Joaquín Gutiérrez Caballero, who co-managed President Abelardo de la Espriella’s 2026 campaign, took over as chief executive of Ecopetrol (BVC: ECOPETROL; NYSE: EC) on Monday, September 28, four days after the board of Colombia’s majority state-owned oil company chose him unanimously. He replaces Alfonso Camilo Barco Muñoz, who had led the company on an interim basis since September 15.

Infobae reported that the career summary provided for his appointment lists no prior experience in the hydrocarbons sector. President de la Espriella set preserving the hydrocarbons business and replacing reserves as the first of two missions for the company, according to the Office of the President.

Gutiérrez’s Background and Ecopetrol’s Leadership Changes

Gutiérrez holds a business administration degree from the Universidad del Norte in Barranquilla, according to El Tiempo. Ecopetrol’s announcement lists postgraduate specializations in telecommunications project management, telecommunications law and healthcare services management, along with business experience in the legal, healthcare, construction, agriculture and cattle sectors.

El Tiempo reported that he worked as an adviser at the Fiscalía General de la Nación (Attorney General’s Office) under then-Attorney General Mario Iguarán, and that he has worked with de la Espriella since 2005. Infobae dates his arrival at the law firm De La Espriella Lawyers to 2006 and says he served as its deputy manager until 2009. According to Infobae, he also owns a residential developer in Bogotá and has invested in a clinic in Barranquilla, and he co-managed de la Espriella’s presidential campaign alongside Carlos Augusto Suárez Rojas. Ecopetrol’s board elected Suárez as its chairman at a September 17 session, according to El Colombiano. Suárez replaced Luis Felipe Henao Cardona in the chair, and Henao remains on the board.

Ricardo Roa Barragán, who managed former President Gustavo Petro’s 2022 campaign, stepped aside as Ecopetrol’s president in April, first on vacation and then on unpaid leave, according to Infobae, and left the post for good on July 30, as Finance Colombia reported. According to that report, the Attorney General’s Office filed an accusation of tráfico de influencias (influence peddling) against Roa on June 9 and a second accusation over 2022 campaign spending limits on August 12, and Roa has pleaded not guilty in both cases. Juan Carlos Hurtado Parra, who served as interim president during Roa’s absence, resigned and left on September 15 under what Ecopetrol described as a mutually agreed retirement plan, according to El Colombiano. Hurtado’s management had come under scrutiny over a 43-minute audio recording delivered to authorities, which opened a new line of investigation into alleged efforts to influence appointments and contracts at Ecopetrol, El Colombiano reported. The board had named Barco, the company’s corporate vice president of finance and sustainable value, as interim chief executive at a September 14 session.

The same period brought the replacement of five vice presidents and a renewed board approved at an extraordinary shareholders’ meeting on September 15, which seated six new directors and kept three from the previous board, according to El Tiempo. The Colombian government held 88.49% of Ecopetrol’s shares as of September 8, according to a Europa Press report published by Infobae.

Exploration and Fracking Top the Agenda

De la Espriella swore Gutiérrez in on September 25 at the Quinta de San Pedro Alejandrino in Santa Marta, at a ceremony the Office of the President called the Renacer de Ecopetrol (Rebirth of Ecopetrol). According to the Office of the President, de la Espriella said Ecopetrol closed 2025 with 1.944 billion barrels of oil equivalent in proven reserves and a reserve life of 7.8 years, with gas reserves covering 6.3 years. He said his government is reopening exploration and the signing of new contracts, including fracking, and argued that the energy transition must be built on a strong Ecopetrol rather than on its dismantling.

In his own remarks, Gutiérrez named exploration and reserve additions, gas supply, strengthening the hydrocarbons business in all its lines, the reliability of the energy system during climate events, and inherited high-impact tax and legal disputes as his core challenges, El Heraldo reported. He opened his speech with an assessment of the company’s situation.

“I assume the leadership of the most important company in the Republic at a moment of crisis, a turning point where there is no room for half-measures or hesitation.”

— Joaquín Gutiérrez Caballero, chief executive, Ecopetrol

Gutiérrez said the company will pursue conventional and unconventional projects and continue offshore exploration, according to El Colombiano. He gave separate figures for the country’s reserves as a whole: “The country faces a narrow energy horizon, with paltry reserves of just 7.4 years in oil and 5.9 years in gas.” He also said Ecopetrol will seek closer ties with the US government: “We will seek important alliances with the United States government to be included among the countries with favorable conditions for doing business, opening doors that allow us to increase oil and gas reserves.” He announced that Ecopetrol will open an alternate headquarters in Barranquilla.

