Bayón, who has held the position since 2017, leaves his post amid Colombian President Gustavo Petro’s push for the country to transition to renewable energy. His new Administration has reiterated its decision not to award new oil and gas exploration contracts. It will only allow existing contracts to continue.
“Considering the quality of the management team and the high standards of governance of Ecopetrol in recent years, the departure of Felipe Bayón will probably be frowned upon by investors”said Daniel Guardiola, an economist at BTG Pactual. “Investor concerns about government interference are likely to grow”although the move was widely anticipated.
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In another sign of government intervention, Petro said on Thursday it will take control, temporarily, of the body responsible for residential water and electricity services in Colombia, where prices have risen for consumers.
The yield on Ecopetrol’s dollar bonds due 2033 rose 22 basis points to 8.86% in early trading on Friday, according to Trace data. Ecopetrol sold US$2 billion in these securities earlier this year.
An Ecopetrol spokesperson declined to comment on the reasons for Bayón’s departure.
The measures were disclosed in a statement made after the close of operations on Thursday in Bogotá. Since the beginning of April 202, they are down more than 25%. Ecopetrol’s US-listed ADRs fell 1.8% in early trading on Friday.
Colombia’s Minister of Energy and Mines, Irene Vélez, told a panel in Davos earlier this month that the Administration’s plan was “Leave coal and hydrocarbons and survive as a nation.” SHis comments did not coincide with those of other members of the Petro Administration, such as the Minister of Finance, José Antonio Ocampo, who said that Colombia was open to the possibility of new contracts given its high fiscal dependence on fossil fuels.
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They criticized Vélez earlier this week when they questioned the ministry about data indicating the country’s gas resources were sufficient to meet domestic demand until at least 2037. Vélez said he supported the data, which included proven and probable reserves.
Source: Gestion
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