Ecopetrol (NYSE:EC) isn't well known among most investors, but this may change soon because the company is in the midst of a plan to transform itself from a national oil company to a player in the energy industry.
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Ecopetrol is the national oil company of Colombia, but it began a transition several years ago to a more mixed ownership format. The company is still 89.9% owned by the government of Colombia.

Ecopetrol has a $90 billion market capitalization and is one of the best performing stocks in the energy sector, up 74% through the first nine months of 2010. The company reported average daily production of 589,300 barrels oil equivalent (BOE) per day in the first six months of 2010. This represented production growth of 17% from the same six months in 2009.

Ecopetrol is active in Colombia, Peru, Brazil and the Gulf of Mexico. The company reported proved reserves of 1.87 billion BOE at the end of 2009. Ecopetrol also owns two refineries in Colombia with capacity of 330,000 barrels per day, and nearly 9,000 kilometers of pipelines.

Strategic Plan
Ecopetrol adopted a strategic plan several years ago that will grow and reorient the company over the next decade. The plan calls for spending $80 billion from 2011 to 2020, with 80% of this devoted to the upstream segment. The company plans to finance most of this through internal cash generation, but will also issue up to $23 billion in debt and sell an additional $6.5 billion in equity to the public.

This ambitious capital spending plan over the next five years will lead to production of one million BOE per day by 2015, and 1.3 million BOE per day by 2020. The company will also add reserves of 6 billion BOE by 2020 if successful.

Ecopetrol is also continuing to invest in Colombia and, along with Talisman Energy (NYSE:TLM), recently purchased properties in Colombia owned by BP (NYSE:BP). The two companies paid $1.9 billion and will get 25,000 BOE per day of production, approximately 65% of which is liquids. Ecopetrol and Talisman Energy also get interests in many exploration areas in the country.

Ecopetrol is also partnering with other companies to develop and explore for oil and gas. In Peru, the company is working with Petrobras (NYSE:PBR) to develop Lot 117 in the onshore area of the country. The two companies are currently acquiring seismic data to help develop and exploration plan for the acreage.

Ecopetrol may be the largest oil and gas company that no one has ever heard but this won't be the case for long if the company can successfully execute its strategic plan over the next decade. (For related reading, take a look at the Oil And Gas Industry Primer.)

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