- | -----------------------------------------------





F-41


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The movements of deferred income tax for the years ended December
31, 2016 and 2015 is as follows:



Deferred tax assets:



|                                          |  | Property,
    plant  and equipment  and natural  resources |            |   | Provisions |  |           | Employee
     benefits |  |  | Tax
    losses |   |  | Accounts
     payable |         |  | Accounts
     receivable |  |          | Borrowings
     and other  financial  obligations |  |  | Others  |   |  | Total |         
|----------------------------------------- |  | ---------------------------------------------------------- | ---------- | - | ---------- |  | --------- | ---------------------- |  |  | -------------- | - |  | --------------------- | ------- |  | ------------------------ |  | -------- | ------------------------------------------------- |  |  | ------- | - |  | ----- | --------
|December 31, 2014                         |  |                                                            | 1,007,559  |   |            |  | 1,814,433 |                        |  |  | 352,720        |   |  |                       | 227,078 |  |                          |  | 111,300  |                                                   |  |  | 113,889 |   |  |       | 268,210 
|Recognized in deferred income tax expense |  |                                                            | 3,086,691  |   |            |  | 53,028    |                        |  |  | 370,863        |   |  |                       | 11,115  |  |                          |  | 614,956  |                                                   |  |  | (95,962 | ) |  |       | 718,479 
|Recognized in other comprehensive income  |  |                                                            | -          |   |            |  | -         |                        |  |  | (723,583       | ) |  |                       | -       |  |                          |  | -        |                                                   |  |  | -       |   |  |       | -       
|December 31, 2015                         |  |                                                            | 4,094,250  |   |            |  | 1,867,461 |                        |  |  | -              |   |  |                       | 238,193 |  |                          |  | 726,256  |                                                   |  |  | 17,927  |   |  |       | 986,689 
|Recognized in deferred income tax expense |  |                                                            | (1,908,458 | ) |            |  | 8,503     |                        |  |  | 40,300         |   |  |                       | 239,615 |  |                          |  | (414,610 | )                                                 |  |  | 117,165 |   |  |       | (986,689
|Recognized in other comprehensive income  |  |                                                            | -          |   |            |  | -         |                        |  |  | 616,697        |   |  |                       | -       |  |                          |  | -        |                                                   |  |  | -       |   |  |       | -       
|December 31, 2016                         |  |                                                            | 2,185,792  |   |            |  | 1,875,964 |                        |  |  | 656,997        |   |  |                       | 477,808 |  |                          |  | 311,646  |                                                   |  |  | 135,092 |   |  |       | -       



Deferred tax liabilities:



|                                          |  | Property,
    plant and  equipment and natural  resources |            |   | Goodwill |  |          | Financial
     obligations |  |  | Others     |   |  | Total |         
|----------------------------------------- |  | --------------------------------------------------------- | ---------- | - | -------- |  | -------- | -------------------------- |  |  | ---------- | - |  | ----- | --------
|December 31, 2014                         |  |                                                           | 2,933,009  |   |          |  | 473,293  |                            |  |  | 571,105    |   |  |       | 190,737 
|Recognized in deferred income tax expense |  |                                                           | 1,074,825  |   |          |  | (211,002 | )                          |  |  | 788,797    |   |  |       | 264,826 
|Recognized in other comprehensive income  |  |                                                           | -          |   |          |  | -        |                            |  |  | 167,599    |   |  |       | -       
|Foreign exchange                          |  |                                                           | (119,083   | ) |          |  | -        |                            |  |  | -          |   |  |       | (108,056
|December 31, 2015                         |  |                                                           | 3,888,751  |   |          |  | 262,291  |                            |  |  | 1,527,501  |   |  |       | 347,507 
|Recognized in deferred income tax expense |  |                                                           | (1,482,645 | ) |          |  | 82,997   |                            |  |  | (1,414,004 | ) |  |       | (46,530 
|Foreign exchange                          |  |                                                           | -          |   |          |  | -        |                            |  |  | -          |   |  |       | (47,218 
|Recognized in other comprehensive income  |  |                                                           | -          |   |          |  | -        |                            |  |  | -          |   |  |       | -       
|December 31, 2016                         |  |                                                           | 2,406,106  |   |          |  | 345,288  |                            |  |  | 113,497    |   |  |       | 253,759 



Deferred
tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to taxes levied by the same tax authority
on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.



In accordance with the current tax law losses
generated in income and supplementary taxes and/or income tax for equality - CREE before 2017 must be offset with the net income
obtained in 2017 and subsequent periods, taking into account the formula set out in article 290 of Law 1819 of 2016. Tax losses
determined must not be tax re-adjusted.



Starting in 2017 companies can offset tax losses
obtained in the current period, with taxable income generated through the next 12 taxable periods, following the attainment of
said tax losses, without prejudice of the period's presumptive income.



The asset for deferred tax related to tax losses
generated by Bioenergy S.A. and Bioenergy Zona Franca were written off in 2016 because, even though they can be offset in the long
term, Management concluded that it is not likely that the asset deferred tax related to such tax losses would be recoverable in
the short term. If the Ecopetrol Group could have recognized the deferred tax asset that was not recognized the income for the
period ended on December 31, 2016 would have increased by COP$83,595.





F-42


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




As per Colombian tax law, excess of
presumptive income can be carried forward for 5 years.As
of December 31, 2016, Ecopetrol Group has unrecognized deferred tax assets on cumulative excess of presumptive income of
COP 49,155, which expires between 2017 and 2020. TheDeferred tax assets have not been recognized in respect of these carryforwards, as they may not be used to
offset taxable profits in the Group.



In accordance with tax provisions applicable
until December 31, 2016 the surplus of presumptive income and minimal base generated before 2017 in income and supplementary taxes
and in the income tax for equality - CREE, respectively, can be offset with ordinary net income obtained by the Company in the
next five years, using for such purpose the formula set out in number 6, article 290 of law 1819 of 2016.



The movements of deferred income tax for the
years ended December 31, 2016 and 2015 are as follows:

|                                                          |  |      |           |   |      | 
|--------------------------------------------------------- |  | ---- | --------- | - | ---- | 
|                                                          |  | 2016 |           |   | 2015 | 
|Opening balance                                           |  |      | 2,213,422 |   |      | 
|Deferred tax recognized in profit or loss                 |  |      | (25,710   | ) |      | 
|Deferred tax recognized in other comprehensive income (a) |  |      | 420,599   |   |      | 
|Closing balance                                           |  |      | 2,608,311 |   |      | 



| | (a) | The following is the breakdown of income tax recorded against other comprehensive income:
| | --- | -----------------------------------------------------------------------------------------



|December 31, 2016                              |  | Pre-tax |           |   | Deferred tax |  |          | After tax | 
|---------------------------------------------- |  | ------- | --------- | - | ------------ |  | -------- | --------- | 
|Actuarial valuation gains (losses)             |  |         | 1,770,139 |   |              |  | (616,697 | )         | 
|Cash flow hedging for future crude oil exports |  |         | (757,469  | ) |              |  | 296,047  |           | 
|Derivative financial instruments               |  |         | (56,448   | ) |              |  | 22,579   |           | 
|Others                                         |  |         | -         |   |              |  | (47,217  | )         | 
|                                               |  |         | 956,222   |   |              |  | (345,288 | )         | 



|December 31, 2015                              |  | Pre-tax |            |   | Deferred tax |  |          | After tax | 
|---------------------------------------------- |  | ------- | ---------- | - | ------------ |  | -------- | --------- | 
|Actuarial valuation gains (losses)             |  |         | (2,128,184 | ) |              |  | 723,582  |           | 
|Cash flow hedging for future crude oil exports |  |         | 344,836    |   |              |  | (127,545 | )         | 
|Derivative financial instruments               |  |         | 100,134    |   |              |  | (40,051  | )         | 
|Others                                         |  |         | -          |   |              |  | 108,057  |           | 
|                                               |  |         | (1,683,214 | ) |              |  | 664,043  |           | 



| | 10.3 | Other taxes
| | ---- | -----------



| | 10.3.1 | Tax on dividends
| | ------ | ----------------



The new tax on dividends will be applicable
to foreign companies and entities on profits generated starting 2017.



Dividends will be taxed at 5%. For Colombian
individuals the rate would be up to 10%. Profits that did not pay tax at the corporate level, would be subject to a 35% withholding
tax at the time of distribution. In this case, the distribution, after being reduced by the 35% withholding tax, would be subject
to the dividend tax. Dividends tax will be applicable to profits generated as of 2017.



| | 10.3.2 | Transfer prices
| | ------ | ---------------



Colombian Taxpayers carrying out operations
with related parties located abroad are required to submit the disclosure return of transactions with related parties. For these
taxpayers it is necessary to prepare and maintain supporting documentation only for those types of operations, if the annual amount
accumulated in the relevant tax year exceeds ten thousand units of taxable value units (10.000 UVT) (For 2016: COP$ 29,753).





F-43


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The Companies are required to file their transfer
pricing information for the taxable year 2015 and the related supporting documents.



For fiscal year 2016 the transactions
performed with foreign economically related parties, as well as the business conditions for such operations and their general
structure, did not vary significantly as compared with the previous year. It is estimated that no adjustments will be
required derived from the analysis of transfer pricing in 2016 which imply amendments of the income provision of taxable year
2016.



| | 10.3.3 | Value added tax (VAT)
| | ------ | ---------------------



General VAT rate increased from 16% in 2016
to 19% and a differential rate of 5% for certain goods and services is maintained. The modification on the general rate is effective
from January 1st, 2017.



VAT taxable event is expanded to all goods
in general, including intangible goods (related to intellectual property) and real estate property (unless provided otherwise).



Fixed assets are still not levied with VAT,
except for real estate property for residential use, automobile and other fixed assets sold on the ordinary course of business
in the name and on behalf of third parties. For this purposes, real estate has been excluded unless the value of the first sale
is higher than 26.800 tax value unit (“UVT” by its acronyms in Spanish), approximately COP $854 million, which will
be taxed at a 5% rate.



Unless expressly excluded, services rendered
from abroad will be levied with VAT. The assignment of rights is included as a form of service.



Periods for filing VAT returns and payments
will be only two, bimonthly and quarterly. The statute of limitations for the request of VAT credit tax balance is increased to
three bimonthly periods following the period of causation.



| | 10.3.4 | Wealth tax
| | ------ | ----------



Law 1739 of 2014 stablished
wealth tax (“impuesto a la riqueza”) for the years 2015-2018. According to the Law, entities that own wealth in Colombia
–exceeding the limits established to be considered taxpayers, this is COP$ 1,000 million- have the obligation to file and
pay the wealth tax.



The applicable rate will
depend on the taxable base of each tax payer and the paid value will not be deductible nor discountable on income and supplementary
taxes for income tax for equality - CREE, nor can they be offset with these, nor any other taxes.



In 2016, the wealth tax paid by the Ecopetrol
Group amounted to COP$569,756, which was recognized as an expense in the period (2015 - COP$649,800).



F-44


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 11. | Equity instruments measured at fair value
| | --- | -----------------------------------------



The balance at December 31, 2016 and 2015 of equity instruments
measured at fair value is comprised as follows:



|                                 |  | 2016 |        |  | 2015 | 
|-------------------------------- |  | ---- | ------ |  | ---- | 
|                                 |  |      |        |  |      | 
|Empresa de Energía de Bogotá (1) |  |      | 51,522 |  |      | 
|Interconexión Eléctrica S.A (2)  |  |      | -      |  |      | 
|Other                            |  |      | 88     |  |      | 
|                                 |  |      | 51,610 |  |      | 



| | (1) | Through Decree 2305 of November 13, 2014, the Company obtained authorizations from the Government
to start the alienation program of its equity holding in Empresa de Energía de Bogotá S.A. E.S.P.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the period of authorization
and December 31, 2016 Ecopetrol sold in three auctions 95.5% of its equity share equivalent to 602,632,965 shares for COP$1,067,313
as follows:



| | - | On July 27, 2015, the sale of 352,872,414 shares took place at a selling price of COP$1,740 per
share. The operation amounted to $613,998.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | - | On June 7, 2016, the second auction was performed for 191,639,698 shares at a price of COP$1,815
for a total of COP$347,827.
| | - | ----------------------------------------------------------------------------------------------------------------------------



| | - | On December 6, 2016, the third auction was performed for the sale of 58,120,853 shares, at a price
of COP$1,815 for a total of COP$105,489.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



In December 2016, the Council of
Ministers approved a one extension for the terms of the alienation program, period in which Ecopetrol expects to sell the remaining
28,465,035 shares it holds.



| | (2) | On April 13, 2015, as part of Law 226 of 1995, the Government issued a favorable opinion on the
alienation program of Ecopetrol's equity holding in Interconexión Eléctrica S.A. E.S.P, following the recommendation
of Ecopetrol's Board of Directors. At December 31, 2016, Ecopetrol sold in two auctions 100% of its equity holding, which amounted
to 58,925,480 shares for COP$513,399 as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | On April 12, 2016, the sale of 45,295,034 shares was performed at a price of COP$8,325 each for
a total of COP$377,081.
| | - | -----------------------------------------------------------------------------------------------------------------------



| | - | On December 14, 2016, the last auction was performed
for the sale of 13,630,446 shares at a price of COP$10,001 for a total of COP$136,318.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



The proceeds from the sale of these shares
have been used to finance the Company's investment plan.



The movement of non-current assets held for
sale at December 31, 2016 and 2015 is as follows:



|                                  |  | 2016 |          |   | 2015 | 
|--------------------------------- |  | ---- | -------- | - | ---- | 
|Opening balance                   |  |      | 913,488  |   |      | 
|Fair value adjustments            |  |      | 126,205  |   |      | 
|Proceeds from sales of shares     |  |      | (966,715 | ) |      | 
|(Loss) gain on sale of shares (1) |  |      | (21,368  | ) |      | 
|Closing balance                   |  |      | 51,610   |   |      | 





F-45


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




These equity instruments are measured at fair
value with changes in fair value recorded in the other comprehensive income. Its hierarchy level is 1 using the price quoted in
the Stock Exchange of Colombia as a reference.



| | (1) | As of December 31, 2016 and 2015 the sale of shares of EEB and ISA generated a profit of COP$47,129
and COP$72,339, respectively; which corresponds to the amount of loss or gain on sale describe in the previous table plus the gains
realization of the fair value measurements that had been accumulated in equity for COP$68,497 in 2016 and COP$19,405 in 2015.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 12. | Other assets
| | --- | ------------



The balance at December 31, 2016 and 2015 of other assets is comprised
as follows:

|                                               |  |      |           |  |      | 
|---------------------------------------------- |  | ---- | --------- |  | ---- | 
|                                               |  | 2016 |           |  | 2015 | 
|Current                                        |  |      |           |  |      | 
|Partners in joint operations                   |  |      | 735,032   |  |      | 
|Advanced payments to contractors and suppliers |  |      | 151,871   |  |      | 
|Prepaid expenses                               |  |      | 140,606   |  |      | 
|Related parties (Note 32)                      |  |      | 7,135     |  |      | 
|Other advances and agreements                  |  |      | 988       |  |      | 
|Total current                                  |  |      | 1,035,632 |  |      | 
|                                               |  |      |           |  |      | 
|Non-current                                    |  |      |           |  |      | 
|Abandonment and pension funds (1)              |  |      | 312,423   |  |      | 
|Employee benefits                              |  |      | 187,969   |  |      | 
|Judicial deposits and attachments              |  |      | 140,338   |  |      | 
|Trust funds (2)                                |  |      | 87,602    |  |      | 
|Advances and deposits                          |  |      | 63,402    |  |      | 
|Other assets                                   |  |      | 35,002    |  |      | 
|Total non-current                              |  |      | 826,736   |  |      | 



| | (1) | Corresponds to trusts established to support the costs
of abandonment of wells and dismantling of facilities and future retirement pensions.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Consists primarily of deposits to the Oil Savings and
Stabilization Fund (from the Spanish Fondo de Ahorro y Estabilización Petrolera - FAEP) in Ecopetrol’s favor
to address the remainder of the National Royalties Fund. Its sole purpose is the payment of debts and financing development programs
and projects in hydrocarbon producing and non-producing municipalities and departments. Ecopetrol will make disbursements as the
Ministry of Finance issues the respective approvals.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At the close of
2015, the pension resources managed by Fiduciaria Bancolombia (equivalent to COP$342,951, from the termination of the Cravo
Norte Partnership agreement with Occidental de Colombia) were returned to Ecopetrol S.A., since the pension obligation arising
from such agreement is supported by the pension trusts described in note 22 - Provisions for employee benefits.





F-46


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 13. | Assets held for sale and their related liabilities
| | --- | --------------------------------------------------



At December 31, 2016, the balance of assets
classified as non-current assets held for sale amounted to COP$132,216 and it was comprised of:



| | § | Assets remaining from the expansion of the oil pipeline to transport extra-heavy crude oil conducted
by Oleoducto Central S.A. - Ocensa, for COP$65,703.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | § | Andean
assets related to Louisiana Green Fuels for COP$36,902 corresponding to ethanol and water plants and a harvester.
| | - | ------------------------------------------------------------------------------------------------------------------------





| | § | Ecopetrol’s oil fileds:
                                                                                                                             Sogamoso, Rio Zulia, Rio de Oro and Puerto Barco, Santana, Nancy-Maxine-Burdine and Valdivia Almagro, awarded through
                                                                                                                             auction offered in November 2016 for COP $29,611.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The balance of related liabilities as of December
31, 2016 amounts to COP$40,128 and corresponds mainly to abandonment costs and environmental commitments of these assets.



Assets held for sale at December 31, 2015 for
COP$242,745 and its related liabilities for COP$17,628 corresponded to fields La Hocha and La Cañada, owned by Hocol S.A.,
on which the sale was abandoned in 2016 because the offer did not meet economic expectations.



F-47


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 14. | Investments in associates and joint ventures
| | --- | --------------------------------------------



| | 14.1 | Composition and movements
| | ---- | -------------------------



The balance at December 31, 2016 and 2015 of
the investments in associates and joint ventures is as follows:



|                                 |  | 2016 |           |   | 2015 | 
|-------------------------------- |  | ---- | --------- | - | ---- | 
|Investments in joint ventures    |  |      |           |   |      | 
|Equion Energía Limited           |  |      | 1,156,430 |   |      | 
|Offshore International Group (1) |  |      | 937,938   |   |      | 
|Ecodiesel Colombia S.A.          |  |      | 39,525    |   |      | 
|                                 |  |      | 2,133,893 |   |      | 
|Less impairment:                 |  |      |           |   |      | 
|Equion Energía Limited           |  |      | (253,683  | ) |      | 
|Offshore International Group     |  |      | (577,053  | ) |      | 
|                                 |  |      | 1,303,157 |   |      | 
|Investments in associates        |  |      |           |   |      | 
|Invercolsa S.A.                  |  |      | 243,156   |   |      | 
|Serviport S.A.                   |  |      | 5,255     |   |      | 
|Sociedad Portuaria Olefinas      |  |      | 1,126     |   |      | 
|                                 |  |      | 249,537   |   |      | 
|Less impairment: Serviport S.A.  |  |      | -         |   |      | 
|                                 |  |      | 249,537   |   |      | 
|                                 |  |      | 1,552,694 |   |      | 



| | (1) | According to the assessment of control carried out as of December 31, 2016, the investment in Offshore
International Group was classified as joint venture from an associate, due to the existence of joint control. For comparative purposes,
the balance was reclassified as of December 31, 2015 to joint ventures.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The detail of the investments,
economic activity, domicile, area of operation and financial information of the investments in joint ventures and associates is
shown in Exhibit I.



The following is the movement
of these investments:



For the year ended December 31, 2016:



|                                  |  | Associates |         |   | Joint ventures |  |           | Total | 
|--------------------------------- |  | ---------- | ------- | - | -------------- |  | --------- | ----- | 
|Opening balance                   |  |            | 69,516  |   |                |  | 1,862,418 |       | 
|Effects of equity method through: |  |            |         |   |                |  |           |       | 
|Profit or loss                    |  |            | 48,299  |   |                |  | 13,046    |       | 
|Other comprehensive income        |  |            | 173,772 |   |                |  | (49,127   | )     | 
|Dividends declared                |  |            | (42,050 | ) |                |  | (384,787  | )     | 
|Impairment                        |  |            | -       |   |                |  | (127,858  | )     | 
|Reclassifications                 |  |            | -       |   |                |  | (10,535   | )     | 
|Closing balance                   |  |            | 249,537 |   |                |  | 1,303,157 |       | 





F-48


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




For the year ended December 31, 2015:



|                                  |  | Associates |         |   | Joint ventures |  |           | Total | 
|--------------------------------- |  | ---------- | ------- | - | -------------- |  | --------- | ----- | 
|Opening balance                   |  |            | 64,710  |   |                |  | 2,325,479 |       | 
|Effects of equity method through: |  |            |         |   |                |  |           |       | 
|Profit or loss                    |  |            | 45,988  |   |                |  | (92,675   | )     | 
|Other comprehensive income        |  |            | -       |   |                |  | 508,968   |       | 
|Dividends declared                |  |            | (41,182 | ) |                |  | (291,210  | )     | 
|Impairment                        |  |            | -       |   |                |  | (588,144  | )     | 
|Closing balance                   |  |            | 69,516  |   |                |  | 1,862,418 |       | 



| | 14.2 | Impairment on the value of investments in companies
| | ---- | ---------------------------------------------------



Investments in associates
and joint ventures are recorded under the equity method. Ecopetrol evaluates if such investments were impaired during the period,
and assesses if there is objective evidence of a potential impairment, particularly for companies that were acquired with goodwill.



As a result, the Company
recognized impairment expense in the value of its investments in companies at December 31, as follows:



|                             |  | 2016 |         |  | 2015 |  |         | 2014 | 
|---------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- | 
|Equion Energía Limited       |  |      | 81,155  |  |      |  | 172,528 |      | 
|Offshore International Group |  |      | 46,703  |  |      |  | 415,616 |      | 
|Total                        |  |      | 127,858 |  |      |  | 588,144 |      | 



The main assumptions used
for determining the fair value less costs to sell of the investments, which perform hydrocarbon exploration and production activities,
include:



| | - | Financial projections for the above companies were made taking into account the fair value less
cost of disposal based on the discounted cash flow after taxes, that are derived from business plans approved by the company's
management. The plans are developed based on long term macroeconomic factors such as price curves and fundamental supply and demand
assumptions. The fair value category is level 3.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | The
forecasts include US$56.8/barrel for 2017, US$67.9/barrel average for the next six years and US$80/barrel in the long-term. Prices
are based on information from recognized suppliers well known by the market and by management analysts.
In 2015, the assumptions made used a price of US$40/barrel in 2016 reaching US$60 in the long-term. The production profiles were
estimated based on third-party perspectives, which rely on their companies’ vision.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | The rates used for discounting cash flows are based on the WACC methodology and reflect the specific
risk of the business segment. The rate used for 2016 was 8.9% for Equion Energía Limited (2015 – 8.4%) and 8%
for Offshore International Group (2015 – 8.4%).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | Certified reserves balances, in addition to prove, probable and possible reserves were also considered
adjusted by different risk factors.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



The impairment recognized
in 2015 was caused mostly by the adverse economic context of the hydrocarbon industry, which translated into the reduction of oil
price forecast and increase in the market and country risks reflected on the discount rate. For 2016, despite of better forecasts
for long term oil prices, the Company recognized an additional impairment in the investment in the Offshore International Group
and Equion for the return to local authorities of low-prospectively exploration blocks, high geological risk and low economic viability
with respect to a new price scenario.





F-49


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 14.3 | Restrictions on investments
| | ---- | ---------------------------



The number of shares held
by Ecopetrol in Invercolsa S.A. has been subjected to a legal dispute with another shareholder of this company. The Courts decided
in favor of Ecopetrol through ruling of 2011, whereby it was determined that 324 million shares, equivalent to 11.58% of Invercolsa’s
social capital should be returned to Ecopetrol. The Ecopetrol’s equity share in said company is 43.35%. The dividends paid
in relation with the shares returned to Ecopetrol are also subject to controversy, as well as the ownership of the shares that
represent 8.53% of Invercolsa. At December 31, 2016, the settlement of these claims is still pending.



