Board will review whether Ecopetrol continues to frack in the US – Sectors – Economy

Saúl Kattan, president of the board of directors, spoke with EL TIEMPO about the planes that are coming to the company with the start of a new stage without Felipe Bayón in command, starting next April 1st.

With the departure of Felipe Bayón from Ecopetrol on March 31 and the arrival of a new president, the the expectation about the future that awaits what is considered the most important company in the country.

In an interview with EL TIEMPO, Saúl Kattan, president of the board of directors, provides details of the process that he will carry out to find the replacement for Bayón and the a path that Ecopetrol will continue to follow in the energy transition, but without neglecting the production of hydrocarbons.

In addition, he mentions that at some point it would be reviewed whether or not the company continues with its fracking operations in the United States, a business that in just three years became Ecopetrol’s most profitable and that in the first nine months of 2022 earnings of 936,000 million pesos.

What is the profile that the new president of Ecopetrol should have?

The board is working on a profile that is very much in line with what was already in place in the company before. It was complemented by the new realities of today and by thinking a little more about the energy transition, but basically it is very similar to what the board had already tried in past years.

If the same profile is sought, what is the reason for the departure of Felipe Bayón?

The departure of Felipe Bayón, more than a profile issue as has been said publicly, occurs because the company must be given oxygenation. Bayón is going to celebrate seven years at Ecopetrol and he wanted to look at new opportunities. From the board side, we see that the company also needs a different air, as happens in all companies in the world.

If one looks at the largest companies in the world, on average, the presidents are seven years old, and studies by the great universities in the United States, such as Harvard, show that the ideal time for a president is seven years.After this time, a custom to the same things begins to form and prevents things from continuing to evolve. It’s nothing different than that.

Will the name of the new president be known before March 31?

We are going to try, we are working on the attainment of a firm talent house and we are going to see how long the process lasts, taking into account the candidates that are presented and if the board agrees to select them or not.

This can last 8 weeks, a little less or a little more, but there is no set time. I wish it was before March 31, of course.

What will the selection process be like?

A firm will be hired to look for Colombian or foreign candidates, there is no preference. Different candidates will be evaluated according to what the company needs and suitable are the people who best fit, not only in profile but salary, culturally and politically, among other aspects.
The firm will present two or three finalists to the board of directors, which will make the decision on what seems best to them.

Ricardo Roa is one of the candidates that has sounded the most. Will he be among the chosen ones?

Everything is possible but the process has not started yet, so we cannot say that Ricardo is in the process. We don’t know if he’s going to participate in the process and if he does, we’ll see how it goes.

And are you interested in applying for your resume?

For now I am a member of the board and president, initially I will not participate in the process. If they ask me to participate, I will evaluate it at the time.

Is it going to continue to be important to produce oil at Ecopetrol?

Of course. Oil currently represents 85 percent of the company’s income, so it is very important.

I would like, as chairman of the board, see an Ecopetrol that is producing a million barrels or more (in the third quarter of 2022 it was 720,400 boped)but that oil revenues weigh less than 80 percent.

This means that the energy transition has been successful and income is growing, however, we are growing oil production. I believe that if these two things are achieved we will have a super valuable, very powerful company and a very successful transition.

Is this goal of barrels for what term is it thinking?

I hope that in the medium term, Ecopetrol will exceed one million barrels.

Would Ecopetrol generate energy again with what is being considered in the PND?

We will see what happens in the National Development Plan (PND), I would think that it would be more through ISA that energy could be generated. It would be fair if ISA could generate energy, today it is at a disadvantage compared to many of the companies in the sector. I would think that this topic should be reviewed.

What will the energy transition plans be?

We have many projects. 2023 is a year with a very important investment for the company and, for the first time, we are going to have 25 percent of the investments allocated to energy transition issues. This is the largest investment in Ecopetrol’s history in general terms and It is the largest in energy transition or green energy issues.

It is a historic year for Ecopetrol and there will be initiatives of all kinds. We will be working on green hydrogen, solar and wind projects, which are going to begin to draw an important line towards the future for the company.

Are you considering importing natural gas from Venezuela?

At the moment, At Ecopetrol we are not contemplating the import of gas from anywhere. We are working with the gas we have and it is a significant amount.

We have some explorations that we are working on, with very important gas prospects and we must, above all, work on the country’s energy sovereignty.I believe that this is a fundamental issue in which Ecopetrol has to lead and we are working towards that.

Does the board support fracking operations in the United States?

We are convinced that in Colombia we are not going to do fracking. The Government has said no to fracking and we don’t have a problem with that. I think we can continue producing oil, exploring and doing many projects without fracking in Colombia.

In the United States we have a fracking operation that is interesting and profitable. At some point we will review whether or not that operation continues at Ecopetrol, but for now it continues.

When could that review be given?

Not this year, but at Ecopetrol we are constantly evaluating investments and divestments as any company does worldwide. At the right time we will have to get out of investments. Sometimes, when investments are very successful or when they do not work, they have to be sold, this is a permanent task in all companies worldwide and Ecopetrol is no exception..

Here, unfortunately, we politicize issues and when we sell or buy we relate it to a political issue, but the decisions are purely technical and economic for the company.

Do planes also include entering a new country?

We are permanently looking at projects inside and outside Colombia. I am struck by the statements of the Colombian Oil and Gas Association (ACP) that says that investments will drop during 2023 when Ecopetrol, which is the leader of the sector in Colombia, has a record of investments. These statements seem paradoxical to me.

If we were so concerned and if the issue of political, legal and tax instability affected us, perhaps we would go to another country to invest, but we are convinced of the opportunities in Colombia, for us Colombia is the most important market and it will continue to be so.

Is there a chance that the president of ISA will be changed?

Companies constantly evaluate their executives and strategies. When the new president (of Ecopetrol) arrives, he will review and decide, as president of ISA’s board, if the administration is correct or not. That is decided by the ISA board, which is led by the president of Ecopetrol.

How did Ecopetrol’s reserves fare in 2022?

Reserves and production continue to grow. We are in a very good moment. I am very optimistic that this will continue to grow much more and I am very optimistic about the future, not only for Colombia but also for this company that is very dear to Colombians.

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