Ecopetrol’s CEO first day in office

COLOMBIA - In Brief 26 Apr 2023 by Andres Escobar

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Public policy announcements made by government officials are one thing, and corporate strategy announcements, made by a business group CEO are an entirely different matter. If someone in government thinks, rightly or wrongly, that Colombia must eventually abandon oil and gas, that's up to them. The Minister and the President of the Republic could say so. That, however, is not the responsibility of the president of Ecopetrol. His responsibility is to maximize the long-term value of the company, its cash generation, operational excellence and the search for more hydrocarbons and markets. What shareholders and bondholders want to hear from the Ecopetrol’s CEO is that he will be dedicated 24/7 to search for oil and gas, produce it cheaply and sell it dearly in world markets, guaranteeing Colombia's self-sufficiency of combustibles, and lead a world-class organization. Period. If, on top of that (and not instead), an aggressive agenda in renewables is put in place, all the better.  The message that “from the environmental point of view, what is responsible is to no longer allow for the search of more fossil fuels” that Mr. Gustavo Roa, the new CEO, reportedly said in an interview during his first day in office was not well received. It is not clear whether he was referring to a matter of public policy or to a corporate decision not to seek new exploration contracts, but the lack of clarity on Mr. Roa's part became in itself a problem. Apparently, Roa's message did not stand well with Ecopetrol's board. That of course is a wink to president Petro, but it falls terribly in the markets, as it could reveal a loss of focus on his tasks and responsibilities. The approximately 10%...