The company will also undergo a forensic audit to verify allegations of looting, El Heraldo reported. El Tiempo reported that Ecopetrol’s production stood at 745,300 barrels of oil equivalent per day in 2025 and that the company invested about $6.6 billion USD that year.

Ecopetrol said in its September 24 release that the board appointed Gutiérrez on a permanent basis and that the choice followed a selection process run by its Compensation, Nomination and Culture Committee under the company’s succession policy. Suárez was named chairman of that committee at the board’s September 17 session, according to El Colombiano. The company listed Gutiérrez’s priorities as value creation, rigorous and transparent management, and closer engagement with the Colombian state, local communities, investors and employees.

Headline photo: Joaquín Gutiérrez Caballero, who took over as chief executive of Ecopetrol on September 28, 2026. (Photo courtesy Ecopetrol)

Click above to watch the video!

A Narrow Mandate for a Reversal

De la Espriella, a criminal defense attorney who had never previously held elected office, defeated Pacto Histórico (Historic Pact) candidate Iván Cepeda in the June 21, 2026, runoff by fewer than 252,000 votes, 49.65% to 48.70%, according to final results certified by Colombia’s Consejo Nacional Electoral (National Electoral Council, CNE) and reported by Infobae. That margin has already defined his room to govern. His own party, Movimiento de Salvación Nacional (National Salvation Movement), holds just four of the Senate’s 103 seats, while Petro’s Pacto Histórico, now formally in opposition, remains the chamber’s single largest bloc with 26. Reopening hydrocarbon exploration is a decree away; sustaining that policy long enough for it to show up in reserve data will require coalition votes De la Espriella does not automatically command.

An Energy Pledge Built Around Ecopetrol

In his inaugural address, De la Espriella said, “Creo en la transición energética” (“I believe in the energy transition”), but insisted that “esa transición debe erigirse desde la fortaleza y no desde la debilidad, desde la autosuficiencia y no desde la dependencia” — “that transition must be built from strength, not weakness, from self-sufficiency, not dependence” — according to Semana’s coverage of the speech. He called rebuilding Ecopetrol (BVC: ECOPETROL, NYSE: EC) — which he described as the country’s most important company — “a definitive and absolute priority of my government,” saying it had been “treacherously plundered” over the prior four years, according to El Colombiano’s account. He committed to reopening hydrocarbon exploration contracts and authorizing what he called responsible, sustainable fracking under the country’s strictest technical and environmental standards, and he warned that an approaching El Niño weather pattern threatens hydroelectric generation on top of the reserves shortfall.

“That transition must be built from strength, not weakness — from self-sufficiency, not dependence.”

— President Abelardo de la Espriella, inaugural address, August 7, 2026

To carry out that policy, De la Espriella named María Nohemí Arboleda Arango to head the Ministerio de Minas y Energía (Ministry of Mines and Energy). Arboleda spent more than five years as chief executive of XM, the company that operates Colombia’s national power grid and wholesale electricity market, and holds an electrical engineering degree from the Universidad Nacional de Colombia. Her appointment reads as a technical rather than political pick for a ministry that will decide how quickly exploration contracts and fracking permits actually move.

Ecopetrol’s Leadership Purge

Ecopetrol enters the new administration already reeling from the departure of its previous president, Ricardo Roa Barragán, who managed Petro’s 2022 presidential campaign before Petro installed him atop Colombia’s largest company in 2023. Colombia’s Fiscalía General de la Nación (Attorney General’s Office) filed a formal accusation against Roa on June 9, 2026, for tráfico de influencias (influence peddling), alleging he bought a Bogotá penthouse at a favorable price from a company tied to oil and gas investor Serafino Iacono, according to Infobae. In the same case, prosecutors separately allege Roa directed Ecopetrol to favor a company owned by retired police colonel Juan Guillermo Mancera with contracts, after that company made payments benefiting Roa’s circle between March 2023 and February 2024. On August 12, prosecutors filed a second accusation, alleging Roa’s 2022 campaign spending exceeded legal caps by roughly $1.66 billion COP combined across both election rounds, El Heraldo reported. Roa has pleaded not guilty in both cases. “I have already declared myself innocent … in both cases I am under investigation for,” he told Noticias RCN on July 17, according to Infobae’s account of his remarks.

Roa left the presidency of Ecopetrol for good on July 30, 2026, days after briefly returning from leave, in a reshuffle that also removed board member and former board chair Ángela María Robledo Gómez, board member Tatiana Roa Avendaño, and vice presidents Bayron Triana and Victoria Irene Sepúlveda Ballesteros, El Tiempo reported. Juan Carlos Hurtado Parra became acting president; Luis Felipe Henao Cardona became the new board chair. The reshuffle leaves Ecopetrol’s next permanent president to reverse the exploration slowdown while Roa’s criminal cases move through Colombian courts.