F-50


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 14.4 | Additional information about associates and joint
ventures
| | ---- | ----------------------------------------------------------



The balance of assets, liabilities and results
of most relevant associates and joint ventures at December 31, 2016 and 2015 is comprised as follows:



|                                  |  | 2016                   |           |  | 2015                         | 
|--------------------------------- |  | ---------------------- | --------- |  | ---------------------------- | 
|                                  |  | Equion Energía Limited |           |  | Offshore International Group | 
|Statement of financial position   |  |                        |           |  |                              | 
|Current assets                    |  |                        | 712,078   |  |                              | 
|Non-current assets                |  |                        | 1,406,510 |  |                              | 
|Total assets                      |  |                        | 2,118,588 |  |                              | 
|Current liabilities               |  |                        | 417,203   |  |                              | 
|Non-current liabilities           |  |                        | 170,527   |  |                              | 
|Total liabilities                 |  |                        | 587,730   |  |                              | 
|Equity                            |  |                        | 1,530,858 |  |                              | 
|                                  |  |                        |           |  |                              | 
|Other complementary information   |  |                        |           |  |                              | 
|Cash and cash equivalents         |  |                        | 300,689   |  |                              | 
|Financial obligations, short-term |  |                        | 328,497   |  |                              | 
|Financial obligations, long-term  |  |                        | 309       |  |                              | 





|                                  |  | 2016                    |           |   | 2015                          | 
|--------------------------------- |  | ----------------------- | --------- | - | ----------------------------- | 
|                                  |  | Equion Energía  Limited |           |   | Offshore  International Group | 
|Statement of profit or loss       |  |                         |           |   |                               | 
|Sales revenue                     |  |                         | 1,204,301 |   |                               | 
|Costs                             |  |                         | (969,318  | ) |                               | 
|Administration and other expenses |  |                         | (44,810   | ) |                               | 
|Financial income (expenses)       |  |                         | 59,143    |   |                               | 
|Income tax                        |  |                         | 30,199    |   |                               | 
|Net income for the period         |  |                         | 279,515   |   |                               | 





F-51


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Included below, there is a reconciliation of equity between the
most significant participations and the carrying amount of investments at December 31:



|                                   |  | 2016                     |           |   | 2015                           | 
|---------------------------------- |  | ------------------------ | --------- | - | ------------------------------ | 
|                                   |  | Equion
 Energía
 Limited |           |   | Offshore
 International 
Group | 
|Equity of the associate            |  |                          | 1,530,858 |   |                                | 
|% of Ecopetrol’s ownership         |  |                          | 51        | % |                                | 
|Ecopetrol’s ownership              |  |                          | 780,738   |   |                                | 
|Additional value of the investment |  |                          | 375,693   |   |                                | 
|Less Impairment expense            |  |                          | (253,684  | ) |                                | 
|Carrying amount of the investment  |  |                          | 902,747   |   |                                | 



F-52


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 15. | Property, plant and equipment
| | --- | -----------------------------



The following shows a breakdown of
the changes in property, plant and equipment and its depreciation and impairment for the years ended December 31, 2016 and 2015:



|                                            |  | Plant
    and  equipment |             |   | Pipelines,
     networks and lines |  |            | Work
    in  progress (1) |  |  | Buildings  |   |  | Lands |            |   | Other |  |           | Total | 
|------------------------------------------- |  | ------------------------ | ----------- | - | ---------------------------------- |  | ---------- | ------------------------- |  |  | ---------- | - |  | ----- | ---------- | - | ----- |  | --------- | ----- | 
|                                            |  |                          |             |   |                                    |  |            |                           |  |  |            |   |  |       |            |   |       |  |           |       | 
|Cost                                        |  |                          |             |   |                                    |  |            |                           |  |  |            |   |  |       |            |   |       |  |           |       | 
|Balance at December 31, 2015                |  |                          | 37,360,222  |   |                                    |  | 26,856,085 |                           |  |  | 11,015,010 |   |  |       | 6,479,356  |   |       |  | 4,068,951 |       | 
|Additions/capitalizations                   |  |                          | 1,457,547   |   |                                    |  | 1,383,352  |                           |  |  | (107,181   | ) |  |       | 360,596    |   |       |  | 41,202    |       | 
|(Decrease) increase in abandonment costs    |  |                          | (84,780     | ) |                                    |  | (78,712    | )                         |  |  | -          |   |  |       | -          |   |       |  | -         |       | 
|Capitalized interest                        |  |                          | -           |   |                                    |  | -          |                           |  |  | 205,662    |   |  |       | -          |   |       |  | -         |       | 
|Exchange differences capitalized            |  |                          | -           |   |                                    |  | -          |                           |  |  | 8,639      |   |  |       | -          |   |       |  | -         |       | 
|Disposals                                   |  |                          | (158,193    | ) |                                    |  | (21,814    | )                         |  |  | (16,031    | ) |  |       | (12,540    | ) |       |  | 713       |       | 
|Foreign currency translation                |  |                          | (42,870     | ) |                                    |  | (298,750   | )                         |  |  | (1,629,613 | ) |  |       | (9,832     | ) |       |  | (69,878   | )     | 
|Other (reclassifications)
    (2)           |  |                          | 4,076,350   |   |                                    |  | 1,247,621  |                           |  |  | (4,602,080 | ) |  |       | 94,177     |   |       |  | (146,768  | )     | 
|Balance at December 31, 2016                |  |                          | 42,608,276  |   |                                    |  | 29,087,782 |                           |  |  | 4,874,406  |   |  |       | 6,911,757  |   |       |  | 3,894,220 |       | 
|                                            |  |                          |             |   |                                    |  |            |                           |  |  |            |   |  |       |            |   |       |  |           |       | 
|Accumulated depreciation
    and impairment |  |                          |             |   |                                    |  |            |                           |  |  |            |   |  |       |            |   |       |  |           |       | 
|Balance at December 31, 2015                |  |                          | (13,469,749 | ) |                                    |  | (8,572,373 | )                         |  |  | (19,566    | ) |  |       | (1,698,791 | ) |       |  | (13,689   | )     | 
|Depreciation expense                        |  |                          | (1,869,604  | ) |                                    |  | (1,426,659 | )                         |  |  | -          |   |  |       | (392,294   | ) |       |  | -         |       | 
|Impairment (Note 17)                        |  |                          | (659,223    | ) |                                    |  | 33,048     |                           |  |  | (3,270     | ) |  |       | 57,157     |   |       |  | 24,067    |       | 
|Disposals                                   |  |                          | 121,382     |   |                                    |  | 14,022     |                           |  |  | -          |   |  |       | 7,021      |   |       |  | 15        |       | 
|Foreign currency translation                |  |                          | 272,582     |   |                                    |  | 138,611    |                           |  |  | 38,904     |   |  |       | 12,658     |   |       |  | -         |       | 
|Other (reclassifications)
    (2)           |  |                          | 92,617      |   |                                    |  | (152,203   | )                         |  |  | (278,665   | ) |  |       | (74,229    | ) |       |  | (37,245   | )     | 
|Balance at December 31, 2016                |  |                          | (15,511,995 | ) |                                    |  | (9,965,554 | )                         |  |  | (262,597   | ) |  |       | (2,088,478 | ) |       |  | (26,852   | )     | 
|                                            |  |                          |             |   |                                    |  |            |                           |  |  |            |   |  |       |            |   |       |  |           |       | 
|Net balance at December 31, 2016            |  |                          | 27,096,281  |   |                                    |  | 19,122,228 |                           |  |  | 4,611,809  |   |  |       | 4,823,279  |   |       |  | 3,867,368 |       | 



| | (1) | The balance of work in progress at December 31, 2016, mainly includes investments for development
projects in the Castilla and Chichimene, integral plan of electric energy (PIEE, for its acronym in Spanish),primary and secondary development of the project Tibú-Socuabo and modernization project of the Barrancabermeja refinery.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Corresponds mainly to transfers to: a) inventory of project materials for use in the operation
for COP$(712,967) mainly Ecopetrol and Reficar, b) opening of the intangible part of projects to natural resources for COP$68,750
and c) other COP$116,692.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-53


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|                                             |  | Plant
    and  equipment |             |   | Pipelines,
     networks and  lines |  |            | Work
    in  progress (1) |  |  | Buildings   |   |  | Lands |            |   | Other |  |           | Total | 
|-------------------------------------------- |  | ------------------------ | ----------- | - | ----------------------------------- |  | ---------- | ------------------------- |  |  | ----------- | - |  | ----- | ---------- | - | ----- |  | --------- | ----- | 
|Cost                                         |  |                          |             |   |                                     |  |            |                           |  |  |             |   |  |       |            |   |       |  |           |       | 
|Balance at December 31, 2014                 |  |                          | 16,109,035  |   |                                     |  | 19,938,115 |                           |  |  | 24,009,694  |   |  |       | 5,199,417  |   |       |  | 3,614,237 |       | 
|Additions                                    |  |                          | 2,720,120   |   |                                     |  | 2,213,663  |                           |  |  | 2,446,904   |   |  |       | 755,565    |   |       |  | 112,972   |       | 
|Increase (decrease) in abandonment
    costs |  |                          | 242,815     |   |                                     |  | (115,608   | )                         |  |  | 14,184      |   |  |       | -          |   |       |  | -         |       | 
|Capitalized interest                         |  |                          | -           |   |                                     |  | -          |                           |  |  | 553,061     |   |  |       | -          |   |       |  | -         |       | 
|Exchange differences capitalized             |  |                          | -           |   |                                     |  | -          |                           |  |  | 110,485     |   |  |       | -          |   |       |  | -         |       | 
|Disposals                                    |  |                          | (94,227     | ) |                                     |  | (187,964   | )                         |  |  | (32,842     | ) |  |       | (5,060     | ) |       |  | (9,786    | )     | 
|Foreign currency translation                 |  |                          | 5,093,932   |   |                                     |  | 2,526,312  |                           |  |  | 159,154     |   |  |       | 258,070    |   |       |  | 354,898   |       | 
|Other (reclassifications)                    |  |                          | 13,288,547  |   |                                     |  | 2,481,567  |                           |  |  | (16,245,630 | ) |  |       | 271,364    |   |       |  | (3,370    | )     | 
|Balance at December 31, 2015                 |  |                          | 37,360,222  |   |                                     |  | 26,856,085 |                           |  |  | 11,015,010  |   |  |       | 6,479,356  |   |       |  | 4,068,951 |       | 
|                                             |  |                          |             |   |                                     |  |            |                           |  |  |             |   |  |       |            |   |       |  |           |       | 
|Accumulated depreciation
    and Impairment  |  |                          |             |   |                                     |  |            |                           |  |  |             |   |  |       |            |   |       |  |           |       | 
|Balance at December 31, 2014                 |  |                          | (7,446,991  | ) |                                     |  | (6,071,305 | )                         |  |  | (1,209,229  | ) |  |       | (1,146,453 | ) |       |  | (70,332   | )     | 
|Depreciation expense                         |  |                          | (1,168,864  | ) |                                     |  | (1,300,687 | )                         |  |  | -           |   |  |       | (329,396   | ) |       |  | -         |       | 
|Impairment (Nota 17)                         |  |                          | (2,787,539  | ) |                                     |  | (584,736   | )                         |  |  | (509,195    | ) |  |       | (161,431   | ) |       |  | (13,689   | )     | 
|Disposals                                    |  |                          | 75,305      |   |                                     |  | 90,389     |                           |  |  | -           |   |  |       | 4,208      |   |       |  | -         |       | 
|Foreign currency translation                 |  |                          | (219,358    | ) |                                     |  | (481,180   | )                         |  |  | (404,872    | ) |  |       | (37,259    | ) |       |  | -         |       | 
|Other (reclassifications)                    |  |                          | (1,922,302  | ) |                                     |  | (224,854   | )                         |  |  | 2,103,730   |   |  |       | (28,460    | ) |       |  | 70,332    |       | 
|Balance at December 31, 2015                 |  |                          | (13,469,749 | ) |                                     |  | (8,572,373 | )                         |  |  | (19,566     | ) |  |       | (1,698,791 | ) |       |  | (13,689   | )     | 
|Net balance at December 31, 2015             |  |                          | 23,890,473  |   |                                     |  | 18,283,712 |                           |  |  | 10,995,444  |   |  |       | 4,780,565  |   |       |  | 4,055,262 |       | 



| | (1) | In October 2015, the Refinería
de Cartagena project started its operations. Part of the investment in this project, which had been accumulated under Construction
in progress ($13,853,231), was reclassified to different fixed asset classes to begin depreciation thereof.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The balance for
projects in progress at December 31, 2015, primarily consists of investments for development projects in the Castilla, Rubiales
and Chichimene fields as well as projects to modernize the Barrancabermeja refinery and the industrial services master plan.





F-54


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 16. | Natural and environmental resources
| | --- | -----------------------------------



The following shows a breakdown of the changes in Natural and environmental
resources and its depletion and impairment for the years ended December 31, 2016 and 2015. The depletion method used is units of
production.



|                                         |  | Oil and gas  investments |             |   | Asset retirement cost |  |            | Exploration and evaluation (1) |  |  | Total     |  
|---------------------------------------- |  | ------------------------ | ----------- | - | --------------------- |  | ---------- | ------------------------------ |  |  | --------- | -
|Cost                                     |  |                          |             |   |                       |  |            |                                |  |  |           |  
|Balance at December 31, 2015             |  |                          | 44,148,353  |   |                       |  | 1,762,374  |                                |  |  | 6,189,142 |  
|Additions/capitalizations                |  |                          | 3,045,474   |   |                       |  | 10,391     |                                |  |  | (934,570  | )
|Increase (decrease) in abandonment costs |  |                          | -           |   |                       |  | 566,213    |                                |  |  | (4,062    | )
|Disposals                                |  |                          | (26,548     | ) |                       |  | (37,942    | )                              |  |  | (121,032  | )
|Dry wells (2)                            |  |                          | -           |   |                       |  | -          |                                |  |  | (342,691  | )
|Capitalized interest                     |  |                          | -           |   |                       |  | -          |                                |  |  | 98,431    |  
|Capitalized exchange differences         |  |                          | -           |   |                       |  | -          |                                |  |  | 7,259     |  
|Foreign currency translation             |  |                          | (352,766    | ) |                       |  | (8,049     | )                              |  |  | (103,728  | )
|Other (reclassifications)                |  |                          | 264,583     |   |                       |  | 11,928     |                                |  |  | 29,375    |  
|Balance at December 31, 2016             |  |                          | 47,079,096  |   |                       |  | 2,304,915  |                                |  |  | 4,818,124 |  
|                                         |  |                          |             |   |                       |  |            |                                |  |  |           |  
|Accumulated depletion and impairment     |  |                          |             |   |                       |  |            |                                |  |  |           |  
|Balance at December 31, 2015             |  |                          | (26,874,774 | ) |                       |  | (1,181,798 | )                              |  |  | -         |  
|Depletion expense                        |  |                          | (3,496,998  | ) |                       |  | (208,769   | )                              |  |  | -         |  
|Impairment (Note 17)                     |  |                          | (239,151    | ) |                       |  | -          |                                |  |  | -         |  
|Disposals                                |  |                          | 26,320      |   |                       |  | 37,942     |                                |  |  | -         |  
|Foreign currency translation             |  |                          | 218,898     |   |                       |  | 5,171      |                                |  |  | -         |  
|Others                                   |  |                          | (104,710    | ) |                       |  | (43,219    | )                              |  |  | -         |  
|Balance at December 31, 2016             |  |                          | (30,470,415 | ) |                       |  | (1,390,673 | )                              |  |  | -         |  
|Net balance at December 31, 2016         |  |                          | 16,608,681  |   |                       |  | 914,242    |                                |  |  | 4,818,124 |  



| | (1) | The balance of exploration and evaluation mainly includes investments in production projects of
direct operation in Castilla, Chichimene and Piedemonte. Additionally, it includes offshore exploration projects: Fuerte Sur, Kronos
and Tayrona and Onshore: Caño Sur block, CPO 10 and non-conventional hydrocarbons program.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes dry wells in operation of: Ecopetrol COP$302,965, ECP Oil and Gas Germany GmbH COP$26,273,
Ecopetrol America Inc COP$5,032, Hocol S.A COP$5,049, Ecopetrol Brasil COP$3,372.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Corresponds mainly to transfers to: a) non-current assets held for sale COP$244,387 and b) property,
plant and equipment COP$(68,898) and c) other COP$(17,532).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------





F-55


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|                                     |  | Oil and gas investments |             |   | Asset retirement
cost |  |            | Exploration and evaluation (1) |  |  | Total      |  
|------------------------------------ |  | ----------------------- | ----------- | - | --------------------- |  | ---------- | ------------------------------ |  |  | ---------- | -
|Cost                                 |  |                         |             |   |                       |  |            |                                |  |  |            |  
|Balance at December 31, 2014         |  |                         | 37,168,922  |   |                       |  | 1,895,149  |                                |  |  | 6,114,019  |  
|Additions/capitalizations            |  |                         | 5,776,253   |   |                       |  | 9,520      |                                |  |  | 1,070,988  |  
|Decrease in abandonment costs        |  |                         | -           |   |                       |  | (139,670   | )                              |  |  | -          |  
|Disposals                            |  |                         | (13,475     | ) |                       |  | -          |                                |  |  | (56,962    | )
|Dry wells (2)                        |  |                         | -           |   |                       |  | -          |                                |  |  | (1,266,440 | )
|Capitalized interest                 |  |                         | -           |   |                       |  | -          |                                |  |  | 191,365    |  
|Capitalized exchange differences     |  |                         | -           |   |                       |  | -          |                                |  |  | 39,416     |  
|Foreign currency translation         |  |                         | 1,031,595   |   |                       |  | 6,299      |                                |  |  | 272,890    |  
|Other (reclassifications)            |  |                         | 185,058     |   |                       |  | (8,924     | )                              |  |  | (176,134   | )
|Balance at December 31, 2015         |  |                         | 44,148,353  |   |                       |  | 1,762,374  |                                |  |  | 6,189,142  |  
|                                     |  |                         |             |   |                       |  |            |                                |  |  |            |  
|Accumulated depletion and impairment |  |                         |             |   |                       |  |            |                                |  |  |            |  
|Balance at December 31, 2014         |  |                         | (20,223,671 | ) |                       |  | (833,755   | )                              |  |  | -          |  
|Depletion expense                    |  |                         | (3,424,212  | ) |                       |  | (300,650   | )                              |  |  | -          |  
|Impairment (Note 17)                 |  |                         | (2,865,077  | ) |                       |  | -          |                                |  |  | -          |  
|Disposals                            |  |                         | 9,040       |   |                       |  | -          |                                |  |  | -          |  
|Foreign currency translation         |  |                         | (356,815    | ) |                       |  | (61,432    | )                              |  |  | -          |  
|Others                               |  |                         | (14,039     | ) |                       |  | 14,039     |                                |  |  | -          |  
|Balance at December 31, 2015         |  |                         | (26,874,774 | ) |                       |  | (1,181,798 | )                              |  |  | -          |  
|Net balance at December 31, 2015     |  |                         | 17,273,579  |   |                       |  | 580,576    |                                |  |  | 6,189,142  |  



| | (1) | The balance for exploration and evaluation primarily includes investments
in production projects (direct operation) in Castilla, Chichimene, Apiay, Tibu and Piedemonte. It also includes exploration projects:
Kronos, unconventional hydrocarbons and Tayrona.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | It mainly includes dry wells in Ecopetrol S.A. operations for COP$ 912,695, Ecopetrol America Inc.
for COP$131,447, Hocol S.A. for COP$139,362 and ECP Oil and Gas Germany GmbH for COP$82,936.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-56


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Accounting for suspended exploratory wells



The following table shows the classification
by ages, from the completion date, of the exploratory wells that are suspended as of December 31, 2016, 2015 and 2014:



|                                  |  | 2016 |         |  | 2015 |  |         | 2014 | 
|--------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- | 
|Between 1 and 3 years             |  |      | 611,682 |  |      |  | 490,184 |      | 
|Between 3 and 5 years             |  |      | 197,997 |  |      |  | 100,316 |      | 
|More than 5 years                 |  |      | 153,552 |  |      |  | 161,392 |      | 
|Total suspended exploratory wells |  |      | 963,231 |  |      |  | 751,892 |      | 
|No. of projects exceeding 1 year  |  |      | 24      |  |      |  | 59      |      | 
|Wells under 1 year of suspended   |  |      | 90,486  |  |      |  | 280,801 |      | 



It corresponds mainly to exploratory wells
of Ecopetrol, OIG and Hocol.





F-57


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 17. | Impairment on property, plant and equipment and natural
and environmental resources
| | --- | -----------------------------------------------------------------------------------



In accordance with that mentioned in section
4.12 of the accounting policies every year the Company assesses if there are any indications of impairment in its assets or cash
generating units.



The Company is exposed to certain future risks
derived from variations in: a) oil prices, b) refining margins and profitability, c) cost profile, d) investment and maintenance,
e) amount of recoverable reserves, f) market and country risk reflected on the discount rate, g) changes in domestic and international
regulations, etc. Any change in the foregoing variables to calculate the recoverable amount can have a material effect on the recognition
or recovery of impairment charges. For example, the exploration and production segment is highly sensitive to variation of hydrocarbon
prices, while the refining segment is highly sensitive to the discount rate given the leveraging of said segment as well as the
refining margins.



Based on impairment tests conducted by the
Company, the following impairment losses (reversals) were recorded for the years ended on December 31, 2016, 2015 and 2014:



|                                        |  | 2016 |         |   | 2015 |  |           | 2014 | 
|--------------------------------------- |  | ---- | ------- | - | ---- |  | --------- | ---- | 
|Impairment (recovery)                   |  |      |         |   |      |  |           |      | 
|Exploration and production              |  |      | 68,590  |   |      |  | 3,649,451 |      | 
|Refining and petrochemicals             |  |      | 773,361 |   |      |  | 3,278,993 |      | 
|Transportation and logistics            |  |      | (41,062 | ) |      |  | 81,387    |      | 
|                                        |  |      | 800,889 |   |      |  | 7,009,831 |      | 
|Recognized in:                          |  |      |         |   |      |  |           |      | 
|Property, plant and equipment (Note 15) |  |      | 561,738 |   |      |  | 4,144,754 |      | 
|Natural resources (Note 16)             |  |      | 239,151 |   |      |  | 2,865,077 |      | 
|Intangibles (Note 18)                   |  |      | -       |   |      |  | -         |      | 
|                                        |  |      | 800,889 |   |      |  | 7,009,831 |      | 



| | 17.1 | Exploration and production segment
| | ---- | ----------------------------------



The expense (recovery) for impairment of assets
of the exploration and production segment for the years ended December 31, 2016, 2015 and 2014 comprises:



2016



|Cash-generating unit |  | Carrying amount |            |  | Recoverable  amount |  |            | Impairment loss  (reversal) | 
|-------------------- |  | --------------- | ---------- |  | ------------------- |  | ---------- | --------------------------- | 
|Fields in Colombia   |  |                 |            |  |                     |  |            |                             | 
|Expense              |  |                 | 5,258,265  |  |                     |  | 4,902,943  |                             | 
|Recovery             |  |                 | 17,502,391 |  |                     |  | 36,704,807 |                             | 
|Fields abroad        |  |                 |            |  |                     |  |            |                             | 
|Expense              |  |                 | 688,895    |  |                     |  | 647,272    |                             | 
|                     |  |                 |            |  |                     |  |            |                             | 



2015



|Cash-generating unit |  | Carrying amount |            |  | Recoverable  Amount |  |           | Impairment loss  (reversal) | 
|-------------------- |  | --------------- | ---------- |  | ------------------- |  | --------- | --------------------------- | 
|Fields in Colombia   |  |                 | 10,323,500 |  |                     |  | 7,645,665 |                             | 
|Fields abroad        |  |                 | 1,242,979  |  |                     |  | 24,451    |                             | 
|                     |  |                 |            |  |                     |  |           |                             | 



2014



|Cash-generating unit |  | Carrying amount |           |  | Recoverable  Amount |  |           | Impairment loss  (reversal) | 
|-------------------- |  | --------------- | --------- |  | ------------------- |  | --------- | --------------------------- | 
|Fields in Colombia   |  |                 | 4,186,400 |  |                     |  | 5,581,870 |                             | 
|Fields abroad        |  |                 | 477,484   |  |                     |  | 466,242   |                             | 
|                     |  |                 |           |  |                     |  |           |                             | 



F-58


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




In 2016, as a result of revising the expected
long term oil prices it was identified that some impairments recognized in previous years for oil fields should be reversed. The
fields for which there was impairment reversal were mainly Chichimene, Caño Sur, Apiay and Llanito.  On the other hand,
the new technical information and operational aspects that gave rise to changes in investment levels resulted in the recognition
of an impairment charge in Casabe, Tibú, Gunflint and Niscota fields.



The assumptions used in the model to determine
the recoverable amounts include:



| | - | The fair value less the cost of disposal of assets in the exploration and production segment was
determined based on cash flows after taxes that are derived from the business plans approved by Company management; these are developed
on the base of long term macroeconomic variables and fundamental supply and demand assumptions. The fair value category is level
3.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | The discount rate in real terms determined as the weighted average cost of capital of market participants
(WACC) was established for each company in the segment, with rates ranging between 7.9% and 8.9% (2015 – 8.4%).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | Oil price - Brent: The forecasts include US$56.8/barrel for 2017, US$67.9/barrel average for the
next six years and US$80/barrel in the long-term in annual prices. Prices are based on information provided by specialized market
analysts and management analysts. The variation in estimations of future prices are generated by the forecast of fundamentals made
by market analysts which include current scenarios of oil quota agreements of OPEC (Organization of Petroleum Exporting Countries)
and impact of changes on specifications issued by the Marpol (abbreviation of marine pollution) agreement on crude and fuels with
high sulfur content.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For 2015,
the estimated prices were US$40/barrel for the short term reaching US$60 in the medium and long term. Prices were based on information
provided by specialized market analysts and management analysts.



| | - | Certified balance of oil and gas reserves, in addition to prove reserves included in Note 37, probable
and possible reserves were also considered adjusted by different risk factors.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The aggregation of assets to identify the CGU's
is consistent as compared to the prior period.



In 2015, the impairment expense was caused
mostly by the adverse economic context of the hydrocarbon industry, which translated into a decrease in the oil price forecast
and increase in the market and country risks reflected on the discount rate and the reduction on the recoverable amount of reserves.
The most representative cash generating units impacted for the foregoing factors were the oil fields operated at domestic level:
Casabe, Chichimene, Tibú, CP09, Apiay, Llanito and La Hocha and the fields in the Gulf of Mexico K2 and Dalmatian.



| | 17.2 | Refining and petrochemicals segment
| | ---- | -----------------------------------



Assets impairment in the refining and petrochemicals
segment for the years ended December 31, 2016, 2015 and 2014 comprises:



2016



|Cash-generating unit   |  | Carrying amount |            |  | Recoverable  amount |  |            | Expense for  impairment | 
|---------------------- |  | --------------- | ---------- |  | ------------------- |  | ---------- | ----------------------- | 
|Refinería de Cartagena |  |                 | 21,672,367 |  |                     |  | 21,206,515 |                         | 
|Bioenergy              |  |                 | 925,955    |  |                     |  | 618,446    |                         | 
|                       |  |                 | 22,598,322 |  |                     |  | 21,824,961 |                         | 





F-59


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




2015



|Cash-generating unit   |  | Carrying amount |            |  | Recoverable  amount |  |            | Expense for  impairment | 
|---------------------- |  | --------------- | ---------- |  | ------------------- |  | ---------- | ----------------------- | 
|Refinería de Cartagena |  |                 | 26,561,335 |  |                     |  | 23,335,096 |                         | 
|Bioenergy              |  |                 | 642,139    |  |                     |  | 589,386    |                         | 
|                       |  |                 | 27,203,474 |  |                     |  | 23,924,482 |                         | 



2014



|Cash-generating unit   |  | Carrying amount |            |  | Recoverable  amount |  |            | Expense for  impairment | 
|---------------------- |  | --------------- | ---------- |  | ------------------- |  | ---------- | ----------------------- | 
|Refinería de Cartagena |  |                 | 18,794,568 |  |                     |  | 17,469,140 |                         | 
|Otros menores          |  |                 | 100,311    |  |                     |  | 89,581     |                         | 
|                       |  |                 | 18,894,879 |  |                     |  | 17,558,721 |                         | 



Refinería de Cartagena



The recoverable amount for Refinería
de Cartagena was calculated based on the fair value less cost of disposal, with level of hierarchy 3, which corresponds to
the future cash flows discounted after taxes. The assumptions used in the model to determine the recoverable amounts included:
a) an average gross margin of US$18.9/barrel (2015 - US$17.5), determined by specialists of market participants; b) adjustments
associated with effects of the stabilization period; c) an actual discount rate of 6.3% (2015 - 7.2% and 2014 – 7.1%) determined
under the WACC methodology; and d) extension of current conditions and benefits, or similar, as industry user of goods and services
in the free trade zone and during the term of the license.



In 2016, there is an impairment loss generated
mostly by adjustment of operational variables based on observed data during the stabilization period, offset by a lower discount
rate and better refining margins.



The impairment expense in 2015 was caused mostly
by the adverse economic context of the hydrocarbon industry, which translated into reduction of the refining market expectations
in coming years, an increase country and market risk that was reflected on the discount rate.



Bioenergy



The recoverable amount for Bioenergy was calculated
based on the value in use, which is greater than the fair value less cost of disposal and corresponds to future cash flows discounted
before taxes. The assumptions used in the model to determine the recoverable amount included: a) forecast of ethanol prices based
on projections made by home office specialists; and b) a 6.7% discount rate in actual terms (2015 – 6.8% in actual terms)
determined under the WACC methodology.



In 2016 and 2015, the Company recorded an impairment
loss, due to mainly by the updating of the start date of operations and changes in product price projections.



| | 17.3 | Transportation and logistics segment
| | ---- | ------------------------------------



In 2016, there was an impairment recovery for
the transport and logistics segment for COP$41,062 (2015 - COP$81,387 and 2014 - COP$496 of impairment expense) mainly by the incorporation
of flows associated to the San Fernando - Apiay system project that affects the recoverable amount of the Llanos transport line,
offset with greater impairment on the southern transport line. The recoverable amount of these assets was determined based on its
fair value less disposal costs with level of hierarchy 3, which corresponds to discounted cash flows based on the hydrocarbon production
curves and rates regulated by the Ministry of Mines and Energy and the Energy and Gas Regulating Commission - CREG. The actual
discount rate used in the valuation was 4.98% (2015 - 5.9% and 2014 -7.2%).





