Exit of Ecopetrol’s CEO Further Clouds the Future of Colombia’s Oil and Gas Sector

President Gustavo Petro has ushered in a new era for Colombia’s majority state-owned oil company, with a change of leadership that is being viewed by some as negative, amid the president’s plan to end oil and gas exploration

Ecopetrol CEO Felipe Bayón and Colombian President Gustavo Petro
January 27, 2023 | 02:24 PM

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Bogotá — The departure of Felipe Bayón from the presidency of Colombia’s majority state-owned oil company Ecopetrol (ECOPETL) adds more tension to the country’s oil and gas sector, following President Gustavo Petro’s announcement of the possible end to oil and gas exploration activities, and the questioning of Minister of Mines and Energy Irene Vélez regarding a controversial report on the balance of hydrocarbon contracts and available resources.

After Bayón’s participation in the World Economic Forum in Davos, where he defended an orderly energy transition with a possible 20-year horizon, the company announced that its CEO will leave the post on March 31.

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In October last year, Ecopetrol had already announced a restructuring of its leadership and informed that Saul Kattan had been elected as the new chairman of the board of directors. Regarding his possible takeover of the company’s chairmanship, Kattan said in an interview with Bloomberg Línea in November that “it is a job of the board to be looking at options and possibilities.”

“The board ratified Ecopetrol’s management, but as in all companies, there is a continuous evaluation and reviewing to be done to make the decisions that best suit the organization,” he said.


The speeches of Felipe Bayón and minister Irene Vélez in Davos were different in their approach to the energy transition, another of the issues on the radar of the new administration.

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While Bayón emphasized the need for a slow process “protecting the existing business”, the Vélez insisted on the government’s decision not to award new oil and gas exploration contracts as an “absolutely urgent” issue that needs “immediate action”.

On January 26, President Petro tweeted a comparison of the share prices of global oil companies in comparison with those of Ecopetrol, illustrating how those companies’ moves toward an energy transition have benefited them, while also replying to criticism of his policy to stop oil and gas exploration, saying that resources from the oil and gas industry will be used to invest in agriculture and renewable energy, “as the governments of the Arab world and Norway do”, while stating that “in Colombia the exploration for hydrocarbons will continue and that contracts signed remain valid”.


Bayón’s exit from the presidency of Ecopetrol after six years in the company took place under mutual agreement and on good terms, Bloomberg Línea has been able to confirm.

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“The process of selection and appointment of the new president of Ecopetrol by the board of directors will be based on a rigorous selection process, in accordance with the succession policy,” the oil company said in a statement.

An iguana at an Ecopetrol refinery in Barrancabermeja, Colombia, in February 2022.dfd

In the opinion of Andrés Duarte, director of variable income at Corficolombiana, Bayón’s position on sensitive issues such as the importance of oil exploration contracts, as well as others such as security and energy self-sufficiency, “at times have clashed with the visions and positions put forward by the new government”.

“Ecopetrol had started its transformation process in the face of the global and national energy transition. It is an orderly process that is embodied in the company’s long-term strategic plan,” he said.


Camilo Díaz, an economic analyst and professor at the Faculty of Economic Sciences of the Universidad Nacional, had already told Bloomberg Línea that “the market in general recognizes the good work that the management team led by Bayón has done, and this has translated into Ecopetrol’s operational and financial results”.

“One of the main drivers of valuation of Ecopetrol’s shares is the permanence of Felipe Bayón at the helm of the company,” he said at the time when the new board of directors was elected.

For Andrés Duarte, of Corficolombiana, Bayón’s departure “is negative news, and generates more uncertainty” in the midst of the discussions generated in the country by a controversial report of the Ministry of Mines and Energy which concluded in December that the contracts in force would guarantee self-sufficiency to Colombia in addition to surplus resources.


The document, which has been questioned even by the Vice Minister of Energy, Belizza Ruiz, also indicates that “the incorporation of these new resources to gas production would guarantee national supply beyond 2037″.

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The effect on Ecopetrol shares

Although Duarte warns about the possible impact of the executive’s exit on the markets, “there is a mitigating factor that may help to make it not so negative”, and which is that “the expectation of dividend distribution for 2023 is extremely high”.

“This has been what has generated the recovery of the share price recently, and this factor remains, independent of the departure of Bayón,” Duarte said.

However, in the case of the company’s bonds, he points out that there is no mitigating factor, so “they are probably going to have a greater correction, or a see a greater effect, because of what has just happened.”


“Hopefully the replacement will be very good and they will do very well, but for the time being the news is negative”, he said.

Ecopetrol’s shares closed at 2,693 Colombian pesos ($0.58) in Thursday’s session on the Colombian Stock Exchange, a rise of 1.09%, but on Friday, the shares opened at 2.30% lower, at 2,632 pesos, while at 13:00 hours local time the shares were down 3.01% to $2,612 pesos ($0.57).

The US dollar has been steady in recent days at 4,500 pesos, rising slightly on Friday following the news of Felipe Bayón’s imminent exit. The currency has accumulated a 14.79% depreciation against the US dollar over the past 12 months, but so far this year has appreciated 5.79%, according to the central bank.

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