Production Keeps Falling

The reshuffle arrived alongside more evidence of the sector’s slide. Colombia’s average oil output fell to 724,910 barrels per day in April 2026, the lowest monthly average so far this year, though still 1.5% above April 2025’s level, according to La República’s reporting on ANH data. Commercialized natural gas output fell more sharply, down 14.2% year-over-year to 694 million cubic feet per day, according to ANH figures reported by El Tiempo. Colombian regulators separately track a broader “fiscalized” production measure that fell even further over the same period — a reminder that the specific gas metric cited changes the size of the number, though not the direction.

Fracking Is Not Actually Banned

De la Espriella has made authorizing fracking a central plank of his energy reversal, but Colombia has no statute prohibiting it. A regulatory framework dating to 2013 and 2014, expanded in 2020 to allow pilot research projects, survived a challenge at the Consejo de Estado (Council of State) in 2022. What actually halted fracking activity was a narrower ruling: Colombia’s Corte Constitucional (Constitutional Court) found in a 2023 decision that regulators had violated the consulta previa (prior consultation) rights of an Afro-descendant community near two pilot wells in Puerto Wilches, and suspended those two projects specifically. Restarting the broader pilot program is therefore largely an executive and administrative matter — issuing new contracts and environmental licenses — rather than one requiring new legislation or a reversal by the Constitutional Court, though any expansion is likely to face the same kind of community-consultation challenges that stopped the Puerto Wilches projects, per Semana’s legal analysis.

What Investors Are Watching

The fiscal stakes are not abstract. Hydrocarbon royalties totaled $29.6 trillion COP over the 40 months between Petro’s August 2022 inauguration and the end of 2025, and the ANH projects that Colombia’s existing proven reserves are worth roughly another $36 trillion COP over their remaining life, per the same IRR 2025 report — a projection that assumes production holds at a reserves-to-production ratio the report’s own data no longer support. De la Espriella inherits a reserve base that would take a decade of sustained investment to rebuild, an LNG import terminal in Cartagena — operated by Sociedad Portuaria El Cayao and branded SPEC LNG — built to buy back gas the country stopped extracting from its own subsoil, and a state oil company that just lost its president to a criminal docket instead of a strategy document. Whether that combination changes is now a question for a president who will have to build, vote by vote, the legislative majority he was not elected with.

Colombia’s June 21 presidential runoff will have a significant bearing on the country’s economic policies and prospects, Fitch Ratings said in a commentary published this week.

In the first round of voting on May 31, right-wing candidate Abelardo de la Espriella — running under the Defensores de la Patria movement — received 43.7% of votes, defeating leftist senator Iván Cepeda of the governing Pacto Histórico, who received 40.9%. Neither candidate reached the absolute majority required to win outright, sending the election to a runoff.

De la Espriella’s stronger-than-expected first-round performance prompted a positive reaction in financial markets, reflecting expectations that he may be better positioned to address Colombia’s macroeconomic challenges that have intensified under outgoing President Gustavo Petro.

The next president will face the challenge of addressing Colombia’s wide fiscal imbalance. The central government deficit reached 6.4% of GDP in 2025, or 7.8% when net of a temporary reduction in interest costs from liability management operations. Fitch estimates that debt stabilization will require a fiscal adjustment equivalent to 4% of GDP. Higher global oil prices are expected to boost revenues via taxes and dividends in 2027, but Fitch cautioned that this support may not last.

“De la Espriella’s stronger-than-expected first-round performance prompted a positive reaction in financial markets, reflecting expectations that he may be better positioned to address Colombia’s macroeconomic challenges.” — Fitch Ratings

De la Espriella has pledged fiscal consolidation through a 40% reduction in the size of the state, while Cepeda has proposed restraining public-sector salaries and benefits. Budget rigidities and spending pressures tied to pensions, healthcare, and subnational transfers will make either adjustment difficult. Both candidates have also proposed higher spending — on defense and social welfare respectively. Capital spending could be trimmed as an adjustment variable, but only to a limited extent, with 2025 outlays of 2.7% of GDP.

The interest bill will be another source of pressure amid a higher local yield curve. Recent liability management operations have replaced lower-coupon bonds with higher-coupon ones, providing an up-front financial benefit while increasing future interest costs.

Given these spending constraints, durable fiscal consolidation is likely to require revenue-side measures. Colombia has a history of tax reforms, but new legislation is far from assured. De la Espriella has pledged to cut taxes, and while Cepeda supports revenue-raising measures, he could face obstacles in advancing reforms through Congress — as Petro’s administration found.