F-60


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 18. | Intangibles
| | --- | -----------



The following shows a breakdown of the changes
in Intangibles and their amortization for the years ended December 31, 2016 and 2015:



|                                 |  | Licenses and software |          |   | Other intangibles (1) |  |          | Total | 
|-------------------------------- |  | --------------------- | -------- | - | --------------------- |  | -------- | ----- | 
|Cost                             |  |                       |          |   |                       |  |          |       | 
|Balance at December 31, 2015     |  |                       | 733,115  |   |                       |  | 244,063  |       | 
|Additions                        |  |                       | 63,560   |   |                       |  | 5,693    |       | 
|Disposals                        |  |                       | (29,099  | ) |                       |  | -        |       | 
|Foreign currency translation     |  |                       | (9,359   | ) |                       |  | (149     | )     | 
|Reclassifications                |  |                       | 26,103   |   |                       |  | (110,625 | )     | 
|Balance at December 31, 2016     |  |                       | 784,320  |   |                       |  | 138,982  |       | 
|                                 |  |                       |          |   |                       |  |          |       | 
|Accumulated amortization         |  |                       |          |   |                       |  |          |       | 
|Balance at December 31, 2015     |  |                       | (533,784 | ) |                       |  | (55,343  | )     | 
|Amortization expense             |  |                       | (81,913  | ) |                       |  | (28,142  | )     | 
|Disposals                        |  |                       | 29,097   |   |                       |  | -        |       | 
|Foreign currency translation     |  |                       | 8,527    |   |                       |  | 1        |       | 
|Reclassifications                |  |                       | (5,607   | ) |                       |  | 15,994   |       | 
|Balance at December 31, 2016     |  |                       | (583,680 | ) |                       |  | (67,490  | )     | 
|                                 |  |                       |          |   |                       |  |          |       | 
|Net balance at December 31, 2016 |  |                       | 200,640  |   |                       |  | 71,492   |       | 
|Useful life                      |  |                       | <5 years |   |                       |  | <7 years |       | 



|                                 |  | Licenses and  software |          |   | Other intangibles (1) |  |          | Total | 
|-------------------------------- |  | ---------------------- | -------- | - | --------------------- |  | -------- | ----- | 
|Cost                             |  |                        |          |   |                       |  |          |       | 
|Balance at December 31, 2014     |  |                        | 575,535  |   |                       |  | 127,519  |       | 
|Additions                        |  |                        | 107,815  |   |                       |  | 4,440    |       | 
|Disposals                        |  |                        | (615     | ) |                       |  | -        |       | 
|Foreign currency translation     |  |                        | 53,242   |   |                       |  | -        |       | 
|Reclassifications                |  |                        | (2,862   | ) |                       |  | 112,104  |       | 
|Balance at December 31, 2015     |  |                        | 733,115  |   |                       |  | 244,063  |       | 
|                                 |  |                        |          |   |                       |  |          |       | 
|Accumulated amortization         |  |                        |          |   |                       |  |          |       | 
|Balance at December 31, 2014     |  |                        | (425,357 | ) |                       |  | (32,545  | )     | 
|Amortization expense             |  |                        | (66,043  | ) |                       |  | (24,196  | )     | 
|Disposals                        |  |                        | 309      |   |                       |  | 23       |       | 
|Foreign currency translation     |  |                        | (41,318  | ) |                       |  | -        |       | 
|Reclassifications                |  |                        | (1,375   | ) |                       |  | 1,375    |       | 
|Balance at December 31, 2015     |  |                        | (533,784 | ) |                       |  | (55,343  | )     | 
|                                 |  |                        |          |   |                       |  |          |       | 
|Net balance at December 31, 2015 |  |                        | 199,331  |   |                       |  | 188,720  |       | 
|Useful life                      |  |                        | <5 years |   |                       |  | <7 years |       | 



| | (1) | It includes mainly easements and right of use of the pipeline Caño Limón - Coveñas.
| | --- | -----------------------------------------------------------------------------------





F-61


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 19. | Goodwill
| | --- | --------



The balance at December 31, 2016 and 2015 of Goodwill from acquisitions
of controlled companies is comprised as follows:



|                                             |  | 2016 |           |   | 2015 | 
|-------------------------------------------- |  | ---- | --------- | - | ---- | 
|Transportation and logistics                 |  |      |           |   |      | 
|Oleoducto Central S.A.                       |  |      | 683,496   |   |      | 
|Exploration and production                   |  |      |           |   |      | 
|Hocol Petroleum Limited                      |  |      | 537,598   |   |      | 
|Refining and petrochemicals                  |  |      |           |   |      | 
|Andean Chemical Limited                      |  |      | 127,812   |   |      | 
|Propilco S.A.                                |  |      | 108,137   |   |      | 
|                                             |  |      | 1,457,043 |   |      | 
|Less: Impairment loss of Hocol Petroleum Ltd |  |      | (297,121  | ) |      | 
|Total                                        |  |      | 1,159,922 |   |      | 



At December 31, 2016, the Company assessed
the recoverability of the carrying value of goodwill generated in the acquisition of controlled companies. The recoverable amount
was determined based on the fair value less cost of disposal using the present value of future cash flows for each of the companies
acquired. Future cash flows was based on financial projections of each company derived from the business plans approved by management,
which were developed based on long term macro-economic factors such as price curves and margins and fundamental assumptions of
supply and demand. As a result of the analysis the Company did not identify any goodwill impairment.



In 2015, given the adverse economic environment
faced by the hydrocarbon sector the Company was exposed to certain future risks such as a further decline in oil prices, lower
refining margins, lower profit margins, changes in cost profiles, changes in levels of capital expenditures and maintenance, a
reduction in recoverable reserves amount, and an increase in market and country risk that is reflected in a higher discount rate.
Any significant change in the estimates and judgments used to calculate these variables can have a material effect on the recognition
of goodwill impairment charges. Different variables have different impact on segments. For example, the Exploration and Production
segment is highly sensitive to the price of hydrocarbons, while the Refining segment is highly sensitive to the discount rate given
the leverage in that segment. As a result, at December 31, 2015 the company recognized a goodwill impairment of COP$266,900 in
Hocol Petroleum Limited, due mainly from the current adverse economic context faced by the hydrocarbon sector. Regarding goodwill
allocated to the Transportation and Logistics Segment and the Refining and Petrochemicals Segment Ecopetrol did not identify the
need to recognize any goodwill impairment.





F-62


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 20. | Loans and borrowings
| | --- | --------------------



| | 20.1 | Composition of loans and borrowings
| | ---- | -----------------------------------



The balance at December 31, 2016 and 2015 is comprised as follows:



|                                       |  | Weighted average  effective interest rate at  December 31, 2016 / 2015 |  | 2016 |            |  | 2015 | 
|-------------------------------------- |  | ---------------------------------------------------------------------- |  | ---- | ---------- |  | ---- | 
|Local currency                         |  |                                                                        |  |      |            |  |      | 
|Bonds                                  |  | 8.6% / 9.8%                                                            |  |      | 2,008,203  |  |      | 
|Syndicated loan                        |  | 9.5% / 7.7%                                                            |  |      | 3,828,329  |  |      | 
|Commercial loans and other             |  | 9.1% / 7.9%                                                            |  |      | 905,266    |  |      | 
|Total local currency                   |  |                                                                        |  |      | 6,741,798  |  |      | 
|                                       |  |                                                                        |  |      |            |  |      | 
|Foreign currency                       |  |                                                                        |  |      |            |  |      | 
|Bonds                                  |  | 6.0% / 6.1%                                                            |  |      | 29,310,165 |  |      | 
|Commercial loan-Refinería de Cartagena |  | 4.1% / 4.1%                                                            |  |      | 7,988,678  |  |      | 
|Other commercial loans                 |  | 2.9% / 2.1%                                                            |  |      | 7,945,693  |  |      | 
|Other (1)                              |  |                                                                        |  |      | 235,693    |  |      | 
|Total foreign currency                 |  |                                                                        |  |      | 45,480,229 |  |      | 
|Total loans and borrowings             |  |                                                                        |  |      | 52,222,027 |  |      | 
|Less short-term                        |  |                                                                        |  |      | 4,126,203  |  |      | 
|Total long-term                        |  |                                                                        |  |      | 48,095,824 |  |      | 



| | (1) | Includes financial leasing and build, operation, maintenance and transfer contracts.
| | --- | ------------------------------------------------------------------------------------



| | 20.2 | New borrowings
| | ---- | --------------



The main financing operations during 2016 and
2015 were as follows:



Bonds – Foreign currency



| | - | On June 8, 2016, Ecopetrol reopened its bonds maturing in September 2023 for US$ 500 million, with
payment of principal at maturity and interest payable semi-annually at a coupon rate of 5.875%. The new total outstanding amount
of the bond is US$1.8 billion.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | At June 2015, Ecopetrol S.A. issued US$1,500 million
of bonds in the international market with payment of principal at maturity (June 26, 2026) and interest payable semi-anually at
a coupon rate of 5.375%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Commercial loans



| | § | On January 29, 2016, Ecopetrol entered into a commercial loan for US$175 million with The Bank
of Tokyo-Mitsubushi UFJ, Ltd. This loan has a 5 years term, is amortizable with a 2.5 years of grace period on principal and interest
is payable semi-annually at a rate of 6-M Libor + 145 basis points.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-63


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | § | On
May 16, 2016, Ecopetrol entered into a commercial loan for US$300 million with Export Development Canada, the Canadian government’s
export promotion agency. This loan has a 5-year term with principal
payable at maturity and interest payable semi-annually at a rate of 6-M Libor +
140 basis points rate.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On February 23, 2016, Ecopetrol entered into a commercial loan for COP$990,000 with Bancolombia
S.A. which was canceled in early October 2016. This loan had an 8-year term, amortizable with a 2 years grace period on capital
with interest payable semi-annually at a DTF rate of TA + 560 basis points.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In February 2015, Ecopetrol S.A. entered into a commercial loan for US$1,925 million. The operation
was conducted with the participation of 8 international banks. The loan maturity date is February 2020 payable at maturity with
semiannual interest payments at Libor + 140 basis points.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the acquisition of the above credits, no
guarantees have been granted due to the support of the Colombian Government through the Ministry of Finance and Public Credit.



Other



During 2016, the Company
fully paid the short-term remittances financed in dollars with domestic banks for the payment of imports that were in effect as
of December 31, 2015 in the amount of US$203 million with a financing rate of Libor + 65 basis points.



F-64


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The following table details the main characteristics
of the most significant loans of the Ecopetrol Business Group at December 31, 2016:





|                    |  |                        |  |                   |  |          |  | Initial
                                         amount at original
                                         currency |           |  | Balance at December 31, |  |           |      |  |  |           | Principal |                   | Interest |        
|------------------- |  | ---------------------- |  | ----------------- |  | -------- |  | --------------------------------------------------------------------------------------------------------------------- | --------- |  | ----------------------- |  | --------- | ---- |  |  | --------- | --------- | ----------------- | -------- | -------
|Type                |  | Company                |  | Starting
    date |  | Currency |  | (millions)                                                                                                            |           |  | 2016                    |  |           | 2015 |  |  | Maturity  |           | Interest
    rate |          | payment
|                    |  |                        |  | Dec-10            |  | COP $    |  |                                                                                                                       | 138,700   |  |                         |  | 138,700   |      |  |  | 138,700   |           |                   | dec-17   |        
|                    |  |                        |  | Dec-10            |  | COP $    |  |                                                                                                                       | 479,900   |  |                         |  | 479,900   |      |  |  | 479,900   |           |                   | dec-20   |        
|                    |  |                        |  | Dec-10            |  | COP $    |  |                                                                                                                       | 284,300   |  |                         |  | 284,300   |      |  |  | 284,300   |           |                   | dec-40   |        
|Bonds in            |  | Ecopetrol S.A          |  | Aug-13            |  | COP $    |  |                                                                                                                       | 120,950   |  |                         |  | 120,950   |      |  |  | 120,950   |           |                   | aug-18   |        
|local-currency      |  |                        |  | Aug-13            |  | COP $    |  |                                                                                                                       | 168,600   |  |                         |  | 168,600   |      |  |  | 168,600   |           |                   | aug-23   |        
|                    |  |                        |  | Aug-13            |  | COP $    |  |                                                                                                                       | 347,500   |  |                         |  | 347,500   |      |  |  | 347,500   |           |                   | aug-28   |        
|                    |  |                        |  | Aug-13            |  | COP $    |  |                                                                                                                       | 262,950   |  |                         |  | 262,950   |      |  |  | 262,950   |           |                   | aug-43   |        
|Syndicated loan     |  | Ecopetrol S.A.         |  | May-13            |  | COP $    |  |                                                                                                                       | 1,839,000 |  |                         |  | 1,736,833 |      |  |  | 1,839,000 |           |                   | may-25   |        
|in local-currency   |  | Oleoducto Bicentenario |  | Jul-12            |  | COP $    |  |                                                                                                                       | 2,100,000 |  |                         |  | 1,549,625 |      |  |  | 1,717,625 |           |                   | jul-24   |        
|                    |  | ODL Finance S.A.       |  | Aug-13            |  | COP $    |  |                                                                                                                       | 800,000   |  |                         |  | 480,000   |      |  |  | 608,000   |           |                   | aug-20   |        
|                    |  |                        |  | Jul-09            |  | US$      |  |                                                                                                                       | 1,500     |  |                         |  | 1,500     | **   |  |  | 1,500     |           |                   | jul-19   |        
|                    |  |                        |  | Sep-13            |  | US$      |  |                                                                                                                       | 350       |  |                         |  | 350       | **   |  |  | 350       |           |                   | sep-18   |        
|                    |  |                        |  | Sep-13            |  | US$      |  |                                                                                                                       | 1,300     |  |                         |  | 1,800     | **   |  |  | 1,300     |           |                   | sep-23   |        
|                    |  |                        |  | Sep-13            |  | US$      |  |                                                                                                                       | 850       |  |                         |  | 850       |      |  |  | 850       |           |                   | sep-43   |        
|Bonds in foreign    |  | Ecopetrol S.A.         |  | May-14            |  | US$      |  |                                                                                                                       | 2,000     |  |                         |  | 2,000     | **   |  |  | 2,000     |           |                   | may-45   |        
|currency            |  |                        |  | Sep-14            |  | US$      |  |                                                                                                                       | 1,200     |  |                         |  | 1,200     | **   |  |  | 1,200     |           |                   | may-25   |        
|                    |  |                        |  | Jun-15            |  | US$      |  |                                                                                                                       | 1,500     |  |                         |  | 1,500     | **   |  |  | 1,500     |           |                   | jun-26   |        
|                    |  |                        |  | Jun-16            |  | US$      |  |                                                                                                                       | 500       |  |                         |  | 500       | **   |  |  | -         |           |                   | aug-23   |        
|                    |  | Oleoducto Central S.A. |  | May-14            |  | US$      |  |                                                                                                                       | 500       |  |                         |  | 500       | **   |  |  | 500       |           |                   | may-21   |        
|                    |  | Refinería de           |  | Dec-11            |  | US$      |  |                                                                                                                       | 2,747     |  |                         |  | 2,177     |      |  |  | 2,394     |           |                   | dec-27   |        
|                    |  | Cartagena S.A.         |  | Dec-11            |  | US$      |  |                                                                                                                       | 310       |  |                         |  | 246       |      |  |  | 270       |           |                   | dec-27   |        
|                    |  |                        |  | Dec-11            |  | US$      |  |                                                                                                                       | 440       |  |                         |  | 374       |      |  |  | 402       |           |                   | dec-25   |        
|                    |  |                        |  | Mar-13            |  | US$      |  |                                                                                                                       | 245       |  |                         |  | 171       | **   |  |  | 196       |           |                   | jul-23   |        
|Commercial loans    |  |                        |  | Mar-13            |  | US$      |  |                                                                                                                       | 151       |  |                         |  | 66        | **   |  |  | 105       |           |                   | jul-19   |        
|in foreign currency |  | Ecopetrol S.A.         |  | Feb-15            |  | US$      |  |                                                                                                                       | 1,925     |  |                         |  | 1,925     | **   |  |  | 1,925     |           |                   | feb-20   |        
|                    |  |                        |  | Feb-16            |  | US$      |  |                                                                                                                       | 175       |  |                         |  | 175       |      |  |  | -         |           |                   | feb-21   |        
|                    |  |                        |  | May-16            |  | US$      |  |                                                                                                                       | 300       |  |                         |  | 300       |      |  |  | -         |           |                   | may-21   |        



* Bullet: Nominal value is fully paid on the maturity
date.

** Loans designated as hedging instrument (see Note 31).



F-65


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 20.3 | Maturity of loans and borrowings
| | ---- | --------------------------------



The following is the maturity profile of loans as of December 31,
2016:



|                                       |  | Up to 1 
year |           |  | 1 - 5 years |  |            | 5-10 years |  |  | > 10 years |  |  | Total |          
|-------------------------------------- |  | ------------- | --------- |  | ----------- |  | ---------- | ---------- |  |  | ---------- |  |  | ----- | ---------
|Local currency                         |  |               |           |  |             |  |            |            |  |  |            |  |  |       |          
|Bonds                                  |  |               | 312,207   |  |             |  | 955,204    |            |  |  | 357,015    |  |  |       | 383,777  
|Commercial loans                       |  |               | 793,743   |  |             |  | 2,375,023  |            |  |  | 659,563    |  |  |       | -        
|Others                                 |  |               | 58,952    |  |             |  | 333,372    |            |  |  | 339,009    |  |  |       | 173,933  
|Total local currency                   |  |               | 1,164,902 |  |             |  | 3,663,599  |            |  |  | 1,355,587  |  |  |       | 557,710  
|                                       |  |               |           |  |             |  |            |            |  |  |            |  |  |       |          
|Foreign currency                       |  |               |           |  |             |  |            |            |  |  |            |  |  |       |          
|Bonds                                  |  |               | 1,648,707 |  |             |  | 10,956,507 |            |  |  | 12,133,576 |  |  |       | 4,571,375
|Commercial loan Refinería de Cartagena |  |               | 875,734   |  |             |  | 3,549,216  |            |  |  | 3,472,379  |  |  |       | 91,349   
|Other commercial loans                 |  |               | 371,804   |  |             |  | 7,450,587  |            |  |  | 123,302    |  |  |       | -        
|Other                                  |  |               | 65,056    |  |             |  | 114,226    |            |  |  | 56,411     |  |  |       | -        
|Total foreign currency                 |  |               | 2,961,301 |  |             |  | 22,070,536 |            |  |  | 15,785,668 |  |  |       | 4,662,724
|Total                                  |  |               | 4,126,203 |  |             |  | 25,734,135 |            |  |  | 17,141,255 |  |  |       | 5,220,434



| | 20.4 | Breakdown by type of interest rate
| | ---- | ----------------------------------



|                           |  | 2016 |            |  | 2015 | 
|-------------------------- |  | ---- | ---------- |  | ---- | 
|Local - currency           |  |      |            |  |      | 
|Fixed interest rate        |  |      | 299,472    |  |      | 
|Floating interest rate     |  |      | 6,442,326  |  |      | 
|                           |  |      | 6,741,798  |  |      | 
|Foreign currency           |  |      |            |  |      | 
|Fixed interest rate        |  |      | 35,719,486 |  |      | 
|Floating interest rate     |  |      | 9,760,743  |  |      | 
|                           |  |      | 45,480,229 |  |      | 
|Total loans and borrowings |  |      | 52,222,027 |  |      | 



Local currency loans and borrowings at floating
rates are mainly indexed to the CPI (Consumer Price Index) and DTF (Fixed Term Deposit). The foreign currency loans and borrowings
at floating rates are indexed mainly to Libor plus a spread.



| | 20.5 | Loans designated as hedging instruments
| | ---- | ---------------------------------------



As of December 31, 2016 the Company designated
US$10,512 million of foreign currency debt as a hedging instrument; of which US$5,312 million correspond to the cash flow hedge
for future crude exports and US$5,200 million to hedge investments in subsidiaries with the US dollar as their functional currency.
See Note 31 - Risk management, for further information.



F-66


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 20.6 | Guarantees and covenants
| | ---- | ------------------------



For financing obtained by Ecopetrol in the
capital markets, which correspond to issuance of local and foreign bonds that, are not guaranteed due to the support of the Colombian
Government through the Ministry of Finance and Public Credit.



Refinería de Cartagena (Reficar)
carried out an international commercial loan for US$3,497 million to finance the expansion project of Cartagena Refinery in 2011.
This operation imposes restrictions on Reficar’s debt ratio, except for certain conditions expressly set out in contracts
about working capital needs. Regarding the financial covenants Reficar is required to maintain a coverage ratio of minimum debt
service of 1.35: 1 at certain times of the loan’s life. This subsidiary is in compliance with all covenants and debt commitments
as of December 31, 2016.



Under the same transaction Reficar entered
into a commercial trust and Security and Depositary Agreement to receive the resources of the new refinery to meet specific purposes
such as operating expenses, interest and others.



In the case of financing obtained by Oleoducto
Bicentenario S.A.S. for the construction of the project and startup of the pipeline the creation of a main fund was established
to manage the funds for the payment of the syndicated loan.



| | 20.7 | Fair value of loans
| | ---- | -------------------



The fair value of the loans is COP$52,109,438
and COP$49,668,119 as of December 31, 2016 and 2015, respectively.



Loans are recorded in the financial statements
at their amortized cost, which is the financial amount of initial recognition less principal repayments, plus or minus the cumulative
amortization using the effective interest method of any difference between that initial amount and the maturity amount.



For fair value measurement, bonds and local
currency securities were valued using Infovalmer's reference prices, while for dollar-denominated bonds the Bloomberg methodology
was used as the source. With regard to the other financial obligations for which there is no market benchmark a discount to present
value technique was used. These rates incorporate market risk through some benchmark (Libor, DTF) and the Company's credit risk
(spread).





F-67


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 21. | Trade and other payables
| | --- | ------------------------



The balance at December 31, 2016 and 2015 of trade and other payables
is comprised as follows:



|                                      |  | 2016 |           |  | 2015 | 
|------------------------------------- |  | ---- | --------- |  | ---- | 
|Suppliers                             |  |      | 4,687,353 |  |      | 
|Partners’ advances                    |  |      | 864,971   |  |      | 
|Withholding tax                       |  |      | 379,194   |  |      | 
|Deposits received from third parties  |  |      | 209,570   |  |      | 
|Related parties (Note 32)             |  |      | 114,420   |  |      | 
|Agreements in transport contracts (2) |  |      | 111,899   |  |      | 
|Insurance and reinsurance             |  |      | 110,530   |  |      | 
|Dividends payable (1)                 |  |      | 11,193    |  |      | 
|Various creditors                     |  |      | 389,126   |  |      | 
|                                      |  |      | 6,878,256 |  |      | 
|                                      |  |      |           |  |      | 
|Current                               |  |      | 6,854,363 |  |      | 
|Non-current                           |  |      | 23,893    |  |      | 
|                                      |  |      | 6,878,256 |  |      | 



| | (1) | During the first quarter of 2016 the last installment of dividends on 2014 net profits was paid
to the Ministry of Finance and Public Credit by COP$690,177
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Corresponds to the value of the debt for agreements in the contracts of transport by pipelines
and poliducts calculated in the volume compensation by quality and other agreements of management of inventories.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying amount of trade accounts and other
accounts payable approximates their fair value due to its short-term nature.



| | 22. | Provisions for employee benefits
| | --- | --------------------------------



The following are the balances of provisions for employee benefits
as of December 31, 2016 and 2015:



|                                                 |  | 2016 |           |   | 2015 | 
|------------------------------------------------ |  | ---- | --------- | - | ---- | 
|Post-employment benefits                         |  |      |           |   |      | 
|Healthcare                                       |  |      | 4,475,540 |   |      | 
|Pension                                          |  |      | 531,596   |   |      | 
|Education                                        |  |      | 333,379   |   |      | 
|Bonds                                            |  |      | (191,338  | ) |      | 
|Other                                            |  |      | 67,945    |   |      | 
|Termination benefits - Voluntary retirement plan |  |      | 161,796   |   |      | 
|                                                 |  |      | 5,378,918 |   |      | 
|Welfare benefits and salaries payable            |  |      | 423,360   |   |      | 
|Other post-employment benefits                   |  |      | 73,300    |   |      | 
|Total                                            |  |      | 5,875,578 |   |      | 
|Current                                          |  |      | 1,974,496 |   |      | 
|Non-current                                      |  |      | 3,901,082 |   |      | 
|                                                 |  |      | 5,875,578 |   |      | 

F-68


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 22.1 | Post-employment
                                         benefits liability (asset)
| | ---- | -----------------------------------------------------------------------------------



The following table shows the movement in liabilities and assets,
net of post-employment benefits and termination benefits at December 31, 2016 and 2015:



|                                               |  | Pension and pension bonds (1) |            |   | Healthcare, Education and others |  |            | Total | 
|---------------------------------------------- |  | ----------------------------- | ---------- | - | -------------------------------- |  | ---------- | ----- | 
|                                               |  | 2016                          |            |   | 2015                             |  |            | 2016  | 
|Employee benefits liabilities                  |  |                               |            |   |                                  |  |            |       | 
|Opening balance                                |  |                               | 10,435,546 |   |                                  |  | 11,559,018 |       | 
|Current service cost                           |  |                               | -          |   |                                  |  | -          |       | 
|Past service cost                              |  |                               | -          |   |                                  |  | -          |       | 
|Interest expense                               |  |                               | 876,076    |   |                                  |  | 839,716    |       | 
|Actuarial losses (gains)                       |  |                               | 1,915,767  |   |                                  |  | (1,252,017 | )     | 
|Paid benefits                                  |  |                               | (763,956   | ) |                                  |  | (711,171   | )     | 
|Closing balance                                |  |                               | 12,463,433 |   |                                  |  | 10,435,546 |       | 
|                                               |  |                               |            |   |                                  |  |            |       | 
|Plan assets                                    |  |                               |            |   |                                  |  |            |       | 
|Opening balance                                |  |                               | 11,181,604 |   |                                  |  | 11,657,629 |       | 
|Return on assets                               |  |                               | 950,704    |   |                                  |  | 849,556    |       | 
|Change in the effect of the asset ceiling      |  |                               | 379,884    |   |                                  |  | (329,825   | )     | 
|Paid benefits                                  |  |                               | (771,528   | ) |                                  |  | (711,432   | )     | 
|Actuarial gains (losses)                       |  |                               | 382,511    |   |                                  |  | (284,324   | )     | 
|Closing balance                                |  |                               | 12,123,175 |   |                                  |  | 11,181,604 |       | 
|Net post-employment benefits liability (asset) |  |                               | 340,258    |   |                                  |  | (746,058   | )     | 



| | (1) | There is no service cost for pension and pension plans because the beneficiaries were all retired by July 31, 2010.
| | --- | -------------------------------------------------------------------------------------------------------------------



F-69


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The following table shows the movement in results
and other comprehensive income as of December 31, 2016 and 2015:



|                                          |  | 2016 |            |   | 2015 | 
|----------------------------------------- |  | ---- | ---------- | - | ---- | 
|Recognized in profit or loss              |  |      |            |   |      | 
|Current service cost                      |  |      | 53,771     |   |      | 
|Past service cost                         |  |      | 164,271    |   |      | 
|Interest expense, net                     |  |      | 263,216    |   |      | 
|                                          |  |      | 481,258    |   |      | 
|Recognized in other comprehensive income  |  |      |            |   |      | 
|Healthcare                                |  |      | (792,093   | ) |      | 
|Pension and pension bonds                 |  |      | (1,533,256 | ) |      | 
|Education and severance                   |  |      | 175,259    |   |      | 
|Termination benefits                      |  |      | 67         |   |      | 
|Change in the effect of the asset ceiling |  |      | 379,884    |   |      | 
|                                          |  |      | (1,770,139 | ) |      | 
|Deferred tax                              |  |      | 616,697    |   |      | 
|Other comprehensive income, net of taxes  |  |      | (1,153,442 | ) |      | 



| | 22.2 | Plan assets
| | ---- | -----------



Plan assets are represented in the resources
provided to Pension Trusts, for payment of the pension liabilities relating to the obligations for monthly pension payments and
bonds; that pertaining to health and education is under the responsibility of Ecopetrol. The destination of trust resources and
its yields cannot be changed or returned to the Company until all pension obligations have been fulfilled.



