Colombia's energy landscape is undergoing a dramatic reversal following the inauguration of President Abelardo de la Espriella, who has pledged to restore the nation's oil and gas industry after four years of aggressive renewable energy expansion under his predecessor, Gustavo Petro. The reversal carries significant economic stakes: oil and coal have historically ranked among Colombia's top export products and remain critical sources of government revenue and foreign exchange.

During Petro's tenure, Colombia pursued what he termed a "Just Energy Transition," implementing a strict ban on new oil, gas, and coal exploration contracts while securing multi-billion-dollar international funding partnerships for clean energy projects. As Colombia's first left-wing president, Petro positioned the country as a global leader in climate policy. The strategy yielded measurable results: renewable energy capacity surged from 200 megawatts (MW) in 2022 to over 4,300 MW by 2026. Solar energy generation officially surpassed coal-fired electricity generation for the first time in the country's history in 2025 — a notable milestone for South America's largest coal producer and second-largest petroleum and liquid fuels producer, trailing only Brazil.

However, the political pendulum swung back with the election of de la Espriella, who was inaugurated in Cali on Friday. In his inauguration address, the new right-wing leader committed to revitalizing Colombia's hydrocarbon sector, authorizing hydraulic fracturing under stringent regulatory standards, and restoring the prominence of state-owned energy company Ecopetrol S.A. (NYSE:EC).

"I believe in the energy transition," de la Espriella stated. "But that transition must be built from strength, not from weakness, from self-sufficiency and not from dependence."

Ecopetrol Under Petro: Declining Fortunes and Political Interference

Ecopetrol, Colombia's national oil company (NOC) and the source of nearly two-thirds of the country's fossil fuel production, bore the brunt of Petro's energy policies. As one of the few Latin American national oil companies listed on a major U.S. stock exchange, Ecopetrol's performance is closely tracked by international investors. The president repeatedly clashed with company management over investment strategies and long-term expansion plans.

Last year, Petro ordered the termination of a potentially lucrative U.S. Permian Basin joint venture with Occidental Petroleum (NYSE:OXY), citing environmental concerns over fracking. He had previously blocked a $3.6 billion deal to acquire a 30% stake in shale producer CrownRock. The interventions prompted high-profile board members to resign in protest, citing mixed messaging and government resistance to investing capital abroad. Petro's administration also replaced hundreds of technical staff with political appointees and imposed higher income-tax surcharges on hydrocarbons along with new corporate wealth levies.

The financial consequences were significant. Ecopetrol's total transfers to the government — comprising taxes, royalties, and dividends — spiked to 35 trillion Colombian Pesos (~$11.1 billion) annually under Petro, far exceeding the levels recorded during the administrations of Iván Duque and Juan Manuel Santos.

Profits contracted sharply from 2022 record highs through 2025, reaching pandemic-era lows. Last year, Ecopetrol's full-year profits fell nearly 40% to approximately COP 9 trillion ($2.85 billion), the lowest level since 2017. Revenues declined 10.2% year-over-year to COP 119.7 trillion ($38.0 billion).

Broader Industry Impact

Petro's anti-fossil-fuel policies rippled across Colombia's energy sector. According to industry data cited by Reuters, foreign direct investment in the country's mining and oil sectors fell 34% to approximately $6.9 billion during the 2023–2025 period. Average domestic oil output dropped 4% to 746,000 barrels per day, while total crude oil reserves shrank by 54 million barrels. Natural gas imports surged to 31% of domestic consumption by 2025, up from just 3% in 2023 — a sharp departure for a country that had been largely self-sufficient in natural gas for decades.

A Balanced Path Forward

Despite the policy reversal, de la Espriella is not expected to dismantle the renewable energy infrastructure that expanded rapidly under Petro. Instead, his government appears positioned to pursue wind and solar development alongside renewed investment in oil and gas. The new administration's approach replaces Petro's strategy of phasing out fossil fuels with one that leverages Colombia's hydrocarbon resources to bolster energy security and help finance a longer-term energy transition. The shift also aligns Colombia with a broader regional pattern in which neighboring countries including Brazil and Guyana have been aggressively expanding oil production, even as global energy transition discussions continue.

Ecopetrol is already executing its 2026 Annual Investment Plan, which is being adjusted to align with the new president's expansion mandates. The plan targets total investments between COP 22 and 27 trillion (approximately $5.7 billion to $7 billion). Approximately 70% of the budget — around COP 17.2 trillion — is dedicated to upstream hydrocarbons, with the aim of drilling up to 430 development wells primarily within Colombia.

The remaining 30% (COP 7.1 trillion) is allocated to power transmission, road infrastructure, and cleaner energy initiatives. Direct renewable energy projects are expected to account for only about 3% of this segment, reflecting a significant recalibration toward fossil fuel production. Ecopetrol also intends to leverage cash flows from international assets, including newly expanded holdings in independent Brazilian operators, to reinvest in hydrocarbon development.

By Alex Kimani for Oilprice.com