Uncertainties about Colombia’s trend growth persist. The economy expanded at an annual rate of 2.5% in 2019–2025, below the ‘BB’ median and below its own prior average of 3.5%–4%, supported by government transfers, a strong labor market, and minimum wage increases that kept private consumption buoyant at +4.2%. In contrast, investment contracted by an average of 1.6% annually, falling to 16% of GDP from 21%, affected in part by business concerns about the Petro administration’s more interventionist policy stance.

De la Espriella has pledged to boost growth through promotion of hydrocarbon development — including fracking — alongside tax cuts and steps to reduce administrative burdens on businesses. Cepeda has pledged continuity with Petro’s state-led development model, without concrete proposals to revive private investment.

Both agendas face implementation challenges. The next legislature will remain fragmented, requiring negotiation to pass any major legislation. As a political newcomer, de la Espriella could encounter difficulty advancing his program should he win. Social protests are a risk, particularly regarding his plans to cut spending and adopt a tougher security stance.

The election could also influence monetary policy, with implications for financial conditions and thus for public finances and growth. Despite rising inflation, the Banco de la República (Banrep) voted to hold its policy rate at 11.25% after swift prior increases of 200 basis points, amid explicit pressure from the executive branch for looser policy. The elections could influence Banrep’s next steps starting with its June 30 board meeting, and will also determine who fills two vacancies on its seven-member board in 2029.

Fitch’s downgrade of Colombia to ‘BB’/Stable in December 2025 reflected the agency’s view that the starting point for public finances had weakened considerably, and that improvement would take time regardless of the election outcome. Faster-than-expected fiscal adjustment, higher growth, and lower real rates that support debt stabilization could be positive for the rating. A worsening of these variables that steepens the debt trajectory could be negative.

Above image: Fitch Ratings

Though Ecopetrol is listed on the New York Stock Exchange, the Colombian government controls almost 90% of the shares, and the board of directors is dominated by Petro appointees. Gustavo Petro has held an anti-petroleum and anti-mining stance, and is completely opposed to hydraulic fracturing (fracking) technology in the oil and gas industry.

Referring to the joint venture, Petro said during a televised cabinet meeting, “I want that operation to be sold and to invest the money in clean energies…We are against fracking because fracking is the death of nature and the death of humanity.”

With Petro opposed to drilling in Colombia, Ecopetrol’s Texas operations made up over 11% of the company’s production in 2024. Under Petro’s governance, Colombia has gone from being a net exporter to a net importer of natural gas. Last October, Ecopetrol suspended plans to drill its Komodo-1 well in the Caribbean due to Petro’s opposition. Ecopetrol is led by Ricardo Roa (above, right), appointed as Ecopetrol’s CEO after running Petro’s presidential campaign.

Medellín-based utility Empresas Públicas de Medellín (EPM) projected during the 2024 Oil & Gas Congress that retail natural gas prices are predicted to rise 100% during 2025 due to the resulting scarcity.

See also: Petro Administration Announces Natural Gas Rationing in Colombia Despite Abundant Hydrocarbon Resources

Above photo: Colombian President Gustavo Petro (l) with campaign manager & now Ecopetrol CEO Ricardo Roa (resolution enhanced photo: ANH)

Today the government announced the first Coronavirus COVID-19 infection in the tourism-driven city of Cartagena. The patient, an 95 year old American woman arrived on a British operated cruise line. The Interamerican Development Bank this afternoon cancelled their international gathering scheduled for next week in Barranquilla. The annual Feria de las 2 Ruedas held in Medellín’s Plaza Mayor convention center is on for now but has cancelled its pavilion of Chinese exporters.

Colombian airline Avianca (NYSE: AVH), facing trouble on multiple fronts with scandals and operational issues, is down by more than half, to $2.44 at today’s close compared to $5.00 on February 20. The price fell over 17% the last day alone.

All charts in this article from Google

The company was in technical default a year ago, and its offices were raided by Colombian regulators last month. Now, with the pandemic and tourism drop off, passenger load factors are destined to decrease. Also, a large part of the company’s business is done in Colombian pesos, but must pay dollar denominated debt to creditors like United Airlines (NASDAQ: UAL) and Citadel Advisors.

Colombia’s state controlled petroleum company Ecopetrol also trades on the New York Stock Exchange (NYSE: EC). The generally well run company has recently diversified into holdings in Texas and the US gulf coast. Colombia is facing diminishing natural gas reserves even though that gas is in the ground. Hydraulic fracturing is politically controversial and opposition may hinder the company from using unconventional methods to efficiently extract enough resources to service domestic demand, much less export—a traditional source of foreign reserves for the South American country.

