ecopetrol, the most important company for the Colombian economy, is preparing to have a new president starting in April. A change that will take place in what could be classified as the best moment for oil, not only because of its financial results, but also because of the recognition it has achieved internationally.

Although the Minister of Finance, José Antonio Ocampo, said that his departure from Ecopetrol was taken by the board of directors, Felipe Bayon He stated that it was an agreed decision. “We managed to have that conversation and come to an agreement,” she said.

(You can also read: Creg responds to Petro: ‘Regulatory bodies must be independent’)

Therefore, as he will be until March 31, he will be able to lead the delivery of financial results and the company’s 2022 reserves report, and at the general shareholders’ meeting, which was held on the last Friday of March. .

“Institutions and organizations must be preserved in life. People come and go and it is important to close the cycles, and what better way than to leave with the satisfaction of having fulfilled your duty, having been part of Ecopetrol’s transformation”, said Bayón.

By the time he retires, he will have served more than seven years with the company. He was first executive vice president and then president, since September 2017.
Bayón assures that his greatest pride is having helped transform Ecopetrolwhich is on its way to becoming a leader in the energy transition in the country and in the region, but without neglecting oil and gas production, not only in Colombia, but also in the countries where it operates, such as Brazil and the United States.

«He bet on preparing Ecopetrol for the future without renouncing oil and natural gas as the foundations of the company’s solidity, credibility and stability, and as an engine for the economic, social and environmental development of the country and the regions», highlights Francisco José Lloreda, president of the Colombian Petroleum Association (ACP).

After the company initially said that solar farms were not possible —“financially the numbers were not there”—, now it has 200 megawatts in operation, which includes the projects that have been inaugurated in Huila (Ecoparque solar Brisas ) and in Meta (Castilla and San Fernando).

(Also: The challenges that the new president of Ecopetrol will have, according to Felipe Bayón).

Bayón took office as president of Ecopetrol on September 15, 2017 and will retire on March 31.


Rodrigo Sepulveda. WEATHER Archive

The company became the largest self-generator of renewable energy in Colombia and the goal for 2025 is to reach 900 megawatts in solar, wind, geothermal, biomass, small hydroelectric projects and the use of batteries.

The departure of Bayón not only worries the sector and investors, a technical person who has stood out for his work at the head of the company is leaving, but also because the future of this becomes uncertainsince President Gustavo Petro is not in favor of continuing with the exploration and production of hydrocarbons.

This uncertainty was reflected in the 3.19 percent drop that strengthened its share last Friday on the BVC, closing at 2,607 pesos, while on the New York Stock Exchange it was 5.69 percent and ended at 11, 28 dollars.

According to Felipe Campos, Investment and Strategy Manager at Alianza Valores, the reaction was moderate because there was a very high possibility that the government would make this change in the presidency. «The action is quite cheap compared to its peers and has an expectation of paying very good dividends», is not allowed.

However, in the market it generates noise that the announcement of the departure of Bayón has been given in the midst of the strong questions that the Minister of Mines and Energy, Irene Vélez, has had due to the balance of oil contracts that was used to announce that no more contracts will be awarded, and after his participation in the World Economic Forum in Davos, where he reiterated that hydrocarbons are necessary while progress continues in the energy transition.

More taking into account that on October 27, 2022, after the arrival of the new government, the new board of directors expressed its support for the Ecopetrol management team and Bayón.

Another issue of concern, according to Alberto Bernal, director of Global Strategy at XP Investments, is the risk that exists that other important executives or highly relevant engineers could leave the oil company.

(Also read: Uncertainty around the electricity sector due to Petro announcements).

Currently, the Colombian oil company has about 254,000 shareholders.

The value of Ecopetrol

ecopetrol concentrates 66 percent of the country’s total proven oil reserves and 79 percent of natural gas reserves, taking into account 21 percent from its subsidiary Hocol, at the end of 2021. In addition, it produces approximately 60 percent percent of the crude oil and 80 percent of the natural gas consumed in the country.

To this is added that it contributes 10 percent of the General Budget of the Nation and that it is responsible for the production of fuels in Colombia.

For Bayón, it is essential to continue advancing in the energy transition, while protecting its traditional business so that Colombians can have gasoline, diesel, jet and petrochemicals; and so that these businesses, which are increasingly decarbonizing, allow financing that transition that the new government seeks to accelerate.

Maintaining its production of hydrocarbons means protecting the company’s cash, which is what allows it to pay dividends, taxes and royalties to the Nation, which retains 88.49 percent of the company’s shares, while 11.51 percent The remaining one hundred are held by, among others, private pension funds and more than 254,000 Colombians.

«The most important thing is that there be continuity in the approach: make the transition, but without neglecting security of supply or the generation of royalties to finance social spending,» said Tomás González, former Minister of Mines and Energy.
Meanwhile, the president of the ACP assured that “the future of Ecopetrol depends on that of the oil and gas industry and, to a large extent, that of Colombia; its energy security, its macroeconomic and fiscal stability, and its sustainable development”.

The challenges that come

For Bayón, now the outstanding president of Ecopetrol, one of the main challenges that whoever replaces him will have will be to accelerate the development of natural gas discoveries that have occurred in the Piedmont Llanero and offshore, such as Uchuva and Gorgon-2, in for which the National Government has pinned its hopes on guaranteeing forward supply without the need to deliver new contracts.

Additionally, ensuring the crude oil required to load the Barrancabermeja and Cartagena refineries; and accelerate the energy transition agenda, which includes the entry of new solar parks that will be located in Cartagena (26 megawatts), Barrancabermeja (56 megawatts) and Campo Rubiales (100 megawatts), in Meta.

Wind weighing is also being carried out in Huila to review the viability of wind farms, a geothermal project will be implemented in Campo Apiay and 13 solar projects will be built in the transportation system, two green hydrogen projects in refineries and one small hydroelectric plant of 4.3 megawatts.

The person who becomes president of the most important company in Colombia, be sure the manager, already has a strategy up to 2040, an approved investment budget for this year and «should quickly begin to understand the business, see the opportunities and know characteristics are the challenges”. Likewise, he has the challenge of keeping the company resilient and operating efficiently and safely.

Bayon’s numbers

Although the financial results for the fourth quarter and the consolidated for 2022 remain to be known, Bayón has led the historical results that it has reported to Ecopetrol in recent months. Between January and September 2022, it accumulated profits of 26.6 trillion pesos, income of 119.8 trillion pesos, and an ebitda of 59.2 trillion pesos.

Production reached 705,900 barrels of oil equivalent per day, 13 exploratory wells were drilled and seven oil and gas discoveries were announced.

Added to this is the entry into the Permian basin in the United States, in 2019, hand in hand with Oxy, to frack. Production is almost 90,000 barrels per day and half (45,000 barrels) corresponds to Ecopetrol. It became the company’s most profitable business and in the first nine months of 2022 it obtained profits of 936,000 million pesos, compared to 188,000 million a year ago.

There is also the acquisition of 51.4 percent of ISA’s shares; the opening of new markets in Asia, with the start of operations of Ecopetrol Trade Asia, in Singapore; and the expansion of the capacity of the Cartagena Refinery to 200,000 barrels per day to meet the growing demand for refined products.

To elect the new president of Ecopetrol, an international firm will be hired and, for now, the one that sounds the most is Ricardo Roa, a trusted man of President Gustavo Petro and who was general manager of the Colombia Humana movement and president of Grupo Energía Bogotá (GEB). ) during his tenure as mayor of the nation’s capital.