The composition by investment type is comprised
as follows at December 31, 2016 and 2015:



|                                         |  | 2016 |            |  | 2015 | 
|---------------------------------------- |  | ---- | ---------- |  | ---- | 
|Bonds issued by the Colombian Government |  |      | 4,410,326  |  |      | 
|Bonds of private entities                |  |      | 2,880,958  |  |      | 
|Other bonds of public entities           |  |      | 693,061    |  |      | 
|Bonds of foreign entities                |  |      | 622,817    |  |      | 
|Variable yield                           |  |      | 305,052    |  |      | 
|Other local currency                     |  |      | 2,910,083  |  |      | 
|Other foreign currency                   |  |      | 300,878    |  |      | 
|Fair value of plan assets                |  |      | 12,123,175 |  |      | 
|Less asset ceiling                       |  |      | -          |  |      | 
|                                         |  |      | 12,123,175 |  |      | 



The yield on plan assets as of December 31, 2016 was 11.60% (4.96%
- 2015). The credit quality of issuers and counterparties in transactions involving plan assets is described in Note 31.3 –
Credit risk.



The following is the fair value hierarchy of the plan assets as
of December 31, 2016 and 2015:



|        |  | 2016 |            |  | 2015 | 
|------- |  | ---- | ---------- |  | ---- | 
|Level 1 |  |      | 5,604,643  |  |      | 
|Level 2 |  |      | 6,518,532  |  |      | 
|        |  |      | 12,123,175 |  |      | 



The fair value of the plan assets is calculated
using prices quoted in the relevant assets’ market. The Company obtains these prices through reliable financial data suppliers
recognized in Colombia or abroad depending on the investment.





F-70


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




For the securities issued in local currency
the fair value of the plan assets is calculated using information published by Infovalmer, a supplier of prices authorized by the
Superintendency of Finance. According to its methodology prices may be calculated based on market information at the valuation
date or estimated based on historic inputs in accordance with the criteria established for the calculation of each of the prices.



The fair value is calculated based on the most
representative market of the transactions carried out through electronic platforms approved and supervised by the regulator.



The estimated price is calculated for investments
that do not reflect sufficient information to estimate an average market price replicating quoted prices for similar assets or
prices obtained through stock broker quotes. This estimated price is also given by Infovalmer as a result of the application of
robust methodologies approved by the financial regulator and widely used by the financial sector.



| | 22.3 | Actuarial assumptions
| | ---- | ---------------------



The following are the actuarial assumptions
used in determining the present value of defined employee benefit obligations at December 31, 2016 and 2015:



|2016                    |  | Pension |      |   | Bonds |  |      | Healthcare |  |  | Education |   |  | Other benefits (1) |     
|----------------------- |  | ------- | ---- | - | ----- |  | ---- | ---------- |  |  | --------- | - |  | ------------------ | ----
|Discount rate           |  |         | 7.25 | % |       |  | 7.00 | %          |  |  | 7.25      | % |  |                    | 6.50
|Salary growth rate      |  |         | N/A  |   |       |  | N/A  |            |  |  | N/A       |   |  |                    | N/A 
|Expected inflation rate |  |         | 3.00 | % |       |  | 3.00 | %          |  |  | 3.00      | % |  |                    | 3.00
|Pension growth rate     |  |         | 3.00 | % |       |  | N/A  |            |  |  | N/A       |   |  |                    | N/A 
|Cost trend              |  |         |      |   |       |  |      |            |  |  |           |   |  |                    |     
|Short-term rate         |  |         | N/A  |   |       |  | N/A  |            |  |  | 3.00      | % |  |                    | 4.00
|Long-term rate          |  |         | N/A  |   |       |  | N/A  |            |  |  | 4.00      | % |  |                    | 4.00



|2015                    |  | Pension |      |   | Bonds |  |      | Healthcare |  |  | Education |   |  | Other benefits (1) |     
|----------------------- |  | ------- | ---- | - | ----- |  | ---- | ---------- |  |  | --------- | - |  | ------------------ | ----
|Discount rate           |  |         | 8.50 | % |       |  | 8.50 | %          |  |  | 8.50      | % |  |                    | 7.75
|Salary growth rate      |  |         | 4.25 | % |       |  | N/A  |            |  |  | N/A       |   |  |                    | N/A 
|Expected inflation rate |  |         | 3.00 | % |       |  | 3.00 | %          |  |  | 3.00      | % |  |                    | 3.00
|Pension growth rate     |  |         | 3.00 | % |       |  | N/A  |            |  |  | N/A       |   |  |                    | N/A 
|Cost trend              |  |         |      |   |       |  |      |            |  |  |           |   |  |                    |     
|Short-term rate         |  |         | N/A  |   |       |  | N/A  |            |  |  | 3.50      | % |  |                    | 4.00
|Long-term rate          |  |         | N/A  |   |       |  | N/A  |            |  |  | 4.00      | % |  |                    | 4.00



N/A: Not applicable for this benefit.

| | (1) | Weighted average rates.
| | --- | -----------------------



The cost trend is the projected increase for
the initial year which includes the expected inflation rate.



The mortality table used for all calculations
was  ́Valid Annuitants” for men and women based on the experience gained for the period 2005-2008 of the Colombian Social
Security Institute – ISS.





F-71


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 22.4 | Maturity of benefit obligation
| | ---- | ------------------------------



The cash flow required for post-employment benefits liability is
comprised as follows:



|Period    |  | Pension and  pension bonds |           |  | Other benefits |  |           | Total | 
|--------- |  | -------------------------- | --------- |  | -------------- |  | --------- | ----- | 
|2017      |  |                            | 794,566   |  |                |  | 330,539   |       | 
|2018      |  |                            | 820,364   |  |                |  | 328,351   |       | 
|2019      |  |                            | 842,858   |  |                |  | 330,878   |       | 
|2020      |  |                            | 864,392   |  |                |  | 333,292   |       | 
|2021      |  |                            | 886,464   |  |                |  | 336,423   |       | 
|2022-2025 |  |                            | 4,877,784 |  |                |  | 1,672,066 |       | 



| | 22.5 | Sensitivity analysis
| | ---- | --------------------



The sensitivity analysis below has been determined
based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while keeping
all other assumptions as constant, at December 31, 2016:



|                   |  | Pension |            |  | Pension bonds |  |         | Healthcare |  |  | Education |  |  | Other  benefits |        
|------------------ |  | ------- | ---------- |  | ------------- |  | ------- | ---------- |  |  | --------- |  |  | --------------- | -------
|Discount rate      |  |         |            |  |               |  |         |            |  |  |           |  |  |                 |        
|-50 basis points   |  |         | 12,278,122 |  |               |  | 894,404 |            |  |  | 4,785,817 |  |  |                 | 345,279
|+50 basis points   |  |         | 10,996,917 |  |               |  | 815,680 |            |  |  | 4,197,636 |  |  |                 | 329,870
|Inflation rate     |  |         |            |  |               |  |         |            |  |  |           |  |  |                 |        
|-50 basis points   |  |         | 10,946,122 |  |               |  | 814,065 |            |  |  | -         |  |  |                 | -      
|+50 basis points   |  |         | 12,330,307 |  |               |  | 895,826 |            |  |  | -         |  |  |                 | -      
|Salary growth rate |  |         |            |  |               |  |         |            |  |  |           |  |  |                 |        
|-50 basis points   |  |         | -          |  |               |  | -       |            |  |  | -         |  |  |                 | -      
|+50 basis points   |  |         | -          |  |               |  | -       |            |  |  | -         |  |  |                 | -      
|Cost trend         |  |         |            |  |               |  |         |            |  |  |           |  |  |                 |        
|-50 basis points   |  |         | -          |  |               |  | -       |            |  |  | 4,198,775 |  |  |                 | 330,360
|+50 basis points   |  |         | -          |  |               |  | -       |            |  |  | 4,782,280 |  |  |                 | 344,700



The Company conducted a sensitivity analysis
related to the interest rate variation on plan assets. See section 30 – Risk management.



| | 22.6 | Voluntary retirement plan
| | ---- | -------------------------



In August 2016 the Company offered a voluntary
retirement plan to 200 employees who met certain criteria. As of December 31, 2016 137 employees were part of plan, with a corresponding
cost of COP$161,796. This plan includes benefits such as monthly income, education and health benefits until the date on which
the employee is granted their retirement pension.





F-72


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 23. | Accrued liabilities and provisions
| | --- | ----------------------------------



The following shows a breakdown of the changes
in the different categories of accrued liabilities and provisions for the years ended December 31, 2016 and 2015:



|                              |  | Asset  retirement 
obligation |           |   | Litigations |  |         | Comuneros provision |  |  | Environmental contingencies and others |   |  | Total |        
|----------------------------- |  | ----------------------------- | --------- | - | ----------- |  | ------- | ------------------- |  |  | -------------------------------------- | - |  | ----- | -------
|Balance at December 31, 2015  |  |                               | 4,452,369 |   |             |  | 99,798  |                     |  |  | 702,486                                |   |  |       | 822,694
|Increase in abandonment costs |  |                               | 404,797   |   |             |  | -       |                     |  |  | -                                      |   |  |       | -      
|Additions (recoveries)        |  |                               | 18,285    |   |             |  | 44,120  |                     |  |  | (702,486                               | ) |  |       | (74,312
|Uses                          |  |                               | (68,460   | ) |             |  | (4,585  | )                   |  |  | -                                      |   |  |       | (31,218
|Financial cost                |  |                               | 317,448   |   |             |  | -       |                     |  |  | -                                      |   |  |       | (173   
|Foreign currency translation  |  |                               | (14,703   | ) |             |  | (355    | )                   |  |  | -                                      |   |  |       | (2,759 
|Transfers (1)                 |  |                               | (45,076   | ) |             |  | 70,954  |                     |  |  | -                                      |   |  |       | (70,954
|Balance at December 31, 2016  |  |                               | 5,064,660 |   |             |  | 209,932 |                     |  |  | -                                      |   |  |       | 643,278
|Current                       |  |                               | 330,057   |   |             |  | 146,767 |                     |  |  | -                                      |   |  |       | 345,130
|Non-current                   |  |                               | 4,734,603 |   |             |  | 63,165  |                     |  |  | -                                      |   |  |       | 298,148
|Total                         |  |                               | 5,064,660 |   |             |  | 209,932 |                     |  |  | -                                      |   |  |       | 643,278



|                             |  | Asset  retirement  obligation |           |   | Litigations |  |          | Comuneros  provision |  |  | Environmental  contingencies  and others |  |  | Total |        
|---------------------------- |  | ----------------------------- | --------- | - | ----------- |  | -------- | -------------------- |  |  | ---------------------------------------- |  |  | ----- | -------
|                             |  |                               |           |   |             |  |          |                      |  |  |                                          |  |  |       |        
|Balance at December 31, 2014 |  |                               | 4,281,107 |   |             |  | 299,551  |                      |  |  | 551,497                                  |  |  |       | 705,916
|Additions (recoveries)       |  |                               | (60,813   | ) |             |  | (188,962 | )                    |  |  | 150,989                                  |  |  |       | 188,701
|Uses                         |  |                               | (84,333   | ) |             |  | (10,791  | )                    |  |  | -                                        |  |  |       | (74,876
|Financial cost               |  |                               | 238,876   |   |             |  | -        |                      |  |  | -                                        |  |  |       | 2,417  
|Foreign currency translation |  |                               | 89,793    |   |             |  | -        |                      |  |  | -                                        |  |  |       | 5,905  
|Transfers (1)                |  |                               | (12,261   | ) |             |  | -        |                      |  |  | -                                        |  |  |       | (5,369 
|Balance at December 31, 2015 |  |                               | 4,452,369 |   |             |  | 99,798   |                      |  |  | 702,486                                  |  |  |       | 822,694
|Current                      |  |                               | 195,858   |   |             |  | 85,364   |                      |  |  | -                                        |  |  |       | 372,275
|Non-current                  |  |                               | 4,256,511 |   |             |  | 14,434   |                      |  |  | 702,486                                  |  |  |       | 450,419
|Total                        |  |                               | 4,452,369 |   |             |  | 99,798   |                      |  |  | 702,486                                  |  |  |       | 822,694



| | (1) | Mainly includes transfers to liabilities associated with assets held for sale.
| | --- | ------------------------------------------------------------------------------



| | 23.1 | Asset retirement obligation
| | ---- | ---------------------------



Asset retirement obligation corresponds to
the Company's future obligation to restore environmental conditions in a manner similar to those existing prior to the start of
projects or activities as described in section 3.5. As long-term obligations this liability is estimated by projecting the expected
future payments and discounting at present value with a rate referenced to the Company's financial obligations, taking into account
the temporality and risks of this obligation. The weighted average discount rate at December 31, 2016 was 7.80% (2015 - 7.28%).





F-73


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 23.2 | Litigations
| | ---- | -----------



The following is a summary
of the main legal proceedings recognized in the statement of financial position, whose loss expectations are highly probable and
could imply an outflow of resources at December 31, 2016 and 2015:



|Claims                                                                                                                                                                                                                                                                                               |  | 2016 |        |  | 2015 | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Provision for payment of premium to update the Legal Stability Contract with the Ministry of Finance and Public Credit, generated by the increased investment in the expansion project.                                                                                                              |  |      | 59,528 |  |      | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Settlement before the Procuraduría General de la Nación with the firms Acciona Infraestructura S.A. y Mantenimiento y Montajes S.A., on August 18, 2016.                                                                                                                                             |  |      | 44,986 |  |      | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Litigation with Schrader Camargo, supplier for Reficar                                                                                                                                                                                                                                               |  |      | 17,003 |  |      | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Damage to third parties caused by hydrocarbon easement in a property near to Refinería de Cartagena.                                                                                                                                                                                                 |  |      | 11,019 |  |      | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Lawsuit by the Sincco consortium for damage related to contractual conditions for the modernization project at the product filling station at the Barrancabermeja industrial complex.                                                                                                                |  |      | 5,347  |  |      | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Damage to third parties caused by a spill of oil owned by Ecopetrol during a car accident in the Raizal rural district in Cundinamarca.                                                                                                                                                              |  |      | 3,500  |  |      | 
|                                                                                                                                                                                                                                                                                                     |  |      |        |  |      | 
|Labor proceeding in 2007 for recalculation of salaries and benefits based on the collective agreement for 232 contractors of Ecopetrol. In the last quarter of 2015 the claimant filed a request for settlement for a new amount of COP$9,338. In 2016 the ruling issued was favorable to Ecopetrol. |  |      | 10     |  |      | 



| | 23.3 | Comuneros - Santiago de las Atalayas provisions
| | ---- | -----------------------------------------------



On November 8, 2016, the Ministry of Mines
and Energy concluded that the amounts being held were not royalties and therefore not due to the Comuneros. The amounts belonged
to Ecopetrol and therefore Ecopetrol recovered the provision it had been recognizing in its financial statements relating to this
dispute.



In accordance with the foregoing, the resources
held by Ecopetrol are their property without any claim or discussion to date regarding ownership title thereof. On November 8,
2016, the amount of the controversy added up to COP$688,664 originated mostly from the valuation and financial yields of the fund
where the resources were deposited. The reversal of this provision was recognized in the net financial results of the period ending
December 31, 2016.



| | 23.4 | Environmental contingencies and others
| | ---- | --------------------------------------



These are mainly contingencies for environmental
incidents and environmental compensation obligations for the use and impact on natural resources within the framework of environmental
authorizations and 1% mandatory investment for the use of water taken directly from natural sources pursuant to that provided for
in Law 99 of 1993, article 43 and Decree 1900 of 2006 in relation with Ecopetrol projects in the region. On December 22, 2016,
the Ministry of the Environment and Sustainable Development issued Decree 2099, whereby it amended the Regulatory Single Decree
of the environment and sustainable development sector, Decree 1076 of 2015 related to their mandatory investment for the use of
water taken directly from natural sources; the Company is currently analyzing the impact derived from its implementation.





F-74


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 23.5 | Legal proceedings not recognized
| | ---- | --------------------------------



The following is a summary of the main contingent
liabilities that have not been recognized in the statement of financial position since according to evaluations performed by Company’s
internal and external advisors their occurrence is not probable at December 31, 2016 and 2015:





|Claims                                                                                                                                                                                                                                                                                 |  | 2016 |         |  | 2015 | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Income tax for taxable year 2010 of Hocol - Rejections related to: a) Special production on productive fixed assets related to unsuccessful exploratory wells. b) Deduction of disbursements related to geology, geophysics and seismic, which must be capitalized and amortized.      |  |      | 197,824 |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Income tax for taxable year 2011 of Hocol - Rejections related to: a) Special production on real productive fixed assets related to unsuccessful exploratory wells. b) Deduction of disbursements related to geology, geophysics and seismic, which must be capitalized and amortized. |  |      | 147,091 |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|On March 14, 2016, a lawsuit was filed for default in settling the contract between Konidol and Ecopetrol, which gave rise to excess costs in the maintenance contract.                                                                                                                |  |      | 62,131  |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Indemnity to third parties for damage caused by hydrocarbon spills during a tanker truck accident on the Villeta - Guaduas road.                                                                                                                                                       |  |      | 43,333  |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Recalculation of legal and extralegal social benefits on cash paid for the benefit of saving incentives.                                                                                                                                                                               |  |      | 16,562  |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Claim to Ecopetrol for legal actions filed against Cepsa as the operator of the Association contract for excess costs in current contracts.                                                                                                                                            |  |      | 10,608  |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Default by Ecopetrol in fulfilling contractual terms of the civil works project with the contractor Edgar Gómez Lucena y Asociados Ltda.                                                                                                                                               |  |      | 10,000  |  |      | 
|                                                                                                                                                                                                                                                                                       |  |      |         |  |      | 
|Transfers of the electric
energy sector for electric power self–generation, pursuant to Law 142 of 1994. In 2016 there was a second instance ruling
that was favorable to Ecopetrol.                                                                                                   |  |      | -       |  |      | 





F-75


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 23.6 | Detail of contingent assets
| | ---- | ---------------------------



Included below, there is a detail of the major
assets contingencies of which occurrence is possible at December 31, 2016 and 2015:



|Claims                                                                                                                                                                                                                                                                                                                                              |  | 2016 |        |  | 2015 | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- | 
|                                                                                                                                                                                                                                                                                                                                                    |  |      |        |  |      | 
|Default in fulfilling the pipe purchase order subscribe to with Daewoo International Corp.                                                                                                                                                                                                                                                          |  |      | 21,232 |  |      | 
|                                                                                                                                                                                                                                                                                                                                                    |  |      |        |  |      | 
|Public lighting tax in the municipality of Barrancabermeja for the years 2003 to 2005.                                                                                                                                                                                                                                                              |  |      | 17,490 |  |      | 
|                                                                                                                                                                                                                                                                                                                                                    |  |      |        |  |      | 
|Nullity of administrative act issued by the DIAN, which ordered a special contribution for public works contracts.                                                                                                                                                                                                                                  |  |      | 13,214 |  |      | 
|                                                                                                                                                                                                                                                                                                                                                    |  |      |        |  |      | 
|Nullity of resolution 113 of 1971 of the Presidency of Colombia, whereby the subsurface property titles were transferred to private parties known with the names of Santiago de las Atalayas and Pueblo Viejo de Cusiana. In 2016, the lawsuit ended in favor of Ecopetrol, making it clear that the sequestered cash is the property of Ecopetrol. |  |      | -      |  |      | 
|                                                                                                                                                                                                                                                                                                                                                    |  |      |        |  |      | 
|Nullity of administrative act that ordered a special contribution for public works contracts. In 2016, there was a first instance ruling that is partially favorable to the claims of Ecopetrol.                                                                                                                                                    |  |      | 2      |  |      | 



Refinería de Cartagena



On March 8, 2016 Reficar presented a request
for Arbitration before the International Chamber of Commerce (ICC) against Chicago Bridge & Iron Company NV, CB&I (UK)
Limited and CBI Colombiana S.A. (collectively, "CB&I") related to the contract for the construction, procurement
and engineering entered into by Reficar and CB&I for the expansion of Refinería de Cartagena in Cartagena, Colombia.
Reficar is the claimant in the arbitration process of the ICC and requests at least US$2 billion from CB&I. On May 25, 2016
CB&I filed a counterclaim of approximately US$213 million. On June 27, 2016, Reficar answered this request denying any responsibility.
The International Chamber of Commerce process is currently in its preliminary stage and a hearing is scheduled for October 2018.





F-76


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 24. | Equity
| | --- | ------



The main components of equity are comprised
as follows:



| | 24.1 | Subscribed and paid-in capital
| | ---- | ------------------------------



Ecopetrol’s authorized capital amounts
to $36,540,000, and is comprised of 60,000,000,000 ordinary shares, 41,116,694,690 of such shares have been subscribed represented
by 11.51% (4,731,905,873 shares) of natural and non-government entities and 88.49% (36,384,788,817 shares) held by Government entities.
The value of the reserve shares amounts to $11,499,933 comprised by 18,883,305,310 shares. At December 31, 2016 and 2015, subscribed
and paid-in capital amounts to $25,040,067. There are no potentially dilutive instruments.



On March 26, 2015, the General Stockholders’
Meeting approved the capitalization of occasional reserves of Ecopetrol S.A. for COP$14,760,893 through the mechanism of increasing
the face value. This capitalization of reserves did not modify materially the number of ordinary shares registered.



| | 24.2 | Additional paid-in capital
| | ---- | --------------------------



It mainly corresponds to: (i) surplus with
respect to its nominal value derived from the sale of shares upon capitalization in 2007, for $4,457,997, (ii) $31,377 the value
generated by the process of placing the shares on the secondary market, arising from the calling of guarantees from debtors in
arrears, according to the provisions of Article 397 of the Code of Commerce, (iii) to the surplus over nominal value arising from
the sale of shares awarded in the second round, which took place in September 2011, in the amount of $2,118,468, and (iv) Additional
paid-in capital receivable for $(143).



24.3	Equity reserves



The balance of equity reserves is comprised
as follows at December 31, 2016 and 2015:



|                              |  | 2016 |           |  | 2015 | 
|----------------------------- |  | ---- | --------- |  | ---- | 
|Legal reserve                 |  |      | 1,269,680 |  |      | 
|Fiscal and statutory reserves |  |      | 289,164   |  |      | 
|Occasional reserves           |  |      | -         |  |      | 
|Total                         |  |      | 1,558,844 |  |      | 



The following shows the balance and a breakdown of the changes in
equity reserves at December 31, 2016 and 2015:



|                                                            |  | 2016 |            |   | 2015 | 
|----------------------------------------------------------- |  | ---- | ---------- | - | ---- | 
|Opening balance                                             |  |      | 5,546,570  |   |      | 
|Appropriation of reserves, net                              |  |      | (117,819   | ) |      | 
|Legal reserve used to offset previous year loss (Note 24.4) |  |      | (3,869,907 | ) |      | 
|Capitalization of occasional reserves                       |  |      | -          |   |      | 
|Closing balance                                             |  |      | 1,558,844  |   |      | 



Legal reserve



The Colombian Code of Commerce establishes
the appropriation obligation of 10% of net income to the legal reserves until the legal reserves are equal to 50% of the subscribed
capital. The legal reserve can be used to offset losses or for distribution in the event of a Company’s liquidation.





F-77


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Occasional reserves



This corresponds to the appropriation of earnings
ordered by the Stockholders’ meeting to carry out new explorations and future investments, as well as unrealized profits
between group companies. On March 26, 2015, the Stockholders’ Meeting approved, after the appropriation of the occasional
reserves of the 2014 period, the capitalization of occasional reserves for $14,760,895 through the mechanism of face value increase.



Tax and mandatory reserves



The Colombian tax regime contemplates the appropriation
of the period’s profits equivalent to 70% when the value of the depreciation deduction for tax purposes exceeds the accounting
depreciation. This reserve may be released to the extent that the depreciations subsequently accounted exceed those annually claimed
for tax purposes or the assets that generated the higher value deducted are sold.



In addition, Decree 2336 of 1995 set out the
obligation to establish a reserve for valuation of investments. The profits generated at the closing of the accounting period as
a consequence of the application of special valuation systems at market prices and that have not been made on behalf of the Company,
will be taken to a reserve.



| | 24.4 | Retained earnings and payment of dividends
| | ---- | ------------------------------------------



The following shows the balance and a breakdown
of the changes in retained earnings at December 31, 2016 and 2015:



|                                                                 |  | 2016 |            |   | 2015 | 
|---------------------------------------------------------------- |  | ---- | ---------- | - | ---- | 
|Opening balance                                                  |  |      | (6,814,432 | ) |      | 
|Profit (loss) attributable to owners of Ecopetrol’s shareholders |  |      | 2,447,881  |   |      | 
|Appropriation of reserves                                        |  |      | 117,819    |   |      | 
|Legal reserve used to offset previous year loss (1)              |  |      | 3,869,907  |   |      | 
|Dividends declared (1)                                           |  |      | -          |   |      | 
|Other movements                                                  |  |      | (23,637    | ) |      | 
|Closing balance                                                  |  |      | (402,462   | ) |      | 



| | (1) | The Company distributes dividends based on its separate financial statements prepared under Colombian
IFRS.
| | --- | -----------------------------------------------------------------------------------------------------------



The Ordinary
General Meeting of Shareholders held on March 31, 2016, approved the proposal for profit distribution, which established that there
would be no distribution for the year 2015, given the net loss occurred in that year; in addition, the shareholders voted to use
the legal reserve to offset this loss, as permitted by the Article 456 of the Colombian Code of Commerce. The amount of losses
offset with the legal reserve once releases and tax and mandatory appropriations amounted to $ 3,869,907. Dividends paid in 2016
attributable to non-controlling shareholders of subsidiaries amounted to COP$1,022,121.



On the results
of 2014 the General Stockholders Meeting approved the distribution of an ordinary dividend per share of COP$133. In June, 2015
the Company paid the minority stockholders COP$629,344 and COP$4,149,000 to majority stockholders. Dividends declared to the majority
shareholder in 2015 payable at December 31, 2015 amounted to COP$690,177 and were fully paid during the first quarter of 2016.
Dividends paid in 2015 attributable to non-controlling shareholders of subsidiaries amounted to COP$715,053.