On March 9 when Saudi Arabia initiated a petroleum trade war with Russia, prices fell 30% after crude prices fell over the weekend by over 60%, from $51.99 to $34.71 USD (OPEC basket). This destroyed expectations by the Colombian government for dividends it was planning to receive from Ecopetrol. The petroleum company will now find it challenging to maintain positive margin between production costs and crude pricing.

Ecopetrol’s challenges reverberate throughout the Colombian economy. The government depends on petroleum revenues to feed national spending. As the Colombian peso correlates with petroleum, the plunge in oil prices saw a commensurate plunge in the Colombian peso (COP) that now is at record lows against the dollar.

Today, one Colombian peso is only worth 0.026 US cents, so the smallest denomination Colombian coin, a 50 peso piece, is worth 1.3 US cents. The peso has also fallen off a cliff, going from under 3,400 pesos per dollar to over 3,800 pesos per dollar this week—record levels.

Normally, a weak peso increases tourism and demand for Colombian products and services, typically outsourced services such as IT and Customer Contact. This time it may be different though, as tourism has been all but shut down, and recession fears see north American companies, Colombia’s natural market, playing defense.

What’s next?

One bright spot may be Colombia’s mining sector. Gold does well in recessions, and Colombia has an active, growing precious metals mining sector. The unpopular administration of Ivan Duque took a billion dollar special dividend out of Ecopetrol in December to fund political promises and a budget deficit but now the economy’s troubles will likely overcome any effects that short term cash injection may have had.

External factors in the short term will dictate events on the ground. The two external variables are:

1. How long will the OPEC-Russia trade war last?
2. How long and how severe will the Coronavirus pandemic be?

The current president, scandal plagued and with a sub-30% approval rating has two years left in his administration. The impending recession will likely play out the rest of this year, and it is not known what the fallout in 2021 will be.  Colombia has never elected a far-left president, but with a declining economy, political and human rights scandals, it is hard to predict if the president can survive to a second term, and if not, who the alternative might be. In a runoff last election, President Ivan Duque defeated left-wing radical and former revolutionary militant Gustavo Petro, now serving in the Colombian Senate. Petro has defined himself as an enemy of mining and petroleum, and generally anticapitalist.

Ecopetrol has deep enough pockets, credit, government backing and operations to weather the coming uncertainty. The peso may rebound, but will at least stabilize, as the government isn’t printing money or borrowing beyond reason.

Growth may slow; the country is well along in its 4G highway project, but investors are wary of currency risk. The government has backed investments and co-signed to cover a fall in currency, but this will affect public coffers, and now it remains to be seen how the rapidly evolving environment will affect the appetite of foreign institutional investors for Colombian debt.

Avianca? It remains uncertain. How far is United Airlines willing to go to “protect its asset?” Can the airline withstand an almost certain drop in traffic, considering its heavy debt load that it just renegotiated? And with the CEO, Anko Van Der Werff taking steps that may alienate some passengers, when the economy rebounds, will the passengers return?

Time will tell.

Ecopetrol subsidiary Ecopetrol Permian LLC has purchased 49% of the Rodeo Midland Basin LLC entity, a Delaware corporation. In the 1.5 Billion USD deal, Occidental will retain 51% of the entity through its affiliate Occidental Midland Basin LLC. Ecopetrol made a down payment of approximately $876.5 million USD of which $126.5 million correspond to the estimated investment in development of the plan for 2019.

The fields already have two drills in action, and two wells are in final stages of completion. They expect production by the end of 2019 and expect to have 4 wells operating by the end of 2020. This gives Ecopetrol proven reserves of 160 million barrels equivalent at the close of 2019.

Just last week, the British government imposed an immediate ban on hydraulic fracturing nationwide. The country has been rocked by intense anti-fracking protests who have blocked traffic, with protesters chaining themselves to vehicles, even obstructing air transport and public transportation. The trigger for the ban? A “2.9 magnitude tremor” in the English town of Blackpool, near hydraulic fracturing activities by British energy company Cuadrilla.

This article does not seek to take a position on hydraulic fracturing, rather it investigates the way that Active Measures are used to manipulate unwitting civil society groups to achieve policy aims.

For some context, in the past day, the US Geological survey reported 53 natural earthquakes in the US alone, with a 2.5 magnitude or above. The vast majority of these are not even noticed by humans and go unreported in the news. Meanwhile, a study of micro-tremors in Surrey and Sussex, England determined conclusively that they were not caused by hydraulic fracturing, and even had they been, they were too small to present any danger. Still, the media attention has caused UK support for hydraulic fracturing to plunge.

