Ecopetrol Board Blasts Anti-Oil President Petro’s Nominees as Unfit

(Bloomberg) -- Board members of Colombia’s state oil company are objecting to President Gustavo Petro’s attempt to overhaul it with new directors as he works to wean the country off fossil fuels.

Ecopetrol SA’s governance committee issued a report Tuesday that said none of the five candidates proposed by Petro — elected in 2022 as Colombia’s first leftist leader — have the experience needed to run the company, according to an internal document seen by Bloomberg News. Representatives of Ecopetrol declined to comment. Petro’s office didn’t immediately respond to a message seeking comment. 

The fight over the future of Ecopetrol — Colombia’s largest company — underscores the rifts that are arising over Petro’s push to eliminate the country’s dependence on fossil fuels, which has major implications for its economy and finances. Petro has refused to sign new exploration contracts even as oil and coal account for about half of Colombia’s exports, and the country is facing a looming shortfall in production of natural gas used to cook and generate power.

Ecopetrol shares have lost 11.3% this year, compared with a 7.3% gain for the country’s Colcap index. The stock is down 0.2% on Thursday. 

Because the government holds a large majority of Ecopetrol’s stock, the new members are expected to be elected at a March 22 shareholder meeting despite the board’s objections.

Petro’s nominees include Deputy Environment Minister Lilia Tatiana Roa, who describes herself in her LinkedIn profile as “supporting community proposals to resist extractivism,” as well as former union head Edwin Palma, whom the board document said may not have the required 12 years of professional experience to be named to the body.

The board document also says nominees Lilia Tatiana Roa and politician Angela Maria Robledo lack the necessary management and industry experience. Gabriel Garcia Realpe, a former senator who backed Petro’s presidential campaign, has legislative expertise but no comparable business management background, the board said. Alvaro Torres, who was proposed by the oil-producing provinces and is close to Ecopetrol Chief Executive Officer Ricardo Roa, may lack the required financial expertise, the report said. 

The new directors threaten to deprive Ecopetrol’s board of some of its accumulated experience and its independence, said Jorge Restrepo, an economics professor at Bogota-based Javeriana University. Having directors who oppose the company’s main business of oil production also presents conflicts of interest, and three of the board nominees’ backgrounds as politicians risks politicizing the company, he said

The concerns over the potential new board members adds to questions over Petro’s appointment of Ricardo Roa as Ecopetrol’s CEO. Colombia’s attorney general is investigating allegations of illicit money going into Petro’s presidential campaign, which Roa managed. 

Earlier this year, Ecopetrol shareholders approved a reduction in the experience needed to become a board member to 12 years, down from 15 years, which was seen as a way to allow Palma to be part of the list. 

The board members that are set to remain on the body are Juan Jose Echavarria, Monica de Greiff, Gonzalo Hernandez and Luis Alberto Zuleta.

(Adds share move in fourth paragraph.)

©2024 Bloomberg L.P.