F-78


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 24.5 | Other comprehensive income attributable to owners of the Company
| | ---- | ----------------------------------------------------------------



The following is a breakdown of other comprehensive
income, net of tax at December 31, 2016 and 2015:



|                                                             |  | 2016 |           |   | 2015 | 
|------------------------------------------------------------ |  | ---- | --------- | - | ---- | 
|Actuarial gain on defined benefit plans                      |  |      | 994,953   |   |      | 
|Gain (loss) on equity instruments measured at fair value (1) |  |      | 7,828     |   |      | 
|Cash flow hedges for future exports                          |  |      | 244,131   |   |      | 
|Hedge of a net investment in a foreign operation             |  |      | (155,359  | ) |      | 
|Cash flow hedge with derivative instruments                  |  |      | (19,042   | ) |      | 
|Others                                                       |  |      | 11,817    |   |      | 
|Foreign currency translation                                 |  |      | 8,138,382 |   |      | 
|                                                             |  |      | 9,222,710 |   |      | 



| | (1) | During 2016 the Company reclassified to the statement of profit or losses COP $68,497 (2015 - COP
$19,405) arising from the realization of the valuations at market value of the accumulated amount in equity of assets available
for sale - Empresa de Energía de Bogotá and Interconexión Eléctrica S.A. (Note 11).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 24.6 | Earnings (loss) per share (basic and diluted)
| | ---- | ---------------------------------------------



|                                                                         |  | 2016 |                |  | 2015 | 
|------------------------------------------------------------------------ |  | ---- | -------------- |  | ---- | 
|Profit (loss) attributable to Ecopetrol’s shareholders                   |  |      | 2,447,881      |  |      | 
|Weighted average number of outstanding shares                            |  |      | 41,116,694,690 |  |      | 
|Net basic earnings (loss) per share (basic and diluted -Colombian pesos) |  |      | 59.5           |  |      | 



There is no potential dilution of shares.





F-79


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 25. | Sales revenue
| | --- | -------------



The following is a breakdown of sales revenue for the years ended
December 31, 2016, 2015 and 2014:



|                                                                                      |  | 2016 |            |  | 2015 |  |            | 2014 | 
|------------------------------------------------------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- | 
|National sales                                                                        |  |      |            |  |      |  |            |      | 
|Mid-distillates                                                                       |  |      | 8,553,503  |  |      |  | 10,215,224 |      | 
|Gasoline                                                                              |  |      | 6,092,739  |  |      |  | 6,128,208  |      | 
|Services                                                                              |  |      | 4,043,284  |  |      |  | 4,435,274  |      | 
|Natural gas                                                                           |  |      | 1,988,336  |  |      |  | 1,845,345  |      | 
|Plastic and rubber                                                                    |  |      | 724,708    |  |      |  | 724,392    |      | 
|L.P.G. and propane                                                                    |  |      | 405,869    |  |      |  | 335,494    |      | 
|Crude                                                                                 |  |      | 553,666    |  |      |  | 491,279    |      | 
|Asphalts                                                                              |  |      | 340,400    |  |      |  | 461,188    |      | 
|Other products                                                                        |  |      | 994,645    |  |      |  | 988,346    |      | 
|                                                                                      |  |      | 23,697,150 |  |      |  | 25,624,750 |      | 
|Recognition of price differential (1)                                                 |  |      | 1,048,022  |  |      |  | 441,871    |      | 
|                                                                                      |  |      | 24,745,172 |  |      |  | 26,066,621 |      | 
|Foreign sales                                                                         |  |      |            |  |      |  |            |      | 
|Crude                                                                                 |  |      | 17,278,579 |  |      |  | 21,181,265 |      | 
|Fuel oil                                                                              |  |      | 2,158,539  |  |      |  | 2,166,469  |      | 
|Trading of crude                                                                      |  |      | -          |  |      |  | 1,309,196  |      | 
|Diesel                                                                                |  |      | 1,594,945  |  |      |  | 81,982     |      | 
|Plastic and rubber                                                                    |  |      | 1,171,342  |  |      |  | 1,096,730  |      | 
|Gasoline and turbo fuel                                                               |  |      | 1,046,758  |  |      |  | 93,125     |      | 
|Cash flow hedge for future exports – Reclassification to profit or loss (Note 31.2.1) |  |      | 33,074     |  |      |  | 7,646      |      | 
|Other products                                                                        |  |      | 457,152    |  |      |  | 344,237    |      | 
|                                                                                      |  |      | 23,740,389 |  |      |  | 26,280,650 |      | 
|Total sales revenue                                                                   |  |      | 48,485,561 |  |      |  | 52,347,271 |      | 



| | (1) | Corresponds to the application of Decree 1880 of September 2014 and Resolution 180522 of 2010,
which defined the procedure for price differentials (value generated by the difference between the parity price and the regulated
price, which can be positive or negative). See section 4.16 – Sales revenue recognition, for more details.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Sales by geographic areas



Operating sales revenue by geographic areas is comprised as follows
for the years ended December 31, 2016, 2015 and 2014:



|                              |  | 2016 |            |  | % |  |      | 2015 |  |  | %          |  |  | 2014 |      |   | % | 
|----------------------------- |  | ---- | ---------- |  | - |  | ---- | ---- |  |  | ---------- |  |  | ---- | ---- | - | - | 
|Colombia                      |  |      | 24,745,172 |  |   |  | 51.0 | %    |  |  | 26,066,621 |  |  |      | 49.8 | % |   | 
|United States of America      |  |      | 11,956,967 |  |   |  | 24.7 | %    |  |  | 11,921,720 |  |  |      | 22.8 | % |   | 
|Asia                          |  |      | 2,717,414  |  |   |  | 5.6  | %    |  |  | 6,123,593  |  |  |      | 11.7 | % |   | 
|Europe                        |  |      | 2,945,951  |  |   |  | 6.1  | %    |  |  | 3,981,926  |  |  |      | 7.6  | % |   | 
|Central America and Caribbean |  |      | 3,551,894  |  |   |  | 7.3  | %    |  |  | 3,366,978  |  |  |      | 6.4  | % |   | 
|South America and others      |  |      | 2,568,163  |  |   |  | 5.3  | %    |  |  | 886,433    |  |  |      | 1.7  | % |   | 
|Total                         |  |      | 48,485,561 |  |   |  | 100  | %    |  |  | 52,347,271 |  |  |      | 100  | % |   | 



F-80


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Concentration of customers



During 2016 Organización Terpel accounted
for 14.4% of total sales in the period (2015 - 14.4% and 2014 - 13.7%). No other customer has more than 10% of total consolidated
sales. There was no exposure that affects the financial position of Ecopetrol if the Company lost the client. The commercial relationship
with this customer is the sale of refine products and transportation service.  Sales to this customer are recognized by the
Refining and Petrochemical and transportation and logistics Segments. Organizacion Terpel, is leader thanks to its network of petrol
stations and industrial sales strategy and in the aviation segment.



| | 26. | Cost of sales (before impairment of non-current assets)
| | --- | -------------------------------------------------------



The following is the detail of cost of sales
per function for the years ended December 31, 2016, 2015 and 2014:



|                                                 |  | 2016 |            |   | 2015 |  |            | 2014 | 
|------------------------------------------------ |  | ---- | ---------- | - | ---- |  | ---------- | ---- | 
|Variable costs                                   |  |      |            |   |      |  |            |      | 
|Imported products (1)                            |  |      | 12,049,477 |   |      |  | 12,935,878 |      | 
|Depreciation, depletion and amortization         |  |      | 5,333,245  |   |      |  | 5,166,455  |      | 
|Hydrocarbon purchases - ANH (2)                  |  |      | 3,178,199  |   |      |  | 3,741,010  |      | 
|Purchases of crude in association and concession |  |      | 1,517,829  |   |      |  | 1,928,938  |      | 
|Hydrocarbons transportation services             |  |      | 783,307    |   |      |  | 1,380,733  |      | 
|Processing materials                             |  |      | 608,535    |   |      |  | 366,454    |      | 
|Electric power                                   |  |      | 618,675    |   |      |  | 424,920    |      | 
|Gas royalties in cash                            |  |      | 478,332    |   |      |  | 481,029    |      | 
|Purchases of other products and gas              |  |      | 519,884    |   |      |  | 703,163    |      | 
|Services contracted in associations              |  |      | 305,326    |   |      |  | 563,032    |      | 
|Others (3)                                       |  |      | (432,694   | ) |      |  | (322,547   | )    | 
|                                                 |  |      | 24,960,115 |   |      |  | 27,369,065 |      | 
|Fixed costs                                      |  |      |            |   |      |  |            |      | 
|Depreciation and amortization                    |  |      | 2,050,739  |   |      |  | 1,433,263  |      | 
|Maintenance                                      |  |      | 1,998,128  |   |      |  | 2,334,130  |      | 
|Labor cost                                       |  |      | 1,571,511  |   |      |  | 1,542,701  |      | 
|Services contracted in associations              |  |      | 1,260,470  |   |      |  | 1,415,422  |      | 
|Services contracted                              |  |      | 1,083,176  |   |      |  | 1,301,094  |      | 
|Taxes and contributions                          |  |      | 391,032    |   |      |  | 461,624    |      | 
|General costs                                    |  |      | 383,842    |   |      |  | 461,994    |      | 
|Materials and operating supplies                 |  |      | 333,258    |   |      |  | 435,238    |      | 
|Hydrocarbons transportation services             |  |      | 157,463    |   |      |  | 147,733    |      | 
|Non-capitalized project costs                    |  |      | 61,689     |   |      |  | 92,252     |      | 
|                                                 |  |      | 9,291,308  |   |      |  | 9,625,451  |      | 
|                                                 |  |      | 34,251,423 |   |      |  | 36,994,516 |      | 



| | (1) | Purchases of diesel and diluent agents to facilitate the transportation of heavy crude oil.
| | --- | -------------------------------------------------------------------------------------------



| | (2) | Corresponds mainly to purchases of crude royalties that Ecopetrol makes from the National Hydrocarbons
Agency (Agencia Nacional de Hidrocarburosor ANH by its acronym in Spanish) derived from national production by both the
Company in direct operation and third parties.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Corresponds to the allocation of inventories because the concepts of cost of sales are presented
at 100%.
| | --- | ---------------------------------------------------------------------------------------------------------





F-81


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 27. | Administration, operation and project expenses
| | --- | ----------------------------------------------



The following is the detail of administration,
operation and project expenses, according to their function for the years ended December 31, 2016, 2015 and 2014:



|                                         |  | 2016 |           |  | 2015 |  |           | 2014 | 
|---------------------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- | 
|Administration expenses                  |  |      |           |  |      |  |           |      | 
|Taxes (1)                                |  |      | 663,889   |  |      |  | 730,841   |      | 
|Labor expenses                           |  |      | 657,051   |  |      |  | 491,748   |      | 
|General expenses and other               |  |      | 556,563   |  |      |  | 393,971   |      | 
|Depreciation and amortization            |  |      | 45,765    |  |      |  | 84,425    |      | 
|                                         |  |      | 1,923,268 |  |      |  | 1,700,985 |      | 
|Operation and project expenses           |  |      |           |  |      |  |           |      | 
|Exploration expenses                     |  |      | 728,590   |  |      |  | 1,584,249 |      | 
|Commissions, fees, freights and services |  |      | 568,513   |  |      |  | 878,259   |      | 
|Corporate projects                       |  |      | 301,854   |  |      |  | 456,159   |      | 
|Taxes                                    |  |      | 286,331   |  |      |  | 348,871   |      | 
|Labor expenses                           |  |      | 278,383   |  |      |  | 309,021   |      | 
|Depreciation and amortization            |  |      | 177,252   |  |      |  | 86,215    |      | 
|Maintenance                              |  |      | 147,197   |  |      |  | 181,630   |      | 
|Fee for regulatory entities              |  |      | 87,325    |  |      |  | 77,909    |      | 
|Various                                  |  |      | 176,242   |  |      |  | 111,955   |      | 
|                                         |  |      | 2,751,687 |  |      |  | 4,034,268 |      | 



| | (1) | It mainly includes the recognition of wealth tax. See Note 10 taxes.
| | --- | --------------------------------------------------------------------



| | 28. | Impairment
                                         of non-current assets
| | --- | -------------------------------------------------------------------------



The detail of non-current assets impairment charges for the years
ended December 31, 2016, 2015 and 2014 is as follows:



|                                                         |  | 2016 |         |  | 2015 |  |           | 2014 | 
|-------------------------------------------------------- |  | ---- | ------- |  | ---- |  | --------- | ---- | 
|Property, plant and equipment and Intangibles (Note 17)  |  |      | 561,738 |  |      |  | 4,144,754 |      | 
|Natural and environmental resources (Note 17)            |  |      | 239,151 |  |      |  | 2,865,077 |      | 
|Investments in associates and joint ventures (Note 14.2) |  |      | 127,858 |  |      |  | 588,144   |      | 
|Goodwill (Note 19)                                       |  |      | -       |  |      |  | 266,900   |      | 
|                                                         |  |      | 928,747 |  |      |  | 7,864,875 |      | 





F-82


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 29. | Other operating income and (expenses), net
| | --- | ------------------------------------------



The following is the detail of other operating
income and (expenses) for the years ended December 31, 2016, 2015 and 2014:



|                                                                     |  | 2016 |          |   | 2015 |  |          | 2014 | 
|-------------------------------------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | ---- | 
|Deferred income BOMT's (1)                                           |  |      | 211,768  |   |      |  | 193,197  |      | 
|Recovery of provisions for litigation                                |  |      | 112,999  |   |      |  | 205,879  |      | 
|Compensation received                                                |  |      | 17,790   |   |      |  | 29,848   |      | 
|Profit (loss) on sale of materials and property, plant and equipment |  |      | (82,200  | ) |      |  | 6,744    |      | 
|Current assets impairment expense (2)                                |  |      | (98,739  | ) |      |  | (2,858   | )    | 
|Gas pipeline availability under BOMT’s contracts (1)                 |  |      | (125,077 | ) |      |  | (124,957 | )    | 
|Other income (expenses), net                                         |  |      | 237,571  |   |      |  | 70,685   |      | 
|                                                                     |  |      | 274,112  |   |      |  | 378,538  |      | 



| | (1) | BOMT:Build, Operate, Maintain and Transfer contracts arising from the sale of Ecogas.
| | --- | -------------------------------------------------------------------------------------

| | (2) | Includes mainly an allowance for doubtful accounts and provisions for inventories.
| | --- | ----------------------------------------------------------------------------------



| | 30. | Financial result, net
| | --- | ---------------------



The following is the detail of financial results net for the years
ended December 31, 2016, 2015 and 2014:



|                                            |  | 2016 |            |   | 2015 |  |            | 2014 | 
|------------------------------------------- |  | ---- | ---------- | - | ---- |  | ---------- | ---- | 
|Financial income                            |  |      |            |   |      |  |            |      | 
|Resources from Santiago de las Atalayas (1) |  |      | 688,664    |   |      |  | -          |      | 
|Yield and interest                          |  |      | 386,001    |   |      |  | 293,507    |      | 
|Valuation of financial assets               |  |      | 136,715    |   |      |  | 164,614    |      | 
|Gain on sale of available-for-sale assets   |  |      | 47,129     |   |      |  | 72,339     |      | 
|Gain on valuation of derivatives            |  |      | 42,865     |   |      |  | -          |      | 
|Dividends                                   |  |      | 10,369     |   |      |  | 91,464     |      | 
|                                            |  |      | 1,311,743  |   |      |  | 621,924    |      | 
|Financial expenses                          |  |      |            |   |      |  |            |      | 
|Interest (2)                                |  |      | (2,765,024 | ) |      |  | (1,768,618 | )    | 
|Financial cost of other liabilities (3)     |  |      | (580,491   | ) |      |  | (627,827   | )    | 
|Other financial expenses                    |  |      | (67,786    | ) |      |  | (45,614    | )    | 
|Expense from financial assets               |  |      | (48,997    | ) |      |  | (167,869   | )    | 
|Loss on valuation of derivatives            |  |      | (1,242     | ) |      |  | (108,486   | )    | 
|                                            |  |      | (3,463,540 | ) |      |  | (2,718,414 | )    | 
|Foreign exchange gain (loss), net (4)       |  |      | 976,430    |   |      |  | (5,566,614 | )    | 
|Financial result, net                       |  |      | (1,175,367 | ) |      |  | (7,663,104 | )    | 



| | (1) | Corresponds to the reversal of a provision
relating to a litigation Santiago de las Atalayas which mostly from the valuation and financial yields generated in the time of
permanence of the cash that was subject to the caution (see Note 23.3 for more information).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Interest was capitalized during the period to natural resources and property, plant and equipment
for COP$341,209 (2015 – COP$744,426 and 2014 – COP$640,698)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Includes financial cost of asset retirement obligation and post-employment benefits liabilities.
| | --- | ------------------------------------------------------------------------------------------------



| | (4) | Foreign exchange gain was COP$17,359,601 in 2016 (2015 - COP$21,813,720 and 2014 – COP$27,380,334)
and foreign exchange loss was COP$16,383,171 in 2016 (2015 – COP$7,360,782 and 2014 – COP$9,630,975).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-83


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 31. | Risk management
| | --- | ---------------



| | 31.1 | Commodity price risk
| | ---- | --------------------



Ecopetrol ́s business depends substantially
on international prices for crude oil and refined products. The prices for these products are volatile and drastic changes couldadversely affect the Company business prospects and results of operations



A large proportion of Ecopetrol ́s sales
revenues come from sales of crude oil, natural gas and refined products. These products are indexed to international reference
prices such as the Brent Index. Consequently, fluctuations in those international indexes have a direct effect on the financial
condition and Company ́s results of operations.



Prices of crude oil, natural gas and refined
products have historically fluctuated as a result of a variety of factors including, among others, competition within the oil and
natural gas industry; changes in international prices of natural gas and refined products; long-term changes in the demand for
crude oil, natural gas and refined products; regulatory changes; changes in the cost of capital; adverse economic conditions; transactions
in derivative financial instruments related to oil and gas and development or availability of alternative fuels.



The Ecopetrol Business Group has a policy approved
by the Board of Directors that allows it to use derivative financial instruments in the organized market over the counter (OTC)
to cover itself from the risk of price fluctuations of crude oil and refined products associated to physical transactions. The
Company has established appropriate processes to handle risk that include constant monitoring of physical and financial market
to identify risks in order to subsequently prepare and execute hedging strategies.



Ecopetrol does not regularly use derivative
instruments to hedge exposures to sales or purchase price risks. The impact of the settlement of the price hedges made during the
years 2016 and 2015 has not been material and were executed as hedging instruments to mitigate risk at different price indices
to the benchmark of the Company's international trade strategy on exports of crude and imports of products.



As of December 31, 2016 and 2015 price hedges
were fully settled with an impact on the result of COP$3,181 and COP$4,141, respectively.



| | 31.2 | Exchange rate risk
| | ---- | ------------------



The group mainly operates in Colombia and makes
sales in the local and international markets. For this reason, it is exposed to the exchange rate risk that arises from various
foreign currency exposures due to commercial transactions and assets and liabilities held in foreign
currency.The impact of fluctuations in exchange rates, especially the Pesos/US$rate, on operations has been material.



The US$/pesos exchange rate has fluctuated
over the last few years. The peso depreciated by an average of 11.2% and 37.3% in 2016 and 2015, respectively; on the other hand,
the closing exchange rates were COP$3,000.71, COP$3,149.47 and COP$2,392.46 as of December 31, 2016, 2015 and 2014, respectively.



When the Colombian peso appreciates in comparison
with the U.S. dollar export sales revenue decrease when translated into COP. However, imported goods, the oil services and interest
on external debt denominated in U.S. dollars, become less expensive. Conversely, when the Colombian peso depreciates in comparison
with the U.S. dollar sales revenues from exports, when translated into COP, increase, and imports and external debt service become
more expensive.



The following table sets out the carrying values
for financial assets and liabilities denominated in foreign currencies at December 31, 2016 and 2015:





|                                    |  | 2016 |         |   | 2015 | 
|----------------------------------- |  | ---- | ------- | - | ---- | 
|US$ Million                         |  |      |         |   |      | 
|Cash and cash equivalents           |  |      | 1,916   |   |      | 
|Other financial assets              |  |      | 1,367   |   |      | 
|Trade receivables and payables, net |  |      | (282    | ) |      | 
|Loans and borrowings                |  |      | (15,172 | ) |      | 
|Net liability position              |  |      | (12,171 | ) |      | 





F-84


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Of the total net liability position US$2,878
million relates to financial assets and liabilities for companies that have the Colombian peso as their functional currency whose
value has affected results for the financial year. Likewise, US$(15,049) million of the net position relates to monetary assets
and liabilities for group companies that have the dollar as their functional currency and non-derivate hedging instruments from
Ecopetrol whose value is recognized in other comprehensive income.



The Company’s risk management strategy
involves the use of non-derivative financial instruments related to cash flow hedges for future exports and hedges of a net investment
in a foreign operation, in order to minimize exposure to currency rate risk, which is detailed below.



| | 31.2.1 | Cash flow hedge for future exports
| | ------ | ----------------------------------



Ecopetrol is exposed to foreign exchange risk
given that a high percentage of its crude export sales revenues are denominated in U.S. dollars. In recent years, the Company has
acquired long-term debt for investment activities in the same currency that projects receiving the cash flow of its export sales
revenues. This situation creates a natural hedge relationship due to the fact that the risks generated by the foreign exchange
difference of export sales revenues to Ecopetrol ́s functional currency (Colombian pesos) are naturally hedged with the foreign
exchange valuation risks of the long-term debt in U.S. dollars, aligned with the company’s risk management strategy.



With the objective of presenting in the financial
statements the effect of the mentioned natural hedge between exports and debt, understanding that the exchange rate risk materializes
when the exports are made, on October 1, 2015, the Board of Directors designated US$5,440 million of Ecopetrol’s debt as
hedge instrument of its future export sales for the period 2015- 2023, in accordance with IAS 39 – Financial instruments:
recognition and measurement.



Hedge accounting records the impact of foreign
exchange gains/losses on the hedging instrument on statement of profit or loss effectively at the time of realization of the hedged
risk. For this to happen, every month when the foreign currency debt is translated to Colombian pesos at the closing exchange rate,
the effects on foreign exchange differences are recognized as part of the other comprehensive income. Once the hedged operation
occurs and sales revenue is recognized, the cumulative exchange differences held within in other comprehensive income is reclassified
to profit or loss statement, impacting operating income and EBITDA.



The following shows the movement of this non-derivative
hedging instrument at December 31, 2016 and 2015:



|(US$ Million)                                     |  | 2016 |       |   | 2015 | 
|------------------------------------------------- |  | ---- | ----- | - | ---- | 
|Hedging instrument at the beginning of the period |  |      | 5,376 |   |      | 
|Reassignment of hedging instruments               |  |      | 870   |   |      | 
|Realized exports                                  |  |      | (870  | ) |      | 
|Capital payments                                  |  |      | (64   | ) |      | 
|Hedging instrument at the end of the period       |  |      | 5,312 |   |      | 





F-85


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The following is the movement in the other
comprehensive income as of December 31:



|                                           |  | 2016 |          |   | 2015 | 
|------------------------------------------ |  | ---- | -------- | - | ---- | 
|Opening balance                            |  |      | 217,291  |   |      | 
|Exchange difference on hedging instruments |  |      | (724,395 | ) |      | 
|Reclassification to profit or loss         |  |      | (33,074  | ) |      | 
|Deferred income tax                        |  |      | 296,047  |   |      | 
|Closing balance                            |  |      | (244,131 | ) |      | 



The expected
reclassification of exchange differences accumulated in other comprehensive income to profit or loss, setting
the exchange rate at COP$3000.71 is as follows:



|Year |  | Peso equivalents |         |  | Income tax |  |          | Net | 
|---- |  | ---------------- | ------- |  | ---------- |  | -------- | --- | 
|2017 |  |                  | 102,454 |  |            |  | (41,838  | )   | 
|2018 |  |                  | 117,447 |  |            |  | (47,960  | )   | 
|2019 |  |                  | 102,307 |  |            |  | (41,778  | )   | 
|2020 |  |                  | 33,981  |  |            |  | (13,876  | )   | 
|2021 |  |                  | 16,847  |  |            |  | (6,880   | )   | 
|2022 |  |                  | 16,847  |  |            |  | (6,880   | )   | 
|2023 |  |                  | 22,750  |  |            |  | (9,290   | )   | 
|     |  |                  | 412,633 |  |            |  | (168,502 | )   | 



| | 31.2.2 | Hedge of a net investment in a foreign operation
| | ------ | ------------------------------------------------



The Board of Directors approved the application
of hedge accounting of net investment from June 8, 2016. The measure seeks to reduce the volatility of non-operating income due
to the exchange difference. The hedge of a net investment applies to a portion of the investments the Company has in foreign currency,
in this case in subsidiaries with the US dollars as their functional currency, using as hedging instrument a portion of the Company’s
debt denominated in US dollars.



Ecopetrol designated as hedged items net investments
in Ocensa, Ecopetrol America Inc., Hocol Petroleum Ltd. (HPL) and Reficar; and as a hedging instrument a portion of its debt denominated
in US dollars in a total amount equivalent to US $5,200 million.



From the implementation to the date of this
report this hedge has been effective.



Gain on exchange difference of these debts
net of taxes recognized in the other comprehensive income at December 31, 2016, was COP$155,359.



| | 31.2.3 | Hedges with derivatives to minimize currency risk
| | ------ | -------------------------------------------------



The Company carries out forwards hedging operations
using the Non-Delivery modality whose purpose is mitigating the volatility of the exchange rate in the cash flow required for operations
of its subsidiary Ocensa, whose functional currency is US dollars. The forward hedging instruments used enable setting the sale
price in US dollars, seeking to counteract the effects from devaluation or revaluation at the time in which Ocensa monetizes the
resources necessary to fulfill its monthly or specific obligations relative to operational cost and tax payments, which are payable
in Colombian pesos.



As of December 31, 2016 there are forwards
contracts with a net short position of US $323 million (2015 - US $387). The impact on the income statement resulting from the
liquidation of these hedges amounting to COP$42,865 of profit (2015- COP$86,914 of loss) and the amount recognized on the other
comprehensive income was COP$33,869 of profit (2015 – COP$60,083 of loss).





F-86


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 31.2.4 | Sensitivity analysis for exchange rate risk
| | ------ | -------------------------------------------



The following table shows the impact that a
variation of 1% and 5% in the exchange rate of the Colombian peso vs the US dollar would have on the assets and liabilities held
in such currency at December 31, 2016:



|Scenario/
Variation
in theexchange rate |    |  | Effect on income before  taxes (+/-) |  |         | Effect on other comprehensive income (+/-) | 
|--------------------------------------- | -- |  | ------------------------------------ |  | ------- | ------------------------------------------ | 
|                                        | 1% |  |                                      |  | 86,363  |                                            | 
|                                        | 5% |  |                                      |  | 431,813 |                                            | 



The sensitivity analysis includes only monetary
assets and monetary liabilities held in foreign currency at the closing date.



| | 31.3 | Credit risk
| | ---- | -----------



Credit risk is the risk that the Company may
suffer losses as a consequence of the breach of contracts for purchase and sale of crude oil, gas, refined and petrochemical products
and transportation services, in addition to the financial institutions in which it keeps investments or the counterparties with
which it has contracted derivative financial instruments.