In Ohio, a state in the US Midwest where hydraulic fracturing has taken place for decades, a series of “micro-seismicity” tremors not exceeding 2.2 were detected by scientific sensors, “none of which were reported felt by the public” according to a 2013 article by the Seismological Society of America.

Pungesti is a small, impoverished town in NATO member country Romania. The mayor, Vlasa Mircia thought the town had hit it big when Chevron Petroleum (NYSE: CVX) leased land for shale gas exploration. But soon, anti-fracking activists appeared from other parts of Romania, clashing violently with the police. The mayor was temporarily run out of town.

Recommended reading: Shale Gas U-Turns in Bulgaria and Romania: The Turbulent Politics of Energy and Protest, published in the Journal of European Management & Public Affairs Studies

What is behind the resistance? “Everything that has gone wrong is from Gazprom,” Mayor Mircia told the New York Times. Gazprom, the petroleum giant controlled by the Russian government stands to benefit from European and global dependency on Russian oil and gas exports. The UK relies on gas imports to heat 80% of its housing, so a shock to imports could freeze the country in the winter. Domestic shale gas production would provide a degree of energy independence that the country does not now have. Due largely to hydraulic fracturing, the United States has gone from being a petroleum importer to a petroleum exporter.

Former NATO Secretary General Anders Fogh Rasmussen has been very blunt, and points the finger directly at Vladimir Putin. “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organizations – environmental organizations working against shale gas – to maintain European dependence on imported Russian gas.”

“Russians are behind the protests against Chevron.” — Anca Maria Cernea

For his part, President Putin, former KGB chief, has portrayed himself as an environmentalist. “Fracking poses a huge environmental problem. Places that have allowed it no longer have water coming out of their traps but a blackish slime.” Of course, not only can Putin pump Russian oil as he wishes, with or without hydraulic fracturing, he does not permit the kind of protests and civil disobedience in Russia that he is being accused of fomenting elsewhere to suit his needs.

Curiously, Gazprom subsidiary NIS is exploring for shale gas in Western Romania but unlike Chevron, has faced no protests.

Countries generally won’t go into specifics or “on the record” like Rasmussen did on such allegations because the information is gathered through intelligence networks. However, a NATO official told UK media outlet The Guardian that “Russia has been using a mix of hard and soft power in its attempt to recreate a sphere of influence, including through a campaign of disinformation on many issues, including energy. In general, the potential for Russia using energy supplies as a means of putting pressure on European nations is a matter of concern. No country should use supply and pricing terms as tools of coercion.”

The South American country of Guyana found itself the victim of disinformation in August when Russian Foreign Ministry spokesperson M. V. Zakharova claimed (falsely) that the United Kingdom was constructing a military base in the tropical country, and “there have already arrived several dozen so-called ‘Refugees’ from Venezuela to undergo training as part of reconnaissance and sabotage groups and then to be dispatched to Venezuelan territory in order to destabilize the situation and carry out appropriate actions – from extremist to terrorist.”

Guyana has a once in history opportunity. If it can avoid The Resource Curse discussed in depth in “The Dictator’s Handbook,” it can go from being one of the poorest countries in The Americas to an very high standard of living and long term economic prosperity—or, it can mismanage, squander & steal the proceeds. The choice is clear.

The government of Guyana issued a statement denouncing the slander. Guyana, which sits between Brazil and Russian ally Venezuela has recently discovered a vast petroleum field of high quality light crude oil in its offshore waters. This has prompted the Venezuelan dictatorship to attempt to claim the offshore territory for itself. In 1899 the dispute was settled by arbitration, in 1962, with the prospects of petroleum riches apparent, Venezuela reneged on the agreement and again disputed the territory.

By 1990 relations had improved enough for Venezuela to sponsor Guyana’s 1990 bid to join the Organization of American States, but under Nicolas Maduro’s dictatorship of Venezuela the belligerence has returned. In 2013 the Venezuelan navy seized an oil exploration vessel operating in Guyana’s waters and working on behalf of Anadarko Petroleum (Now part of Occidental Petroleum (NYSE: OXY)). After discovering potentially 5 billion barrels of crude oil in Guyana claimed territory, ExxonMobil is making major investments in the country, and so far, the environmental activists don’t seem to have significantly mobilized.

The Stabroek Block offshore oil field in Guyana is 25% owned by CNOOC-China National Offshore Oil Corporation, 30% by Hess (NYSE: HES), and 45% owned and operated by ExxonMobil.

They may not need to. Venezuelan dictator and Putin supplicant Nicolas Maduro is doing the job for them. Again, in December of last year, the Venezuelan Navy stopped a Bahamian flagged exploration ship contracted to ExxonMobil and working in Guyanese waters, 90 miles from the border. After the Venezuelan navy approached, the ship pulled anchor and fled to international waters.

