Saúl Kattan, president of the board of directors of the Colombian state oil company, spoke about the current situation of Ecopetrol, prior to the election of its new directors this Friday during the annual shareholders' meeting.
All eyes are on Ecopetrol as Colombia's most important company -- majority government owned and controlled by the administration of Gustavo Petro -- will elect a new board this March 22.
Recently portions of a prepared by Control Risks consultants for Ecopetrol were leaked to the press assessing the company's reputation and the risks associated with its CEO, Ricardo Roa, who is in the crosshairs of judicial proceedings for his role as President Petro's campaign manager in 2022.
Saúl Kattan, president of the board of directors of Ecopetrol, spoke about this issue, and assured that this kind of reports are customary to evaluate risks, partly based on news and information about the company.
“There are four scenarios in the report. It is confidential, so I cannot give details. The information will be considered for the board of directors to take the necessary measures so we maintain stability at Ecopetrol. I remain calm, in some scenarios risks decrease, in others they remain the same and in others they increase,” said the Kattan in an interview with Caracol Radio .
He added the Control Risk analysts provide recommendations for each scenario. At the same time, he stated that Roa's departure has not been contemplated. They will keep monitoring conditions as they change, along with risks conveyed.
“The incoming board will have a great responsibility for the company. I'm sure things will work out. In any case, institutions must be protected: people leave and institutions remain,” Kattan explained.
The executive added that given Ecopetrol's key role to Colombia, the report's confidentiality must be preserved in order to conduct calmed and independent analysis without external pressures. Once formally presented to the board, they could make the report public, according to Kattan.
“The new board will have some members that come from the current one. The new board will be presented with many topics and the report's recommendations are one of them. The decisions they have to make will be discussed,” the official concluded in his radio interview.
Ecopetrol's Governance Committee issued a statement last week saying that none of the five candidates proposed by Petro possess the necessary experience to make part of the new board, according to the document that was first reported by Bloomberg News .
“The good performance of Ecopetrol is vital for energy self-sufficiency in Colombia and to obtain investments required for energy transition,” says a report from Corficolombiana, an investment bank.
The current outlook for the oil company looks somewhat mixed: although in 2023 it reached its highest production levels in eight years, with 737,000 barrels of oil equivalent per day, its profits fell 42.9% compared to the previous year.
Reserves also declined, by 6.4%. It is worth clarifying that this is partly related with fluctuating international oil prices.
However, the company significantly improved production efficiency at its wells, which marks a strategic objective.
According to Ricardo Roa, president of Ecopetrol, 77% of the oil company's production is “based on the improved recovery that we have found in our fields, and we will continue working on that to maintain production levels.”
But, at the same time, this efficiency improvement may be insufficient to cover the needs to make an energy transition without disrupting the socioeconomic outlook of the coffee-growing country.