Credit risk for customers



In performance of the sale process of crude
oil, gas, refined and petrochemical products and transportation services the Company may be exposed to credit risk in the event
that customers fail to comply with their payment obligations. Risk management has designed mechanisms and procedures that have
permitted the Company to minimize the probability of materialization thus safeguarding the Company’s cash flow.



The Company performs a continuous analysis
of the financial strength of its counterparties which implies their classification according to their risk level and financial
supports in the event of a cessation of payments. In addition, a constant monitoring is made of the national and international
market conditions in order to establish early alerts of major changes that may have an impact on the timely payment of obligations
from customers of the Company.



For the bad debts, an individual analysis is
performed that allow to analyze the situation of each customer and thus define the applicable allowance to be established, such
as age of receivables. The group carries out the administrative and legal actions necessary to recover past due accounts receivable
as well as the recognition of interest of customers who do not comply with payment policies.



The business group does not have significant
concentrations of credit risk. The following is the analysis of aging of customer portfolio in arrears but not impaired, at December
31, 2016 and 2015:



|                                |  | 2016 |         |  | 2015 | 
|------------------------------- |  | ---- | ------- |  | ---- | 
|Less than 3-month overdue       |  |      | 179,008 |  |      | 
|Between 3- and 6- month overdue |  |      | 14,275  |  |      | 
|More than 6-month overdue       |  |      | 103,574 |  |      | 
|Total                           |  |      | 296,857 |  |      | 





F-87


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Credit quality of resources in financial assets



Following the promulgation of Decree 1525 of
2008, which provides general rules on investments for public entities, Ecopetrol’s management established guidelines for
our investment portfolios. These guidelines determine that investments in Ecopetrol’s U.S. dollar portfolio are generally
limited to investments of our excess cash in fixed-income securities issued by entities rated A or higher in the long term and
A1/P1/F1 or higher in the short term (international scale) by Standard & Poor’s Ratings Services, Moody’s Investors
Service or Fitch Ratings.



In addition, Ecopetrol may also invest in securities
issued or guaranteed by the U.S. government or Colombian government, without regard to the ratings assigned to such securities.
In Ecopetrol’s peso portfolio, it must invest cash excess in fixed-income securities of issuers rated AAA in the long term,
and F1+/BRC1+ in the short term (local scale) by Fitch Ratings Colombia or BRC Standard & Poor’s. In addition, Ecopetrol
may also invest in securities issued or guaranteed by the Colombian government without rating restrictions.



In order to diversify risk in our peso portfolio,
Ecopetrol does not invest more than 10% of the excess of cash in one specific issuer. In the case of our U.S. dollar portfolio,
it does not invest more than 5% of the excess of cash in one specific issuer in the short term (up to 1 year), or 1% in the long
term. The Company complied with this policy as of December 31,2016 and 2015.



The tables below reflects the credit quality
of issuers and counterparties in transactions involving financial instruments at December 31, 2016 and 2015:



|               |  | Cash and cash 
equivalents |           |  | Other financial assets |  |           | Plan assets | 
|-------------- |  | -------------------------- | --------- |  | ---------------------- |  | --------- | ----------- | 
|Credit quality |  | 2016                       |           |  | 2015                   |  |           | 2016        | 
|AAA            |  |                            | 3,198,394 |  |                        |  | 581,303   |             | 
|F1+            |  |                            | 2,188,471 |  |                        |  | 3,696,327 |             | 
|A1             |  |                            | 1,466,015 |  |                        |  | -         |             | 
|F1             |  |                            | 545,872   |  |                        |  | 1,247,398 |             | 
|F2             |  |                            | 409,717   |  |                        |  | 421,084   |             | 
|BRC 1+         |  |                            | 312,290   |  |                        |  | 120,217   |             | 
|Prime-2        |  |                            | 78,989    |  |                        |  | -         |             | 
|A1+            |  |                            | 73,470    |  |                        |  | 294,931   |             | 
|F3             |  |                            | 37,172    |  |                        |  | -         |             | 
|Prime-3        |  |                            | 32,748    |  |                        |  | 31,862    |             | 
|B              |  |                            | 144       |  |                        |  | -         |             | 
|AA+            |  |                            | -         |  |                        |  | -         |             | 
|AA             |  |                            | -         |  |                        |  | -         |             | 
|AA-            |  |                            | -         |  |                        |  | -         |             | 
|A              |  |                            | -         |  |                        |  | -         |             | 
|BBB+           |  |                            | -         |  |                        |  | -         |             | 
|BBB            |  |                            | -         |  |                        |  | -         |             | 
|BBB-           |  |                            | -         |  |                        |  | -         |             | 
|BB+            |  |                            | -         |  |                        |  | -         |             | 
|BB             |  |                            | -         |  |                        |  | -         |             | 
|CCC            |  |                            | -         |  |                        |  | -         |             | 
|A-             |  |                            | -         |  |                        |  | -         |             | 
|A+             |  |                            | -         |  |                        |  | -         |             | 
|A3             |  |                            | -         |  |                        |  | -         |             | 
|AA3            |  |                            | -         |  |                        |  | -         |             | 
|BA2            |  |                            | -         |  |                        |  | -         |             | 
|BA3            |  |                            | -         |  |                        |  | -         |             | 
|BAA1           |  |                            | -         |  |                        |  | -         |             | 
|BAA2           |  |                            | -         |  |                        |  | -         |             | 
|BAA3           |  |                            | -         |  |                        |  | -         |             | 
|BB-            |  |                            | -         |  |                        |  | -         |             | 
|BRC1           |  |                            | -         |  |                        |  | -         |             | 
|BRC2+          |  |                            | -         |  |                        |  | -         |             | 
|CC             |  |                            | -         |  |                        |  | -         |             | 
|SP1+           |  |                            | -         |  |                        |  | -         |             | 
|VRR1+          |  |                            | -         |  |                        |  | -         |             | 
|Unrated        |  |                            | 67,185    |  |                        |  | 157,328   |             | 
|Total          |  |                            | 8,410,467 |  |                        |  | 6,550,450 |             | 





F-88


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 31.4 | Interest rate risk
| | ---- | ------------------



Interest rate risk arises from Ecopetrol’s
exposure to changes in interest rates because the group has fixed floating-rate instruments in Ecopetrol’s investment portfolio
and issuances of floating rate debt linked to LIBOR, DTF and IPC rates. Thus, interest rate volatility may affect the fair value
and cash flows related to the Company's investments and the financial expense of floating rate loans and financing.



As of December 31, 2016 and 2015 31% of indebtedness
has a floating rate. As a result, if the market interest rate rises financing costs will increase which could have an adverse effect
on the results of operations.



Ecopetrol controls the exposure to interest
rate risk by establishing limits to its effective duration, Value at Risk - VAR and tracking error.



Autonomous equities linked to Ecopetrol’s
pension obligations are also exposed to changes in interest rates, as they include fixed and floating rate instruments that are
marked to market. Colombian regulation for pension funds, as stipulated in the Decree 941 of 2002 and Decree 1861 of 2012, indicates
that they have to follow the same regime as the regular obligatory pension funds in their moderate portfolio.



The following table provides information about
the sensitivity of Company ́s results and other comprehensive income for the next 12 months to variations in interest rate
of 100 basis points:



|                           |  | Financial liabilities |          |   | Financial assets   |  |         | Plan assets                  | 
|-------------------------- |  | --------------------- | -------- | - | ------------------ |  | ------- | ---------------------------- | 
|Variation in interest rate |  | (Financial expenses)  |          |   | (Financial income) |  |         | (Other comprehensive income) | 
|+ 100 basis points         |  |                       | 321,000  |   |                    |  | 40,670  |                              | 
|- 100 basis points         |  |                       | (245,568 | ) |                    |  | (40,670 | )                            | 



Sensitivity analysis of discount rates on pension
plans is shown in the Note 22 – Provisions for employee benefits.



| | 31.5 | Liquidity risk
| | ---- | --------------



The ability to access the capital necessary
to finance the Company ́s investment plans on acceptable terms, can be limited due to deterioration in market conditions.
A new financial crisis could worsen the risk perception in the emerging markets.



Risks related to Colombia’s political
and regional environment could also make it more difficult to access the international capital markets. These conditions, along
with significant write-offs in the financial services sector and the re-pricing of credit risk, can make it difficult to obtain
funding for capital needs on favorable terms. As a result, we may be forced to revise the timing and scope of these projects as
necessary to adapt to existing market and economic conditions, or access the financial markets on terms less favorable; therefore,
negatively affecting the Company ́s results of operations and financial condition.



Liquidity risk is managed in accordance with
the Company ́s policies aimed at ensuring that there are sufficient net funds to meet the Company's financial commitments
within its maturity schedules with no additional costs. The main method for the measurement and monitoring of liquidity is cash
flow forecasting.



The following is a summary of the maturity
of financial liabilities at December 31, 2016. The amounts disclosed in the table are the contractual undiscounted cash flows.
The payments in foreign currency were restated taking a constant exchange rate of $ 3,000.71 Colombian pesos per dollar. Consequently,
these amounts may not reconcile with the amounts disclosed on the consolidated statement of financial position:





|                                 |  | Up to 1 year |            |  | 1-5 years |  |            | 5-10 years |  |  | > 10 years |  |  | Total |           
|-------------------------------- |  | ------------ | ---------- |  | --------- |  | ---------- | ---------- |  |  | ---------- |  |  | ----- | ----------
|Loans (principal and interests)  |  |              | 4,268,060  |  |           |  | 29,965,353 |            |  |  | 25,736,624 |  |  |       | 20,589,796
|Trade and other accounts payable |  |              | 6,854,363  |  |           |  | 23,893     |            |  |  | -          |  |  |       | -         
|Total                            |  |              | 11,122,423 |  |           |  | 29,989,246 |            |  |  | 25,736,624 |  |  |       | 20,589,796





F-89


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 31.6 | Capital management
| | ---- | ------------------



The main
objective of Ecopetrol’s Capital Management is to ensure a financial structure that will optimize the Company’s cost
of capital, maximize the returns to its shareholders and allows access to financial markets at a competitive cost to cover is financing
needs.



The leverage index at the relevant periods
is comprised as follow at December 31, 2016 and 2015:



|                                               |  | 2016 |            |   | 2015 | 
|---------------------------------------------- |  | ---- | ---------- | - | ---- | 
|Loans and borrowings (Note 20)                 |  |      | 52,222,027 |   |      | 
|Cash and cash equivalents (Note 6)             |  |      | (8,410,467 | ) |      | 
|Other financial assets not restricted (Note 9) |  |      | (6,686,895 | ) |      | 
|Net financial debt                             |  |      | 37,124,665 |   |      | 
|Equity (Note 24)                               |  |      | 43,560,501 |   |      | 
|Leverage (1)                                   |  |      | 46.01      | % |      | 



| | (1) | Net financial debt / (Net financial debt + Equity)
| | --- | --------------------------------------------------





F-90


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)






| | 32. | Related parties
| | --- | ---------------



Balances with associated companies and joint ventures as of December
31, 2016 and 2015 are as follows:



|                                 |  | Accounts  receivable |         |  | Other assets |  |       | Accounts  payable |  |  | Loans   | 
|-------------------------------- |  | -------------------- | ------- |  | ------------ |  | ----- | ----------------- |  |  | ------- | 
|Joint ventures                   |  |                      |         |  |              |  |       |                   |  |  |         | 
|Equion Energía Limited           |  |                      | 97,601  |  |              |  | 7,135 |                   |  |  | 89,666  | 
|Ecodiesel Colombia S.A.          |  |                      | 129     |  |              |  | -     |                   |  |  | 20,765  | 
|Offshore International Group (1) |  |                      | 170,121 |  |              |  | -     |                   |  |  | -       | 
|Associates                       |  |                      |         |  |              |  |       |                   |  |  |         | 
|Serviport S.A.                   |  |                      | -       |  |              |  | -     |                   |  |  | 3,989   | 
|Balance at December 31, 2016     |  |                      | 267,851 |  |              |  | 7,135 |                   |  |  | 114,420 | 



|                             |  | Accounts  receivable |        |  | Other assets |  |        | Accounts  payable |  |  | Loans  | 
|---------------------------- |  | -------------------- | ------ |  | ------------ |  | ------ | ----------------- |  |  | ------ | 
|Joint ventures               |  |                      |        |  |              |  |        |                   |  |  |        | 
|Equion Energía Limited       |  |                      | 64,583 |  |              |  | 28,668 |                   |  |  | 62,861 | 
|Ecodiesel Colombia S.A.      |  |                      | -      |  |              |  | -      |                   |  |  | 22,243 | 
|Associates                   |  |                      |        |  |              |  |        |                   |  |  |        | 
|Serviport S.A.               |  |                      | 141    |  |              |  | -      |                   |  |  | 2,359  | 
|Balance at December 31, 2015 |  |                      | 64,724 |  |              |  | 28,668 |                   |  |  | 87,463 | 



(1) The accounts receivable correspond to a
loan granted to Offshore International Group Inc. for US $57 million in April 2016, at an interest rate of 4.99% payable semi-annually
from 2017 and maturing in 2021.



The amounts outstanding are not guaranteed
and will be settled in cash. No expense has been recognized in the current period or in prior periods with respect to uncollectible
or doubtful accounts related to amounts owed by related parties.



The main transactions with related entities
for the years ended December 31, 2016, 2015 and 2014 are detailed as follows:



|                             |  | 2016                |         |  | 2015                  |  |         | 2014                | 
|---------------------------- |  | ------------------- | ------- |  | --------------------- |  | ------- | ------------------- | 
|                             |  | Sales and  services |         |  | Purchases  and others |  |         | Sales and  services | 
|Joint ventures               |  |                     |         |  |                       |  |         |                     | 
|Equion Energía Limited       |  |                     | 491,698 |  |                       |  | 418,618 |                     | 
|Ecodiesel Colombia S.A.      |  |                     | 5,744   |  |                       |  | 265,584 |                     | 
|Offshore International Group |  |                     | 6,285   |  |                       |  | -       |                     | 
|Associates                   |  |                     |         |  |                       |  |         |                     | 
|Serviport S.A.               |  |                     | -       |  |                       |  | 24,572  |                     | 
|Total                        |  |                     | 503,727 |  |                       |  | 708,774 |                     | 



The dividends received by these companies are
listed in Note 14 - Investments in companies.



F-91


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)






| | 32.1 | Key executives management
| | ---- | -------------------------



Based on a resolution
adopted at the annual shareholders’ meeting in 2012 compensation to directors is the equivalent of four to six minimum monthly
wage salaries, which totals approximately COP $3,870,000 pesos for 2015 and COP $4,140,000 pesos for 2016. Fees for attendance
at virtual meetings are set at 50% of the face-to-face meeting fee. The Board of Directors is not subject to any variable remuneration.
The amount canceled in 2016 for fees to Board members amounted to COP$1,253 (2015 - COP$1,238).



The total compensation paid to Directors, executive
officers and senior management during the year ended December 31, 2016 amounted to COP$13,901 (2015 - COP$6,690). The Directors
are not eligible to receive pension and retirement benefits. The total amount set aside as of December 31, 2016 to provide pension
and retirement benefits to our eligible executive officers amounted to COP$4,674 (2015 - COP$10,341).



As of December 31, 2016, the following key
management executives owned less than 1% of the outstanding shares of Ecopetrol, as follows:



|Key management executive     |  | % Shareholding            | 
|---------------------------- |  | ------------------------- | 
|Joaquín Moreno Uribe         |  | <1% of outstanding shares | 
|Mauricio Cárdenas Santamaría |  | <1% of outstanding shares | 
|Héctor Manosalva Rojas       |  | <1% of outstanding shares | 
|Rafael Espinosa Rozo         |  | <1% of outstanding shares | 
|Patricia Stella Zuluaga      |  | <1% of outstanding shares | 
|Juan Carlos Echeverry        |  | <1% of outstanding shares | 



| | 32.2 | Post-employment benefit plans
| | ---- | -----------------------------



The administration and management of resources
for payment of Ecopetrol's pension obligations are managed by pension autonomous equities (PAP, by its acronym in Spanish) which
serve as guarantee and payment source. These funds were established in compliance with the provisions of decree 2153 of 1999 which
authorized as of December 31, 2008 partial commutation of the value corresponding to monthly payments, bonuses and contributions,
transferring said obligations and money supporting them to autonomous patrimonies of a pensional nature.



As of December 31, 2016, the entities managing
these resources were: Fiduciaria Bancolombia, Fiduciaria de Occidente and Consorcio Ecopetrol PAAC (comprised by Fiduciaria La
Previsora, Fiduciaria Bancoldex, Fiduciaria Agraria and Fiduciaria Central). These entities will manage pension resources for a
five-year term (2016 - 2021) and as consideration they receive a remuneration with fixed and variable components which is calculated
on the gross yield of the portfolios and are charged to manage resources.



| | 32.3 | Government related parties
| | ---- | --------------------------



Colombian Government holds control of Ecopetrol
with a stock ownership of 88.49%. The most significant transactions with governmental entities are comprised as follows:



| | a) | Purchase of oil form the National Hydrocarbons Agency - ANH
| | -- | -----------------------------------------------------------



Because of the business nature the Company
has a direct relationship with ANH, an entity which operates under the Ministry of Mines and Energy rules, of which objective is
to manage the oil and gas reserves and resources owned by the Colombian Nation.





F-92


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Ecopetrol purchases the crude oil that the
ANH receives from all producers in Colombia at the prices set in accordance with a jointly established formula, which reflects
the export sale prices (crude oils and products), adjustment to the API gravity quality, sulfur content, transportation rates from
the wellhead to the ports of Coveñas and Tumaco, refining process cost and a commercialization rate. This contract was extended
to June 30, 2018.



At December 2013 the Company commercialized,
on behalf of the ANH, the natural gas received by the latter in kind from the producers. Since January 2014 ANH receives the royalties
in cash for the production of natural gas.



The purchase value of oil and gas from AHN
is detailed in Note 26 - Cost of sales.



Additionally Ecopetrol, like other oil companies,
takes part in "rounds" for the allocation of exploration blocks in Colombia without implying special treatment for Ecopetrol
on account of it being an entity whose majority shareholder is the Ministry of Finance.



| | b) | Price differential
| | -- | ------------------



Regular gasoline and diesel sale prices are
regulated by the National Government. In this case, there are differentials between the volume reported by the Colombian companies
at the time of the sale and the difference between the parity price and the benchmark price, where the parity price is that corresponding
to the daily motor gasoline and diesel prices observed during the month. These differentials may be in favor or against the producers.
The value of this differential is detailed in Note 25 - Sales revenue and 7 – Trade and other receivables, net.



| | c) | National Tax and Customs Direction
| | -- | ----------------------------------



Ecopetrol, just like any other company in Colombia,
has tax obligations that it must comply with in respect of this entity and Ecopetrol does not have any other kind of association
or commercial relationship with it. For more information see Note 10 – Taxes.



| | d) | Comptroller General of the Republic
| | -- | -----------------------------------



Ecopetrol, just like any other state entity
in Colombia, is obliged to comply with the requirements set out by this control entity and make an annual payment to this entity
on account of a maintenance fee. Ecopetrol does not have any other kind of association or commercial relationship with this entity.





F-93


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 33. | Joint operations
| | --- | ----------------



The Company carries out exploration and production
operations through Exploration and Production (E&P) Contracts, Technical Evaluation (TEA) Contracts and Agreements signed with
the National Hydrocarbons Agency or ANH, as well as through Partnership Contracts and other types of contracts. The main joint
operations in 2016 are as follows:



Contracts in which Ecopetrol is not the operator:





|Partners                              |  | Contract              |  | Type        |  | % Participation |  | Geographic area of operations | 
|------------------------------------- |  | --------------------- |  | ----------- |  | --------------- |  | ----------------------------- | 
|                                      |  | Chipirón              |  |             |  | 30-47%          |  |                               | 
|                                      |  | Cosecha               |  |             |  | 30%             |  |                               | 
|Occidental Andina LLC                 |  | Cravo norte           |  | Production  |  | 50%             |  | Colombia                      | 
|                                      |  | Rondón                |  |             |  | 50%             |  |                               | 
|Chevron Petroleum Company             |  | Guajira               |  | Production  |  | 57%             |  | Colombia                      | 
|Mansarovar Energy Colombia Ltd        |  | Nare                  |  | Production  |  | 50%             |  | Colombia                      | 
|Meta Petroleum Corp                   |  | Quifa                 |  | Production  |  | 30%             |  | Colombia                      | 
|Equion Energía Limited                |  | Piedemonte            |  | Production  |  | 50%             |  | Colombia                      | 
|                                      |  | Casanare              |  |             |  | 64%             |  |                               | 
|                                      |  | Corocora              |  |             |  | 56%             |  |                               | 
|Perenco Colombia Limited              |  | Estero                |  | Production  |  | 89%             |  | Colombia                      | 
|                                      |  | Garcero               |  |             |  | 76%             |  |                               | 
|                                      |  | Orocúe                |  |             |  | 63%             |  |                               | 
|                                      |  | Casanare              |  |             |  | 13%             |  |                               | 
|                                      |  | Estero                |  |             |  | 7%              |  |                               | 
|Perenco Colombia Limited              |  | Garcero               |  | Production  |  | 15%             |  | Colombia                      | 
|                                      |  | Orocue                |  |             |  | 23%             |  |                               | 
|                                      |  | Corocora              |  |             |  | 28%             |  |                               | 
|Noble Energy                          |  | Gunflint              |  | Production  |  | 32%             |  |                               | 
|Murphy Oil                            |  | Dalmatian             |  | Production  |  | 30%             |  | EEUU                          | 
|Anadarko                              |  | K2                    |  | Production  |  | 9%              |  |                               | 
|ONGC Videsh Limited Sucursal Colombia |  | Ronda Caribe RC-10    |  | Exploration |  | 50%             |  | Offshore North Caribbean      | 
|Petrobras, Repsol & Statoil           |  | Tayrona               |  | Exploration |  | 30%             |  | Offshore North Caribbean      | 
|Repsol & Statoil                      |  | TEA GUA OFF-1         |  | Exploration |  | 50%             |  | Offshore North Caribbean      | 
|Anadarko                              |  | Fuerte Norte          |  | Exploration |  | 50%             |  | Offshore North Caribbean      | 
|                                      |  | Fuerte Sur            |  |             |  | 50%             |  |                               | 
|Equion Energía Limited                |  | Niscota               |  | Exploration |  | 20%             |  | Colombia                      | 
|                                      |  | PAMA-M-187            |  |             |  |                 |  |                               | 
|                                      |  | PAMA-M-188            |  |             |  |                 |  |                               | 
|Petrobras                             |  | PAMA-M-222            |  | Exploration |  | 30%             |  | Brazil                        | 
|                                      |  | PAMA-M-223            |  |             |  |                 |  |                               | 
|                                      |  | BM-S-63               |  |             |  |                 |  |                               | 
|Vanco                                 |  | BM-S-71               |  | Exploration |  | 30%             |  | Brazil                        | 
|                                      |  | BM-S-72               |  |             |  |                 |  |                               | 
|Shell                                 |  | Deep Rydberg/Aleatico |  | Exploration |  | 29%             |  |                               | 
|Repsol                                |  | Leon                  |  | Exploration |  | 40%             |  |                               | 
|Stone Energy                          |  | Parmer                |  | Exploration |  | 30%             |  | EEUU                          | 
|Murphy Oil                            |  | Sea Eagle             |  | Exploration |  | 50%             |  |                               | 
|Anadarko                              |  | Warrior               |  | Exploration |  | 20%             |  |                               | 





F-94


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Termination of Rubiales and Pirirí
contracts



Since July 1, 2016 Ecopetrol took over the
direct operation of the Rubiales field, which up to that date had been operated by Pacific Rubiales Energy. Upon termination of
the contract Ecopetrol received the assets from said operation and the obligations associated with the BOMT contracts for US$46
million.



Termination
of Tauramena association agreement



On July 3, 2016, the Tauramena Association
Agreement was terminated and for this reason, Ecopetrol began to operate directly the Cusiana field, Casanare. Since its commercialization
in 1993 it was operated first by BP and then by Equion. Cusiana represents for Ecopetrol a 98% participation in the Unified Exploitation
Plan (PEU) of the field, while Equión and Emerald will maintain both 2%.



Contracts in which Ecopetrol is the operator:





|Partners                                                 |  | Contract                   |  | Type                               |  | %
    Participation |  | Geographic
    area of operations | 
|-------------------------------------------------------- |  | -------------------------- |  | ---------------------------------- |  | ------------------- |  | --------------------------------- | 
|                                                         |  | VMM29                      |  |                                    |  |                     |  |                                   | 
|ExxonMobil Exploration
    Colombia                      |  | CR2                        |  | Exploration                        |  | 50%                 |  | Colombia                          | 
|                                                         |  | C62                        |  |                                    |  |                     |  |                                   | 
|Talisman Colombia
    Oil                                |  | CPO9                       |  | Exploration                        |  | 55%                 |  | Colombia                          | 
|ONGC Videsh Limited
    Sucursal Colombia                |  | Ronda Caribe Nueve         |  | Exploration                        |  | 50%                 |  | Colombia                          | 
|CPVEN Sucursal
    Colombia                              |  | VMM32                      |  | Exploration                        |  | 51%                 |  | Colombia                          | 
|Shell Exploración
    and Producción                     |  | CR4                        |  | Exploration                        |  | 50%                 |  | Colombia                          | 
|SK Innovation Co
    Ltd.                                |  | San Jacinto                |  | Exploration                        |  | 70%                 |  | Colombia                          | 
|Repsol Exploración
    Colombia S.A.                     |  | Catleya                    |  | Exploration                        |  | 50%                 |  | Colombia                          | 
|Emerald Energy PLC
    Suc. Colombia                     |  | Cardon                     |  | Exploration                        |  | 50%                 |  | Colombia                          | 
|Maurel & Prom
    Colombia                               |  | CPO 17                     |  | Exploration                        |  | 50%                 |  | Colombia                          | 
|JX
    Nippon                                            |  | FAZ
    M-320 R11          |  | Exploration                        |  | 70%                 |  | Brazil                            | 
|Lewis                                                    |  | Clarinero                  |  | Exploration y Production
    (E&P) |  | 50%                 |  | Colombia                          | 
|Gas Ltd.                                                 |  | CPO9 - Akacias             |  | Production                         |  | 55%                 |  | Colombia                          | 
|Occidental Andina
    LLC                                |  | La Cira Infantas           |  | Production                         |  | 54%                 |  | Colombia                          | 
|                                                         |  | Teca                       |  |                                    |  | 87%                 |  | Colombia                          | 
|Ramshorn International
    Limited                       |  | Guariquies
    I           |  | Production                         |  | 50%                 |  | Colombia                          | 
|Equion Energía
    Limited                               |  | Cusiana                    |  | Production                         |  | 98%                 |  | Colombia                          | 
|                                                         |  | Planta de gas              |  |                                    |  |                     |  |                                   | 
|Perenco
    Oil And Gas                                  |  |                            |  |                                    |  | 18%                 |  |                                   | 
|Cepsa
    Colombia                                       |  | San
    Jacinto y Rio Paez |  | Production                         |  | 18%                 |  | Colombia                          | 
|                                                         |  |                            |  |                                    |  | 18%                 |  |                                   | 
|Equion
    Energía LimitedEmerald EnergyPacific Rubiales |  | OAM                        |  | Production                         |  | 45%                 |  | Colombia                          | 





F-95


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 34. | Segment information
| | --- | -------------------



The description of the business segments can
be seen in note 4.19 – Information by business segment.



| | 34.1 | Statement of profit or loss
| | ---- | ---------------------------



The following segment information is reported
based on the information used by the Board of Directors as the top body to make strategic and operational decisions of these business
segments. The performance of the segments are based primarily on an analysis of income, costs, expenses and results for the period
generated by each segment which are regularly monitored.