The US State Department has warned Venezuela that “Guyana has the sovereign right to explore and exploit resources in its territorial waters,” and stated that it was monitoring the situation.

In July, Baltic sea coastal country and former Soviet satellite country Latvia shut down news organization Baltnews.lv. Government censorship? No, the Baltic state and NATO member discovered that Baltnews.lv was an instrument of Russian intelligence. The website was registered to Rossiya Segodnya, controlled by Dmitry Kiselyov, a propagandist directly promoted to his position by Russian President Vladimir Putin. Kiselyov is under restrictive sanction by the European Union for his participation in Active Measures. Rossiya Segodnya is the renamed Radio Comintern from the Soviet Union.

The vast majority of activists are very genuine in support of their causes, whether the environment, a political ideology, animals, social justice, or countless other legitimate issues. However, it is not very difficult for hostile actors, such as governments in this case to coopt these efforts.

Read the official US government final report: The Environmental Protection Agency’s Study of Hydraulic Fracturing and Its Potential Impact on Drinking Water Resources

Romanian activist George Epurescu told the New York Times that his activist group, originally established to fight political corruption, was educated about “the shale gas problem” from Bulgarian activists. Russian-leaning Bulgaria canceled a shale gas license issued to Chevron and banned Fracking in 2012 after protests and organized activism from groups that had not focused previously on environmentalism.

The domestic energy alternative would have been beneficial to Bulgaria, a country that saw industry stop and citizens freeze in the winter of 2009 when Russia cut off its natural gas supply to Ukraine, Eastern and central Europe. With the ban on hydraulic fracturing, Bulgaria remained completely dependent upon Gazprom and Russia for essential natural gas. Recently, Bulgaria has sought to diversify its gas supply, but still remains dependent upon imports.

The Case in Colombia & The US

Colombia continues to discover oil; just last month Ecopetrol announced it struck additional oil in the La Paz Formation that lies under the Santander department, in the east of the country. On the other hand, due to growth in domestic consumption, the country is in danger of becoming a natural gas and oil importer. According to Colombia’s National University, the country will face gas shortages as soon as 2024 without significant changes in projected supply or demand.

As the country improves its standard of living, more and more families are connected to municipal natural gas networks, or cooking with compressed gas, and with the intent of “going green” more and more cars, trucks and buses in Colombia run on natural gas. Without adequate supplies, natural gas will become scarce, prices will skyrocket, and vehicle operators will flee back to diesel and gasoline.

According to the Mnuchin Letter, this is how funds are laundered from foreign governments through intermediaries to unwitting activist groups in foreign countries.

Colombian anti-fracking activists have already mobilized, and as in Bulgaria, appear to be well organized and well-funded. In a politically divided country, it isn’t difficult to gain traction. Former revolutionary militant, mayor of Bogotá, and current senator Gustavo Petro ran unsuccessfully for president of Colombia on an anti-fracking platform.

It can be particularly easy for state actors to encourage and support well-meaning local anti-fracking activists in Colombia because of the country’s historic political polarization. In 2016 The FARC, one group of communist rebels finally agreed to lay down arms after 50 years of armed insurgency. Two separate Marxist groups, the ELN and EPL remain active, and neighboring antagonist Venezuela has also provided material support to Colombian guerillas. It isn’t hard to find someone willing to scream “Imperialismo” at any significant industrial initiative—especially if it involves international companies.

Foreign actors are already jumping in the game. One London based activist group already cries in a 2017 article “A multinational fracking boom has begun in Colombia. New concessions threaten the water supply to the capital city of Bogota.“ though there has been zero hydraulic fracturing to date in Colombia as of 2019, two years after the article was published, and no petroleum company holds any contract to explore for oil in the Páramos, or wetlands near Bogotá. According to Luis Miguel Morelli of Colombia’s National Hydrocarbons Agency (ANH), the government agency is only now in 2019 working with Colombia’s Ministry of Mines and Energy (MME) to  write technical and environmental rules for experimental hydraulic fracturing pilots that they expect to take place late in 2020.

Read here: University of Arizona research says that hydraulic fracturing has less impact on groundwater than traditional oil & gas production.

Apparently the misinformation came from a press release published by “The Colombian Alliance Free From Fracking,” cited in Colombian weekly magazine La Semana. The same article admits “It is necessary to clarify that these areas are delimited unilaterally by the government, that soon would offer them to enterprises interested in developing this activity. Still, up to the moment, no contracts have been signed for exploration or for extraction from the mentioned blocks. Even still, various environmental organizations attached to the Colombian Alliance Free of Fracking have sounded the alarms before what they consider to be a menace for environmental sustainability of the country.”