The information disclosed in each segment is
presented net of transactions between the Ecopetrol Group companies.



The following presents the consolidated statement
of profit or loss for the years ended December 31, 2016, 2015 and 2014:



F-96


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)








|                                         |  | For the year ended December 31, 2016 |           
|---------------------------------------- |  | ------------------------------------ | ----------
|                                         |  | Exploration and production           |           
|Third-party sales                        |  |                                      | 20,527,332
|Inter-segment sales                      |  |                                      | 7,693,878 
|Total sales revenue                      |  |                                      | 28,221,210
|Fixed cost                               |  |                                      | 6,940,074 
|Variable cost                            |  |                                      | 16,032,574
|Cost of sales                            |  |                                      | 22,972,648
|Gross profit                             |  |                                      | 5,248,562 
|Administration expenses                  |  |                                      | 832,266   
|Operation and projects expenses          |  |                                      | 1,656,960 
|Impairment of non-current assets         |  |                                      | 196,448   
|Other operating income and expenses, net |  |                                      | (349,419  
|Operating income                         |  |                                      | 2,912,307 
|Financial result, net                    |  |                                      |           
|Financial income                         |  |                                      | 983,472   
|Financial expenses                       |  |                                      | (2,017,641
|Foreign exchange gain (loss), net        |  |                                      | 923,573   
|                                         |  |                                      | (110,596  
|Share of profit of associates            |  |                                      | 39,397    
|Income before tax                        |  |                                      | 2,841,108 
|Income tax                               |  |                                      | (1,518,738
|Net income for the period                |  |                                      | 1,322,370 
|Income attributable to:                  |  |                                      |           
|Company’s shareholders                   |  |                                      | 1,322,370 
|Non-controlling interests                |  |                                      | -         
|                                         |  |                                      | 1,322,370 
|Supplementary information                |  |                                      |           
|Depreciation, depletion and amortization |  |                                      | 5,482,827 



F-97


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|                                         |  | For the year ended December 31, 2015 |           
|---------------------------------------- |  | ------------------------------------ | ----------
|                                         |  | Exploration and production           |           
|Third-party sales                        |  |                                      | 25,669,213
|Inter-segment sales                      |  |                                      | 6,063,398 
|Total Revenue                            |  |                                      | 31,732,611
|Fixed costs                              |  |                                      | 7,208,632 
|Variable costs                           |  |                                      | 18,500,240
|Cost of sales                            |  |                                      | 25,708,872
|Gross income                             |  |                                      | 6,023,739 
|Administration expenses                  |  |                                      | 731,626   
|Operation and projects expenses          |  |                                      | 2,969,723 
|Impairment of non-current assets         |  |                                      | 4,504,497 
|Other operating income and expenses, net |  |                                      | (399,954  
|Operating income                         |  |                                      | (1,782,153
|Finance results, net                     |  |                                      |           
|Financial income                         |  |                                      | 536,121   
|Financial expenses                       |  |                                      | (1,774,090
|Foreign exchange gain (loss), net        |  |                                      | (4,798,741
|                                         |  |                                      | (6,036,710
|Share of profit of companies             |  |                                      | (70,407   
|Income before tax                        |  |                                      | (7,889,270
|Income tax                               |  |                                      | 2,037,650 
|Net income (loss)  for the period        |  |                                      | (5,851,620
|Income attributable to:                  |  |                                      |           
|Owners of the Company                    |  |                                      | (5,851,620
|Non-controlling interests                |  |                                      | -         
|                                         |  |                                      | (5,851,620
|Supplementary information                |  |                                      |           
|Depreciation, depletion and amortization |  |                                      | 5,318,587 



F-98


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|                                         |  | For the year ended December 31, 2014 |           
|---------------------------------------- |  | ------------------------------------ | ----------
|                                         |  | Exploration and production           |           
|Third-party sales                        |  |                                      | 35,903,045
|Inter-segment sales                      |  |                                      | 9,252,146 
|Total Revenue                            |  |                                      | 45,155,191
|Fixed costs                              |  |                                      | 6,788,549 
|Variable costs                           |  |                                      | 21,139,234
|Cost of sales                            |  |                                      | 27,927,783
|Gross income                             |  |                                      | 17,227,408
|Administration expenses                  |  |                                      | 335,432   
|Operation and projects expenses          |  |                                      | 4,288,108 
|Impairment of non-current assets         |  |                                      | 965,607   
|Other operating income and expenses, net |  |                                      | (285,821  
|Operating income                         |  |                                      | 11,924,082
|Finance results, net                     |  |                                      |           
|Financial income                         |  |                                      | 251,902   
|Financial expenses                       |  |                                      | (837,510  
|Foreign exchange gain (loss), net        |  |                                      | (2,243,938
|                                         |  |                                      | (2,829,546
|Share of profit of companies             |  |                                      | 154,816   
|Income before tax                        |  |                                      | 9,249,352 
|Income tax                               |  |                                      | (4,159,511
|Net income for the period                |  |                                      | 5,089,841 
|Income attributable to:                  |  |                                      |           
|Owners of the Company                    |  |                                      | 5,089,841 
|Non-controlling interests                |  |                                      | -         
|                                         |  |                                      | 5,089,841 
|Supplementary information                |  |                                      |           
|Depreciation, depletion and amortization |  |                                      | 5,172,743 



F-99


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 34.2 | Information by segments of sales by product and capital expenditures
| | ---- | --------------------------------------------------------------------



| | 34.2.1 | Sales by product
| | ------ | ----------------



The sales by product of each of the segments
are detailed below for the years ended December 31, 2016, 2015 and 2014:



|                                                       |  | For the year ended December 31, 2016 |           
|------------------------------------------------------ |  | ------------------------------------ | ----------
|                                                       |  | Exploration and production           |           
|                                                       |  |                                      |           
|Local sales                                            |  |                                      |           
|Med-distillates                                        |  |                                      | -         
|Gasoline and turbo fuel                                |  |                                      | -         
|Services                                               |  |                                      | 73,247    
|Natural gas                                            |  |                                      | 2,383,323 
|Plastic and rubber                                     |  |                                      | -         
|L.P.G. and propane                                     |  |                                      | 90,783    
|Crude oil                                              |  |                                      | 5,284,554 
|Asphalts                                               |  |                                      | 31,277    
|Aromatics                                              |  |                                      | -         
|Oil fuel                                               |  |                                      | 1,382     
|Other products                                         |  |                                      | 424,952   
|                                                       |  |                                      | 8,289,518 
|Recognition of price differential                      |  |                                      | -         
|                                                       |  |                                      | 8,289,518 
|                                                       |  |                                      |           
|Foreign sales                                          |  |                                      |           
|Crude                                                  |  |                                      | 19,516,197
|Oil fuel                                               |  |                                      | -         
|Med-distillates                                        |  |                                      |           
|Plastic and rubber                                     |  |                                      | -         
|Gasoline and turbo fuel                                |  |                                      |           
|Natural gas                                            |  |                                      | 350,685   
|L.P.G. and propane                                     |  |                                      | 6,342     
|Cash flow hedging – Reclassification to profit or loss |  |                                      | 33,074    
|Other products                                         |  |                                      | 25,395    
|                                                       |  |                                      | 19,931,693
|Total sales revenue                                    |  |                                      | 28,221,211



F-100


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|                                                           |  | Exploration and production |            |  | Refining and petrochemicals |  |            | Transportation and logistics |  |  | Eliminations |  |  | Total |            
|---------------------------------------------------------- |  | -------------------------- | ---------- |  | --------------------------- |  | ---------- | ---------------------------- |  |  | ------------ |  |  | ----- | -----------
|Local sales                                                |  |                            |            |  |                             |  |            |                              |  |  |              |  |  |       |            
|Med-distillates                                            |  |                            | 25,782     |  |                             |  | 10,206,599 |                              |  |  | -            |  |  |       | (17,157    
|Gasoline                                                   |  |                            | -          |  |                             |  | 6,464,661  |                              |  |  | -            |  |  |       | (336,453   
|Services                                                   |  |                            | 118,812    |  |                             |  | 198,369    |                              |  |  | 10,822,078   |  |  |       | (6,703,985 
|Natural gas                                                |  |                            | 2,198,284  |  |                             |  | -          |                              |  |  | -            |  |  |       | (352,939   
|Crude oil                                                  |  |                            | 5,847,368  |  |                             |  | -          |                              |  |  | -            |  |  |       | (5,356,089 
|Diesel and asphalts                                        |  |                            | 49,583     |  |                             |  | 411,605    |                              |  |  | -            |  |  |       | -          
|Plastic and rubber                                         |  |                            | -          |  |                             |  | 724,392    |                              |  |  | -            |  |  |       | -          
|L.P.G. and propane                                         |  |                            | 154,201    |  |                             |  | 190,346    |                              |  |  | -            |  |  |       | (9,053     
|Other products                                             |  |                            | 262,906    |  |                             |  | 1,070,725  |                              |  |  | 22,472       |  |  |       | (367,757   
|                                                           |  |                            | 8,656,936  |  |                             |  | 19,266,697 |                              |  |  | 10,844,550   |  |  |       | (13,143,433
|Recognition of price  differential                         |  |                            | -          |  |                             |  | 441,871    |                              |  |  | -            |  |  |       | -          
|                                                           |  |                            | 8,656,936  |  |                             |  | 19,708,568 |                              |  |  | 10,844,550   |  |  |       | (13,143,433
|Foreign sales                                              |  |                            |            |  |                             |  |            |                              |  |  |              |  |  |       |            
|Crude                                                      |  |                            | 21,495,762 |  |                             |  | -          |                              |  |  | -            |  |  |       | (314,497   
|Fuel oil                                                   |  |                            | -          |  |                             |  | 2,166,469  |                              |  |  | -            |  |  |       | -          
|Trading of crude                                           |  |                            | 1,309,196  |  |                             |  |            |                              |  |  |              |  |  |       |            
|Natural gas                                                |  |                            | 233,500    |  |                             |  | -          |                              |  |  | -            |  |  |       | (50,550    
|Gasoline and turbo fuel                                    |  |                            | 27,756     |  |                             |  | 65,369     |                              |  |  | -            |  |  |       | -          
|Diesel                                                     |  |                            | -          |  |                             |  | 81,982     |                              |  |  | -            |  |  |       | -          
|Plastic and rubber                                         |  |                            | -          |  |                             |  | 1,096,730  |                              |  |  | -            |  |  |       | -          
|Cash flow hedging – Reclassification to profit or
    loss |  |                            | 7,646      |  |                             |  | -          |                              |  |  | -            |  |  |       | -          
|Other products and services                                |  |                            | 1,815      |  |                             |  | 126,558    |                              |  |  | -            |  |  |       | 32,914     
|                                                           |  |                            | 23,075,675 |  |                             |  | 3,537,108  |                              |  |  | -            |  |  |       | (332,133   
|Total revenue                                              |  |                            | 31,732,611 |  |                             |  | 23,245,676 |                              |  |  | 10,844,550   |  |  |       | (13,475,566



|                                  |  | Exploration and production |            |  | Refining and petrochemicals |  |            | Transportation and logistics |  |  | Eliminations |  |  | Total |            
|--------------------------------- |  | -------------------------- | ---------- |  | --------------------------- |  | ---------- | ---------------------------- |  |  | ------------ |  |  | ----- | -----------
|Local sales                       |  |                            |            |  |                             |  |            |                              |  |  |              |  |  |       |            
|Med-distillates                   |  |                            | 1,241      |  |                             |  | 11,982,214 |                              |  |  | -            |  |  |       | -          
|Gasoline                          |  |                            | -          |  |                             |  | 6,979,197  |                              |  |  | -            |  |  |       | (584,775   
|Services                          |  |                            | 245,798    |  |                             |  | 152,267    |                              |  |  | 8,324,753    |  |  |       | (4,944,745 
|Natural gas                       |  |                            | 1,580,941  |  |                             |  | -          |                              |  |  | -            |  |  |       | (234,316   
|Crude oil                         |  |                            | 9,487,864  |  |                             |  | -          |                              |  |  | -            |  |  |       | (8,274,146 
|Diesel and asphalts               |  |                            | 46,336     |  |                             |  | 412,736    |                              |  |  | -            |  |  |       | -          
|Plastic and rubber                |  |                            | -          |  |                             |  | 667,563    |                              |  |  | -            |  |  |       | -          
|L.P.G. and propane                |  |                            | 181,806    |  |                             |  | 248,578    |                              |  |  | -            |  |  |       | (3,934     
|Other products                    |  |                            | 102,696    |  |                             |  | 812,510    |                              |  |  | 19,181       |  |  |       | 66,934     
|                                  |  |                            | 11,646,682 |  |                             |  | 21,255,065 |                              |  |  | 8,343,934    |  |  |       | (13,974,982
|Recognition of price differential |  |                            |            |  |                             |  | 485,409    |                              |  |  | -            |  |  |       | -          
|                                  |  |                            | 11,646,682 |  |                             |  | 21,740,474 |                              |  |  | 8,343,934    |  |  |       | (13,974,982
|Foreign sales                     |  |                            |            |  |                             |  |            |                              |  |  |              |  |  |       |            
|Crude                             |  |                            | 31,524,915 |  |                             |  | -          |                              |  |  | -            |  |  |       | (689,405   
|Fuel oil                          |  |                            | -          |  |                             |  | 3,921,703  |                              |  |  | -            |  |  |       | -          
|Trading of crude                  |  |                            | 1,486,060  |  |                             |  |            |                              |  |  |              |  |  |       |            
|Natural gas                       |  |                            | 439,076    |  |                             |  | -          |                              |  |  | -            |  |  |       | (15,615    
|Gasoline and turbo fuel           |  |                            | -          |  |                             |  | 127,090    |                              |  |  | -            |  |  |       | -          
|Diesel                            |  |                            | -          |  |                             |  | 179,738    |                              |  |  | -            |  |  |       | -          
|Plastic and rubber                |  |                            | -          |  |                             |  | 975,282    |                              |  |  | -            |  |  |       | -          
|Other products and services       |  |                            | 58,458     |  |                             |  | 228,013    |                              |  |  | -            |  |  |       | (19,535    
|                                  |  |                            | 33,508,509 |  |                             |  | 5,431,826  |                              |  |  | -            |  |  |       | (724,555   
|Total revenue                     |  |                            | 45,155,191 |  |                             |  | 27,172,300 |                              |  |  | 8,343,934    |  |  |       | (14,699,537



F-101


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 34.2.2 | Capital expenditures by segment
| | ------ | -------------------------------



The following are the amounts of investments
made by each segment for the years ended December 31, 2016, 2015 and 2014:







|2016                                |  | Exploration and production |           |  | Refining and petrochemicals |  |           | Transportation and logistics |  |  | Total     | 
|----------------------------------- |  | -------------------------- | --------- |  | --------------------------- |  | --------- | ---------------------------- |  |  | --------- | 
|Property, plant and equipment       |  |                            | 1,208,464 |  |                             |  | 1,099,850 |                              |  |  | 1,338,615 | 
|Natural and environmental resources |  |                            | 2,121,295 |  |                             |  | -         |                              |  |  | -         | 
|Intangibles                         |  |                            | 53,774    |  |                             |  | 10,274    |                              |  |  | 5,205     | 
|                                    |  |                            | 3,383,533 |  |                             |  | 1,110,124 |                              |  |  | 1,343,820 | 



|2015                                            |  | Exploration and production |           |  | Refining and petrochemicals |  |           | Transportation and logistics |  |  | Total     | 
|----------------------------------------------- |  | -------------------------- | --------- |  | --------------------------- |  | --------- | ---------------------------- |  |  | --------- | 
|Property, plant and equipment                   |  |                            | 2,460,975 |  |                             |  | 3,590,279 |                              |  |  | 2,497,679 | 
|Natural and environmental resources ( Note 2.8) |  |                            | 6,856,761 |  |                             |  | -         |                              |  |  | -         | 
|Intangibles                                     |  |                            | 69,126    |  |                             |  | 18,494    |                              |  |  | 24,635    | 
|                                                |  |                            | 9,386,862 |  |                             |  | 3,608,773 |                              |  |  | 2,522,314 | 



|2014                                           |  | Exploration and production |            |  | Refining and petrochemicals |  |           | Transportation and logistics |  |  | Total     | 
|---------------------------------------------- |  | -------------------------- | ---------- |  | --------------------------- |  | --------- | ---------------------------- |  |  | --------- | 
|Property, plant and equipment                  |  |                            | 3,556,536  |  |                             |  | 3,730,289 |                              |  |  | 1,636,743 | 
|Natural and environmental resources (Note 2.8) |  |                            | 6,601,680  |  |                             |  | -         |                              |  |  | -         | 
|Intangibles                                    |  |                            | 26,610     |  |                             |  | 10,636    |                              |  |  | 74,772    | 
|                                               |  |                            | 10,184,826 |  |                             |  | 3,740,925 |                              |  |  | 1,711,515 | 



F-102


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 35. | Contractual obligations
| | --- | -----------------------



Ecopetrol business group enter into various
commitments and contractual obligations that may require future cash payments. The details of the commitments and contractual obligations
can be found in section 4.8 Financial Review - Financial Indebtedness and Other Contractual Obligations.



| | 36. | Subsequent events
| | --- | -----------------



| | 1. | On February 15, 2017 the fourth auction was carried out corresponding to the Second Stage of the Alienation and Awarding Program of 28,465,035 shares of Empresa de Energía de Bogotá S.A. E.S.P, the auction was declared deserted.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | The Ordinary General Shareholders’ Meeting, held on March 31, 2017, approved the profit distribution project, which establishes that a common dividend per share of twenty-three pesos (COL $ 23) will be distributed. The shareholders’ dividend was paid in a single installment on April 28, 2017.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | On April 28, 2017 Ecopetrol transferred the fields Santana and Nancy-Maxine-Burdine to Gran Tierra for a total amount of US$30.41 million. On May 26, 2017 the company IHSA paid US$21.74 million to acquire the fields Rio de Oro and Puerto Barco, Rio Zulia and Valdivia Almagro, which will be transferred on May 30 and 31, 2017. All of these fields were awarded through an auction offered in November 2016.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | As part of the investigations carried out by various control entities on the Cartagena refinery modernization and expansion project, the Prosecutor’s Office (Fiscalia General de la Nación) is conducting a confidential investigation. In connection therewith, on April 27, 2017, through a press release informed its intention to pursue charges including document forgery, illegal interest in the execution of agreement, misappropriation of public funds and unjust enrichment.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Prosecutor’s Office
has not yet made public the factual basis for such charges, and accordingly we are not in a position to predict the outcome of
the Prosecutor’s Office investigation or the disposition of any charges that the Prosecutor’s Office may bring. Given
the early stage of the investigation, it is not possible to assess the probability of any other consequences that might impact
the financial statements, such as additional provisions, fines, legal costs, disallowance of tax deductions that may impact the
recognition of tax reserves or the carrying amount of deferred tax assets or any other impact that is not known at the present
time.





F-103


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | 37. | Supplemental information on oil and gas producing activities (unaudited)
| | --- | ------------------------------------------------------------------------



The information in this note is referred
to as “unaudited” as a means of clarifying that it is not covered by the audit opinion of the independent registered
public accounting firm that has audited and reported on the “Consolidated Financial Statements”.



In accordance with the requirements of
the United States Securities and Exchange Commission (SEC), Release 33-8879, Accounting Standards Codification 932 and the ASU-
2010-03 “Oil and Gas reserve Estimation and Disclosures” rule, this section provides supplemental information on oil
and gas exploration and producing activities of the Company. The information included in sections a) to c) provides historical
cost information pertaining to costs incurred in exploration, property acquisitions and development, capitalized costs and results
of operations. The information included in sections d) and e) presents information on Ecopetrol’s estimated net proved reserve
quantities, standardized measure of estimated discounted future net cash flows related to proved reserves and changes in estimated
discounted future net cash flows.



The following information corresponds to
Ecopetrol’s oil and gas producing activities as of December 31 2016, 2015 and 2014, and includes information related to the
Company’s consolidated subsidiaries as well as its investments the joint ventures Equion Energía Limited and Offshore
International Group. The oil and gas exploration and production activities of these two joint ventures are immaterial, as such
the corresponding information has not been disclosed separately.



Under the SEC final rule optional disclosure
of possible and probable reserves is allowed but, the Company opted not to do so. Ecopetrol estimated its reserves without considering
non-traditional resources.



| | (a) | Capitalized costs relating to oil and gas exploration and production activities
| | --- | -------------------------------------------------------------------------------



|                                                                |  | December 31, |            
|--------------------------------------------------------------- |  | ------------ | -----------
|                                                                |  | 2016         |            
|Natural and environmental properties                            |  |              | 47,097,475 
|Wells, equipment and facilities – property, plant and equipment |  |              | 29,931,039 
|Construction in progress                                        |  |              | 6,855,832  
|Accumulated depreciation, depletion and amortization            |  |              | (49,714,944
|Net capitalized costs                                           |  |              | 34,169,402 



It includes information of the exploration
and production segment subsidiaries.



In accordance with IAS 37, natural and
environmental properties include asset retirement obligations amounting COP$766,909, COP$580,575 and COP$1,061,392 during 2016,
2015 and 2014, respectively.



| | (b) | Costs incurred in oil and gas exploration and developed activities
| | --- | ------------------------------------------------------------------



Costs incurred are summarized below and
include both amounts expensed and capitalized in the corresponding period.



|                                       |  | Year ended December 31 |          
|-------------------------------------- |  | ---------------------- | ---------
|                                       |  | 2016                   |          
|Acquisition of Proved properties       |  |                        | -        
|Acquisition of unproved properties (1) |  |                        | -        
|Exploration costs                      |  |                        | 852,097  
|Development costs                      |  |                        | 2,190,426
|Total costs incurred                   |  |                        | 3,042,523





| | (1) | It relates to drilling for the Leon 2 exploratory project, operated by Repsol as well as acquisition
of the Lease sales 235 and 246 (unproven lands). For 2014, it corresponds to drilling for the Ridberg/Aleatico and Leon 1 exploratory
projects, operated by Shell and Repsol, respectively, as well as acquisition of the Lease Sale 231 (unproved lands).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-104


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | (c) | Results of operations for oil and gas exploration and production activities
| | --- | ---------------------------------------------------------------------------



The Company’s results of operations
from oil and gas exploration and production activities for the years ended December 31, 2016, 2015 and 2014 are as follows:



|                                               |  | 2016 |            |   | 2015 |  |            | 2014 | 
|---------------------------------------------- |  | ---- | ---------- | - | ---- |  | ---------- | ---- | 
|Net revenues                                   |  |      |            |   |      |  |            |      | 
|Sales                                          |  |      | 21,322,662 |   |      |  | 26,039,708 |      | 
|Transfers                                      |  |      | 7,734,195  |   |      |  | 5,692,902  |      | 
|Total                                          |  |      | 29,056,857 |   |      |  | 31,732,610 |      | 
|                                               |  |      |            |   |      |  |            |      | 
|Production cost (1)                            |  |      | 5,785,950  |   |      |  | 6,006,563  |      | 
|Depreciation, depletion and amortization (2)   |  |      | 6,123,914  |   |      |  | 9,887,331  |      | 
|Other production costs (3)                     |  |      | 12,370,540 |   |      |  | 14,457,836 |      | 
|Exploration expenses (4)                       |  |      | 730,393    |   |      |  | 1,586,940  |      | 
|Other expenses (5)                             |  |      | 1,488,143  |   |      |  | 2,711,274  |      | 
|Total                                          |  |      | 26,498,940 |   |      |  | 34,649,944 |      | 
|Income before income tax                       |  |      | 2,557,918  |   |      |  | (2,917,333 | )    | 
|Income tax expenses                            |  |      | (1,367,357 | ) |      |  | (371,376   | )    | 
|Results of operations for producing activities |  |      | 1,190,561  |   |      |  | (3,288,709 | )    | 



| | (1) | Production costs are lifting costs incurred to operate and maintain productive wells and related
equipment and facilities including costs such as operating labor, materials, supplies, and fuel consumed in operations and the
costs of operating natural gas liquids plants. In addition, it includes accretion expense related to the asset retirement obligations
that were recognized during 2016, 2015 and 2014 amounting approximately COP$305,653, COP$206,570 and COP$184,648, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | In accordance with IAS 37 the expense related to asset retirement obligations that were recognized
during 2016, 2015 and 2014 in depreciation, depletion and amortization, amounted approximately to COP$188,370, COP$294,849 and
COP$160,106, respectively.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Corresponds to transportation costs and naphtha that are not part of the Company ́s lifting
cost.
| | --- | ------------------------------------------------------------------------------------------------



| | (4) | Exploration expenses include the costs of geological and geophysical activities as well as the
non-productive exploratory wells.
| | --- | --------------------------------------------------------------------------------------------------------------------------------



| | (5) | Corresponds to administration and marketing expenses.
| | --- | -----------------------------------------------------



During 2016, 2015 and 2014 , the Company
transferred approximately 17.7%, 17.9% and 18.8%, respectively, of its crude oil and gas production; (percentages based on the
value sales in Colombian pesos) to intercompany business units. Based on volume those transfers were 46.1%, 37.4% and 38.8%, respectively
(including Reficar).



The intercompany transfers were performed
at market prices.



F-105


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




| | (d) | Reserve information
| | --- | -------------------



Ecopetrol follows international standards
for estimating, classifying and reporting reserves framed under SEC definitions. The process is led by the Reserves Department
which submits the report to the Board of Directors for approval.



The reserves were audited at a level of
99% by 2 specialized auditing companies: DeGolyer and MacNaughton and Ryder Scott Company. According to these certifications the
reserves report complies with the content and guidelines set forth in Rule 4-10 of Regulation S-X issued by the United States SEC.



The following information relates to the
net proven reserves owned by the Ecopetrol Business Group in 2016, 2015 and 2014, and corresponds to the official reserves statements
prepared by the Company:



|                                    |  | 2016   |       |   | 2015  |  |       | 2014  | 
|----------------------------------- |  | ------ | ----- | - | ----- |  | ----- | ----- | 
|                                    |  | Oil    |       |   | Gas   |  |       | Total | 
|                                    |  | (Mbls) |       |   | (Gpc) |  |       | (Mbe) | 
|Proved reserves:                    |  |        |       |   |       |  |       |       | 
|Opening balance                     |  |        | 1,239 |   |       |  | 3,479 |       | 
|Revisions of previous estimates (1) |  |        | (50   | ) |       |  | (23   | )     | 
|Improved recovery                   |  |        | 11    |   |       |  | 1     |       | 
|Extensions and discoveries          |  |        | 22    |   |       |  | 25    |       | 
|Production                          |  |        | (189  | ) |       |  | (264  | )     | 
|Closing balance                     |  |        | 1,033 |   |       |  | 3,218 |       | 
|                                    |  |        |       |   |       |  |       |       | 
|Proved developed reserves:          |  |        |       |   |       |  |       |       | 
|Opening balance                     |  |        | 913   |   |       |  | 3,176 |       | 
|Closing balance                     |  |        | 779   |   |       |  | 3,131 |       | 
|                                    |  |        |       |   |       |  |       |       | 
|Proved undeveloped reserves:        |  |        |       |   |       |  |       |       | 
|Opening balance                     |  |        | 326   |   |       |  | 303   |       | 
|Closing balance                     |  |        | 254   |   |       |  | 87    |       | 



| | (1) | It represents changes in previous proved reserves, upward or downward, resulting from new information
(except for an increase in proved area), usually obtained from development drilling and production history or result from changes
in economic factors.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The section Overview Business –
Exploration and Production – Reserves contains additional information of the process of estimating reserves and main
explanations about the changes in Proved Reserves.



| | (e) | Standardized measure of discounted future net cash flows relating to proved oil and gas quantities
and changes therein
| | --- | ----------------------------------------------------------------------------------------------------------------------



The standardized measure of discounted
future net cash flows related to the above proved crude oil and natural gas reserves is calculated in accordance with the requirements
of ASU 2010-03. Estimated future cash inflows from production under SEC requirements are computed by applying unweighted arithmetic
average of the first-day-of-the-month for oil and gas price to year-end quantities of estimated net proved reserves.



|                                                         |  | 2016 |             |   | 2015 |  |             | 2014 | 
|-------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- | 
|Future cash inflows                                      |  |      | 140,458,230 |   |      |  | 176,865,586 |      | 
|Future costs                                             |  |      |             |   |      |  |             |      | 
|Production                                               |  |      | (60,705,779 | ) |      |  | (76,363,169 | )    | 
|Development                                              |  |      | (12,005,835 | ) |      |  | (16,498,118 | )    | 
|Income tax expenses                                      |  |      | (15,400,000 | ) |      |  | (30,052,830 | )    | 
|Future net cash flow                                     |  |      | 52,346,616  |   |      |  | 53,951,469  |      | 
|10% annual discount for estimated timing of cash flows   |  |      | (18,221,004 | ) |      |  | (19,117,422 | )    | 
|Standardized measure of discounted future net cash flows |  |      | 34,125,612  |   |      |  | 34,834,047  |      | 



F-106


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




The following are the principal sources
of change in the standardized measure of discounted net cash flows in 2016, 2015 and 2014:



|                                                                                                      |  | 2016 |             |   | 2015 |  |             | 2014 | 
|----------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- | 
|                                                                                                      |  |      |             |   |      |  |             |      | 
|Net change in sales and transfer prices and in production (lifting) cost related to future production |  |      | 3,603,876   |   |      |  | (50,472,025 | )    | 
|Changes in estimated future development costs                                                         |  |      | (4,767,340  | ) |      |  | 592,529     |      | 
|Sales and transfer of oil and gas produced during the period                                          |  |      | (23,270,907 | ) |      |  | (25,726,047 | )    | 
|Net change due to extensions and discoveries                                                          |  |      | 154,352     |   |      |  | (93,190     | )    | 
|Net change due to purchase and (sales) of minerals in place                                           |  |      | (83,450     | ) |      |  | -           |      | 
|Net change due to revisions in quantity estimates                                                     |  |      | (2,570,103  | ) |      |  | (985,217    | )    | 
|Previously estimated development costs incurred during the period                                     |  |      | 5,042,697   |   |      |  | 10,769,369  |      | 
|Accretion of discount                                                                                 |  |      | 5,423,781   |   |      |  | 11,321,221  |      | 
|Timing and other                                                                                      |  |      | 6,394,404   |   |      |  | (4,381,037  | )    | 
|Net change in income taxes                                                                            |  |      | 9,364,255   |   |      |  | 18,775,304  |      | 
|Aggregate change in the Standardized measure of discounted future net cash flows for the year         |  |      | (708,435    | ) |      |  | (40,199,093 | )    | 



F-107


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Exhibit 1 - Consolidated companies, associates
and joint ventures



Consolidated subsidiaries



|Company                              |  | Functionalcurrency |  | OwnershipinterestEcopetrol |  | Activity                                        |  | Shared interest                                                                                                                                                                 |  | Country/ Domicile        |  | Geographic area
    ofoperations |  | Net equity |  | Income (loss) forthe period |  
|------------------------------------ |  | ------------------ |  | -------------------------- |  | ----------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ |  | -------------------------------- |  | ---------- |  | --------------------------- | -
|Ecopetrol Global Energy S.L.U        |  | U.S. Dollar        |  | 100%                       |  | Investment vehicle                              |  | Ecopetrol America Inc., Ecopetrol
    Oleo & Gas do Brazil Ltda., Ecopetrol del Perú S. A.,ECP Oil and Gas Germany GmbH Gmbh, Refinería
    de Cartagena S. A., Bioenergy S. A. |  | Spain                    |  | Spain                            |  | 2,727,352  |  | (380,156                    | )
|Ecopetrol Oleo é Gas do Brazil Ltda. |  | Real               |  | 100%                       |  | Hydrocarbon exploration and explotation         |  | Sociedad Portuaria de Oleofinas
    y Derivados, Propileno del Caribe S. A                                                                                                      |  | Brazil                   |  | Brazil                           |  | 27,617     |  | (50,849                     | )
|Ecopetrol del Perú S. A.             |  | U.S. Dollar        |  | 100%                       |  | Hydrocarbon exploration and explotation         |  | -                                                                                                                                                                               |  | Peru                     |  | Peru                             |  | 51,523     |  | (2,847                      | )
|Ecopetrol América Inc.               |  | U.S. Dollar        |  | 100%                       |  | Hydrocarbon exploration and explotation         |  | Ecopetrol Perú S.A., Ecopetrol
    Oleo é Gas do Brazil Ltda., Propileno del Caribe S. A, Sociedad Portuaria de Oleofinas y Derivados                                           |  | United States of America |  | United States of America         |  | 2,645,772  |  | (298,055                    | )
|Black Gold Re Ltd.                   |  | U.S. Dollar        |  | 100%                       |  | Reinsurer of Ecopetrol and its
    subsidiaries |  | -                                                                                                                                                                               |  | Bermuda                  |  | Bermuda                          |  | 581,901    |  | 36,808                      |  
|ECP Oil and Gas Germany GmbH         |  | U.S. Dollar        |  | 100%                       |  | Hydrocarbon exploration and explotation         |  | -                                                                                                                                                                               |  | Germany                  |  | Angola                           |  | 2,476      |  | (27,530                     | )
|Hocol Petroleum Limited              |  | U.S. Dollar        |  | 100%                       |  | Investment vehicle.                             |  | Hocol S. A.                                                                                                                                                                     |  | Bermuda                  |  | Bermuda                          |  | 2,267,217  |  | (15,627                     | )
|Hocol S.A                            |  | U.S. Dollar        |  | 100%                       |  | Hydrocarbon exploration and explotation         |  | ODC, Oleoducto Bicentenario                                                                                                                                                     |  | Cayman Islands           |  | Colombia                         |  | 1,563,126  |  | 659                         |  



F-108


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|Company                                         |  | Functionalcurrency |  | OwnershipinterestEcopetrol |  | Activity                                                                                 |  | Shared interest                                                                                             |  | Country/ Domicile |  | Geographic areaof operations |  | Net equity |  | Income (loss) forthe period |  
|----------------------------------------------- |  | ------------------ |  | -------------------------- |  | ---------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | ----------------- |  | ---------------------------- |  | ---------- |  | --------------------------- | -
|Andean Chemicals Ltd.                           |  | U.S. Dollar        |  | 100%                       |  | Investment vehicle                                                                       |  | Bioenergy S. A., Refinería
    de Cartagena, Propileno del Caribe S. A. y Comai S.A.                        |  | Bermuda           |  | Bermuda                      |  | 4,857,372  |  | (1,564,731                  | )
|Refinería de Cartagena S. A.                    |  | U.S. Dollar        |  | 100%                       |  | Hydrocarbons refining, marketing
    and distribution                                    |  | -                                                                                                           |  | Colombia          |  | Colombia                     |  | 6,969,793  |  | (2,205,876                  | )
|Propileno del Caribe Propilco S. A.             |  | U.S. Dollar        |  | 100%                       |  | Production and marketing of polypropylene
    resin                                      |  | Comai S. A., Refinería
    de Cartagena., Bioenergy S. A., Sociedad Portuaria Oleofinas y Derivados         |  | Colombia          |  | Colombia                     |  | 1,195,760  |  | 191,060                     |  
|COMAI - Compounding and Masterbatching Industry |  | Colombian peso     |  | 100%                       |  | Manufacturing of polypropylene
    compounds and master batches for a wide range of uses |  | Refinería de Cartagena.,
    Bioenergy S. A., Zona franca de Cartagena S.A , Sociedad  Portuaria del  Dique |  | Colombia          |  | Colombia                     |  | 131,227    |  | 103,888                     |  
|Bioenergy S. A.                                 |  | Colombian peso     |  | 98.46%                     |  | Biofuels production                                                                      |  | Bioenergy Zona Franca S. A., Amandine
    Holdings Corp. y Los Arces Group Corp.                            |  | Colombia          |  | Colombia                     |  | 313,824    |  | (475,294                    | )
|Bioenergy Zona Franca S. A.                     |  | Colombian peso     |  | 98.46%                     |  | Biofuels production                                                                      |  | -                                                                                                           |  | Colombia          |  | Colombia                     |  | 251,185    |  | (362,102                    | )
|Amandine Holdings Corp.                         |  | Colombian peso     |  | 98.46%                     |  | In a winding-up process                                                                  |  | -                                                                                                           |  | Panama            |  | Panama                       |  | 6,657      |  | -                           |  
|Los Arces Group Corp.                           |  | Colombian peso     |  | 98.46%                     |  | In a winding-up process                                                                  |  | -                                                                                                           |  | Panama            |  | Panama                       |  | 5,100      |  | -                           |  
|Cenit S.A.S.                                    |  | Colombian peso     |  | 100%                       |  | Storage and transportation through
    hydrocarbon pipelines                             |  | Oleoducto Bicentenario, Ocensa,
    ODC, ODL, Sento S.A.S, Serviport                                        |  | Colombia          |  | Colombia                     |  | 10,767,210 |  | 2,915,342                   |  



F-109


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




|Company                                |  | Functionalcurrency |  | OwnershipinterestEcopetrol |  | Activity                                                                                        |  | Shared
    interest |  | Country/
    Domicile |  | Geographic
    area ofoperations |  | Net
    equity |  | Income
    (loss) forthe period |  
|-------------------------------------- |  | ------------------ |  | -------------------------- |  | ----------------------------------------------------------------------------------------------- |  | ------------------- |  | --------------------- |  | -------------------------------- |  | -------------- |  | ------------------------------- | -
|Oleoducto Central S. A. - Ocensa       |  | U.S. Dollar        |  | 72.65%                     |  | Pipeline transportation of crude
    oil                                                        |  | -                   |  | Colombia              |  | Colombia                         |  | 2,446,722      |  | 1,779,134                       |  
|ODL S. A.                              |  | Colombian peso     |  | 65%                        |  | Pipeline transportation of crude
    oil                                                        |  | -                   |  | Panama                |  | Colombia                         |  | 1,044,369      |  | 341,362                         |  
|Oleoducto de Colombia S. A. – ODC      |  | Colombian peso     |  | 73%                        |  | Pipeline transportation of crude
    oil                                                        |  | -                   |  | Colombia              |  | Colombia                         |  | 288,734        |  | 237,787                         |  
|Oleoducto Bicentenario de Colombia SAS |  | Colombian peso     |  | 55.97%                     |  | Pipeline transportation of crude
    oil                                                        |  | -                   |  | Colombia              |  | Colombia                         |  | 945,026        |  | 440,371                         |  
|Ecopetrol Capital AG                   |  | U.S. Dollar        |  | 100%                       |  | Financing, liquidation of funding
    for companies, groups or any business or related activity |  | -                   |  | Switzerland           |  | Switzerland                      |  | 1,098,981      |  | 143,805                         |  
|Ecopetrol Global Capital SLU           |  | Euro               |  | 100%                       |  | Investment vehicle                                                                              |  | -                   |  | Spain                 |  | Spain                            |  | 31             |  | (53                             | )
|Ecopetrol Costa Afuera S.A.S.          |  | Colombian peso     |  | 100%                       |  | Offshore exploration                                                                            |  | -                   |  | Colombia              |  | Colombia                         |  | 7,954          |  | (1,834                          | )
|Sento S.A.S.                           |  | Colombian peso     |  | 100%                       |  | Investments in hydrocarbon
    transportation business                                          |  | ODC                 |  | Colombia              |  | Colombia                         |  | 21,453         |  | 10,918                          |  





F-110


Ecopetrol S.A.Notes to Consolidated Financial Statements(Figures expressed in millions of Colombian pesos, unless otherwise stated)




Associates and joint ventures



|Company                                          |  | Functionalcurrency |  | OwnershipinterestEcopetrol |  | Activity                                                                                                          |  | Country/Domicile         |  | Geographic
    area ofoperations |  | Net
    equity |  | Income
    (loss) for theperiod |  
|------------------------------------------------ |  | ------------------ |  | -------------------------- |  | ----------------------------------------------------------------------------------------------------------------- |  | ------------------------ |  | -------------------------------- |  | -------------- |  | ------------------------------- | -
|                                                 |  |                    |  |                            |  |                                                                                                                   |  |                          |  |                                  |  |                |  |                                 |  
|Associates                                       |  |                    |  |                            |  |                                                                                                                   |  |                          |  |                                  |  |                |  |                                 |  
|Invercolsa S.A. (*)                              |  | Colombian
    peso |  | 43.35%                     |  | Investment
    in companies of transport and distribution of natural gas and L.P.G. in Colombia                   |  | Colombia                 |  | Colombia                         |  | 560,915        |  | 111,997                         |  
|Serviport S.A.                                   |  | Colombian peso     |  | 49%                        |  | Services for oil-vessel loading
    and unloading support; supply of equipment; technical inspections and loading |  | Colombia                 |  | Colombia                         |  | 18,259         |  | 877                             |  
|Sociedad Portuaria Olefinas y Derivados S.A. (*) |  | Colombian peso     |  | 50%                        |  | Construction, use, maintenance,
    adaptation and administration of ports and private or public docks facilities |  | Colombia                 |  | Colombia                         |  | 2,669          |  | 469                             |  
|                                                 |  |                    |  |                            |  |                                                                                                                   |  |                          |  |                                  |  |                |  |                                 |  
|Joint ventures                                   |  |                    |  |                            |  |                                                                                                                   |  |                          |  |                                  |  |                |  |                                 |  
|Equion Energía
    Limited                       |  | U.S.
    Dollar    |  | 51%                        |  | Hydrocarbon
    exploration, exploitation and production                                                          |  | United
    Kingdom       |  | Colombia                         |  | 1,530,858      |  | 279,515                         |  
|Ecodiesel Colombia S.A.                          |  | Colombian peso     |  | 50%                        |  | Production, commercialization
    and distribution of biofuels and oleo chemicals                                 |  | Colombia                 |  | Colombia                         |  | 79,050         |  | 24,176                          |  
|Offshore International Group                     |  | U.S. Dollar        |  | 50%                        |  | Hydrocarbon exploration, exploitation
    and production                                                          |  | United States of America |  | Peru                             |  | 1,192,980      |  | (248,037                        | )



(*) Information available as of November 30, 2016.



F-111











| | 9. | Signature Page
| | -- | --------------



SIGNATURES



The registrant hereby certifies that it
meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual
report on its behalf.



|                     | Ecopetrol S.A.
|-------------------- | --------------
|                     |               
|                     | By:           
|                     |               
|                     |               
|                     |               
|                     | By:           
|                     |               
|                     |               
|                     |               
|Dated:  May 30, 2017 |               



152







| | 10. | Exhibits
| | --- | --------



|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                      
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1         |  | Amended and Restated Bylaws of Ecopetrol S.A., dated March 26, 2015, as recorded under Public Deed No. 1049 of May 19, 2015 (incorporated by reference to Exhibit 3.1 on Form 6-K of the Company, furnished to the U.S. Securities and Exchange Commission on November 27, 2015 (File No. 001-34175)) (English Translation).                                                     
|4.1         |  | Transportation Agreement between Ecopetrol S.A. and Oleoducto Central S.A., dated March 31, 1995 (incorporated by reference to Exhibit 4.1 on Form 20-F filed with the U.S. Securities and Exchange Commission on September 12, 2008 (File No. 001-34175)) (English Translation).                                                                                                
|4.2         |  | Supplementary Agreement to Transportation Agreement between Ecopetrol S.A. and Oleoducto Central S.A., dated January 17, 2013 (incorporated by reference to Exhibit 4.2 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 29, 2013 (File No. 001-34175)) (English Translation).                                                                       
|4.3         |  | Natural Gas Transportation Agreement between Ecopetrol S.A. and Transportadora de Gas del Interior S.A. ESP, dated October 1, 2008 (incorporated by reference to Exhibit 4.3 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 29, 2013 (File No. 001-34175)) (English Translation).                                                                  
|4.4         |  | Supplementary Agreement No. 1, dated December 5, 2008, to the Natural Gas Transportation Agreement between Ecopetrol S.A. and Transportadora de Gas del Interior S.A. ESP, dated October 1, 2008 (incorporated by reference to Exhibit 4.4 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 29, 2013 (File No. 001-34175)) (English Translation).    
|4.5         |  | Supplementary Agreement No. 2, dated April 11, 2012, to the Natural Gas Transportation Agreement between Ecopetrol S.A. and Transportadora de Gas Internacional S.A. E.S.P., dated October 1, 2008 (incorporated by reference to Exhibit 4.5 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 29, 2013 (File No. 001-34175)) (English Translation).  
|4.6         |  | Crude Oil Transportation Services Agreement between Ecopetrol S.A. and Cenit Transporte y Logística de Hidrocarburos S.A.S., dated April 1, 2013 (incorporated by reference to Exhibit 4.6 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 29, 2013 (File No. 001-34175)) (English Translation).                                                    
|4.7         |  | Refined Products Transportation Services Agreement between Ecopetrol S.A. and Cenit Transporte y Logística de Hidrocarburos S.A.S., dated April 1, 2013 (incorporated by reference to Exhibit 4.7 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 29, 2013 (File No. 001-34175)) (English Translation).                                             
|4.8         |  | Indenture, dated as of July 23, 2009, between the Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Form F-4 filed with the U.S. Securities and Exchange Commission on July 31, 2009 (File No. 333-160965)).                                                                                                        
|4.9         |  | Bicentenario Transport Contract between Oleoducto Bicentenario de Colombia S.A.S. and Ecopetrol S.A., dated June 20, 2012 incorporated by reference to Exhibit 4.9 on Form 20-F filed with the U.S. Securities and Exchange Commission on April 25, 2014 (File No. 001-34175)) (English Translation).                                                                            
|4.10        |  | Amendment No. 1 to the Indenture, dated as of June 26, 2015, between the Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.10 on Form 6-K of the Company furnished to the U.S. Securities and Exchange Commission on June 25, 2015 (File No. 001-34175)).                                                                              
|4.11        |  | Supplementary Agreement No. 2, dated March 28, 2014, to the Bicentenario Transport Contract between Oleoducto
    Bicentenario de Colombia S.A.S. and Ecopetrol S.A., dated June 20, 2012 (incorporated by reference to Exhibit 4.11 on Form
    20-F filed with the U.S. Securities and Exchange Commission on April 28, 2016 (File No. 001-34175))   (English
    Translation).
|4.12        |  | Supplementary Agreement No. 4, dated April 6, 2015, to the Bicentenario Transport Contract between Oleoducto Bicentenario
    de Colombia S.A.S. and Ecopetrol S.A., dated June 20, 2012 (incorporated by reference to Exhibit 4.12 on Form 20-F filed with
    the U.S. Securities and Exchange Commission on April 28,2016 (File No. 001-34175)) (English Translation).        
|4.13        |  | Amendment No. 6, dated April 25, 2016, to the Crude Oil Transportation Services Agreement between Ecopetrol S.A. and Cenit Transporte y Logística de Hidrocarburos S.A.S., dated April 1, 2013 (English Translation).                                                                                                                                                            





153







|Exhibit No. |  | Description                                                                                                                                                                                                             
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.14        |  | Amendment No. 7, dated December 28, 2016, to the Crude Oil Transportation Services Agreement between Ecopetrol S.A. and Cenit Transporte y Logística de Hidrocarburos S.A.S., dated April 1, 2013 (English Translation).
|8.1         |  | List of subsidiaries of Ecopetrol S.A.                                                                                                                                                                                  
|12.1        |  | Section 302 Certification of the Chief Executive Officer.                                                                                                                                                               
|12.2        |  | Section 302 Certification of the Chief Financial Officer.                                                                                                                                                               
|13.1        |  | Section 906 Officer Certification.                                                                                                                                                                                      
|99.1        |  | Third-Party Reserve Report of Ryder Scott Company, L.P.                                                                                                                                                                 
|99.2        |  | Third-Party Reserve Report of DeGolyer and MacNaughton.                                                                                                                                                                 



| | 11. | Cross-reference to Form 20-F
| | --- | ----------------------------



|         |                                                         | Sections                                                                                                                                              
|-------- | ------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1.  | Identity of Directors, Senior Management and Advisers   | N/A                                                                                                                                                   
|Item 2.  | Offer Statistics and Expected Timetable                 | N/A                                                                                                                                                   
|Item 3.  | Key Information                                         |                                                                                                                                                       
|         | A. Selected Financial Data                              | 1.3                                                                                                                                                   
|         | B. Capitalization and Indebtedness                      | N/A                                                                                                                                                   
|         | C. Reasons for the Offer and Use of Proceeds            | N/A                                                                                                                                                   
|         | D. Risk Factors                                         | 5.1                                                                                                                                                   
|Item 4.  | Information on the Company                              | Note 1 to the consolidated financial statements                                                                                                       
|         | A. History and Development of the Company               | 2.1; 3.1; Note 1 to the consolidated financial statements                                                                                             
|         | B. Business Overview                                    | 2; 3.3 – 3.9; 4.5.1                                                                                                                                   
|         | C. Organizational Structure                             | 3.2                                                                                                                                                   
|         | D. Property, Plants and Equipment                       | 3.4 – 3.6; 4.6.2; Notes 15, 16 and 18 to the consolidated financial statements                                                                        
|         | E. Oil and Gas Disclosures                              | 3.3 – 3.6; Notes 15 and 16 and Supplemental information on Oil and Gas producing activities (unaudited by EY) to the consolidated financial statements
|Item 4A. | Unresolved Staff Comments                               | None                                                                                                                                                  
|Item 5.  | Operating and Financial Review and Prospects            |                                                                                                                                                       
|         | A. Operating Results                                    | 3.8; 4; 5.1; 5.2                                                                                                                                      
|         | B. Liquidity and Capital Resources                      | 2.1; 4.6; 4.8; Consolidated statements of cash flow and Notes 9, 20, 30  and 31.6 to the consolidated financial statements                            
|         | C. Research and development, Patents and Licenses, etc. | 3.7; Note 18 to the consolidated financial statements                                                                                                 
|         | D. Trend Information                                    | 4.10                                                                                                                                                  
|         | E. Off-Balance Sheet Arrangements                       | 4.9                                                                                                                                                   
|         | F. Tabular Disclosure of Contractual Obligations        | 4.8                                                                                                                                                   
|         | G. Safe Harbor                                          | 1.2                                                                                                                                                   
|Item 6.  | Directors, Senior Management and Employees              |                                                                                                                                                       
|         | A. Directors and Senior Management                      | 7.3; 7.5                                                                                                                                              
|         | B. Compensation                                         | 7.6; Notes 4, 22 and 32 to the consolidated financial statements                                                                                      
|         | C. Board Practices                                      | 7.3                                                                                                                                                   
|         | D. Employees                                            | 3.12                                                                                                                                                  
|         | E. Share Ownership                                      | 7.7                                                                                                                                                   





154







|          |                                                                              | Sections                                                                   
|--------- | ---------------------------------------------------------------------------- | ---------------------------------------------------------------------------
|Item 7.   | Major Shareholders and Related Party Transactions                            |                                                                            
|          | A. Major Shareholders                                                        | 6.3; 6.8; 7.7                                                              
|          | B. Related Party Transactions                                                | 3.10; Note 32 to the consolidated financial statements                     
|          | C. Interests of Experts and Counsel                                          | N/A                                                                        
|Item 8.   | Financial Information                                                        |                                                                            
|          | A. Consolidated Statements and Other Financial Information                   | 4; 5.3; 6.2; 8                                                             
|          | B. Significant Changes                                                       | 7.8; Note 36 to the consolidated financial statements                      
|Item 9.   | The Offer and Listing                                                        |                                                                            
|          | A. Offer and Listing Details                                                 | 6.3                                                                        
|          | B. Plan of Distribution                                                      | N/A                                                                        
|          | C. Markets                                                                   | 6.3                                                                        
|          | D. Selling Shareholders                                                      | N/A                                                                        
|          | E. Dilution                                                                  | N/A                                                                        
|          | F. Expenses of the Issue                                                     | N/A                                                                        
|Item 10.  | Additional Information                                                       |                                                                            
|          | A. Share Capital                                                             | N/A                                                                        
|          | B. Memorandum and Articles of Association                                    | 7.1                                                                        
|          | C. Material Contracts                                                        | 3.4.4; 4.8; Exhibits 4.1 – 4.12                                            
|          | D. Exchange Controls                                                         | 5.1.4; 6.6                                                                 
|          | E. Taxation                                                                  | 4.2.1; 6.5; Note 10 to the consolidated financial statements               
|          | F. Dividends and Paying Agents                                               | N/A                                                                        
|          | G. Statements by Experts                                                     | N/A                                                                        
|          | H. Documents On Display                                                      | 1.1                                                                        
|          | I. Subsidiary Information                                                    | N/A                                                                        
|Item 11.  | Quantitative and Qualitative Disclosures About Market Risk                   | 4.10; 5.1.1; 5.2.1; 5.2.3; Note 31 to the consolidated financial statements
|Item 12.  | Description of Securities Other than Equity Securities                       |                                                                            
|          | A. Debt Securities                                                           | N/A                                                                        
|          | B. Warrants and Rights                                                       | N/A                                                                        
|          | C. Other Securities                                                          | N/A                                                                        
|          | D. American Depositary Shares                                                | 6.4                                                                        
|Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              | None                                                                       
|Item 14.  | Material Modifications to the Rights of Security Holders and Use of Proceeds | None                                                                       
|Item 15.  | Controls and Procedures                                                      | 5.2; 7.8                                                                   
|Item 16A. | Audit Committee Financial Expert                                             | 7.3.2                                                                      
|Item 16B. | Code of Ethics                                                               | 7.2; 7.4                                                                   
|Item 16C. | Principal Accountant Fees and Services                                       | 7.8                                                                        
|Item 16D. | Exemptions from the Listing Standards for Audit Committees                   | N/A                                                                        
|Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchases        | N/A                                                                        
|Item 16F. | Changes in Registrant’s Certifying Accountant                                | 7.8                                                                        
|Item 16G. | Corporate Governance                                                         | 7.4                                                                        
|Item 16H. | Mine Safety Disclosure                                                       | N/A                                                                        
|Item 17.  | Financial Statements                                                         | N/A                                                                        
|Item 18.  | Financial Statements                                                         | 8                                                                          
|Item 19.  | Exhibits                                                                     | 10                                                                         



155