Download by clicking here the entire 6 page letter from the US Congress exposing detailed specifics on how members of the House Committee on Science, Space and Technology believe the Russian government funneled millions through Klein, Ltd. A Bermuda Shell Company, through a San Francisco conduit entity, then to unwitting environmental activist groups who likely had no idea they were being made pawns of Vladimir Putin in a game of geopolitics against the free world.

Russian money has already allegedly been traced to the Sea Change Foundation based in San Francisco. According to an article in the Washington Examiner, a money trail flows from Russia through a shell company in Bermuda directly to the environmental group, where it then goes to other allied groups through grants such as the Natural Resources Defense Council. The secretive offshore entity Klein Ltd. funneled $23 million USD to the Sea Change Foundation in 2010 and 2011.

US members of the house of representatives Lamar Smith and Eddie Bernice Johnson sent a six-page letter (see graphic, right, with link to download the letter) to Secretary of The Treasury Steven Mnuchin on June 29, 2017 detailing what they call “a concerted effort by foreign entities to funnel millions of dollars through various non-profit entities to influence the U.S. Energy Market.” The letter requests “a full and complete investigation into the allegations raised…If the above allegations are true, Russian entities have funneled money through shell corporations to U.S. environmental activist organizations to influence US energy policy.”

Update: Finance Colombia has received a statement from representatives of the Sea Change Foundation (click here)

An extreme partisan environment in the US may hobble unified, aggressive action in the US to counter Russian efforts, especially less than 2 months away from a presidential election year.

But maybe not. The two major parties might just unite enough to fight back yet, with Democrats bitter about Russian tampering in the 2016 election, and Republicans friendly to US oil interests. Democrats seem to realize there is a problem. “We were even up against phony environmental groups, and I’m a big environmentalist, but these were funded by the Russians to stand against any effort, ‘Oh that pipeline, that fracking, that whatever will be a problem for you,’ and a lot of the money supporting that message was coming from Russia,” said former presidential candidate Hillary Clinton in remarks to a private group, according to an article by The Washington Times.

In a speech to Deutsche Bank, Clinton said “With the new technology known as fracking, we are truly on a path — and it’s not just United States; it’s all of North America — that will be net energy exporters assuming we do it right.” Many criticized Clinton in her failed presidential campaign of saying anything to anybody in order to get elected.

95% of oil and gas wells drilled in the U.S. today are hydraulically fractured, according to the National Petroleum Council.

During a March 6, 2016 debate, Clinton tried to perch upon both sides of the fence, when she said she supports hydraulic fracturing but then she doesn’t “when any state or locality is against it. “So by the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place…And I think that’s the best approach, because right now there are places where fracking is going on that are not sufficiently regulated.”

The Industry Response

The free-world petroleum industry, made up not just of the giant petroleum companies, but thousands of small local service companies and mineral rights holders, and hundreds of thousands of downstream businesses such as gas stations and oil-change shops, has presented no coordinated consistent response so far; not surprising because it is made up of countless different businesses, often with divergent interests. Individual company responses haven’t been much better. No company appears to be taking an aggressive stance to make its case, probably afraid to become a target of the bile and ire of rowdy, sometimes violent protesters.

In Colombia specifically, things are even worse. A coalition of local petroleum industry groups published a series of animated cartoons and infographics on YouTube, apparently directed towards children for their Saturday morning styling, called “La Verdad del Fracking” (The Truth About Fracking). They don’t identify themselves as an organization in their YouTube channel. Every viewer comment on the channel is anti-Fracking and there is no attempt at response or engagement.

2016 Anti-Fracking carnival in San Martín, Cesar

The coalition’s website “La Verdad Del Fracking” isn’t very impressive either. With a cartoon or comic design, it focuses on the economic benefits of hydraulic fracturing to Colombia, which are real, but the site lacks a serious discussion addressing concerns and challenges made by anti-fracking activists. Better than nothing at all perhaps, but it isn’t driving the debate.

Whatever the industry is doing, it is too little, and will soon be too late if they expect to present their case. They would be wise not to make the same grave mistake global mining concern AngloGold Ashanti made when they attempted to enter Colombia and negotiate solely with Bogotá politicians and ignoring the villagers and public opinion. They literally got run out of town.

The activists “own the street” quite literally, from graffiti to protests, to social media, to grassroots one-to-one campaigning on university campuses, and street teams winning over the vast public with no opinion one way or another, one conversation at a time.

Reading the comments on “La Verdad del Fracking’s” Facebook page, it is clear they are losing badly in social media. Every comment is in ridicule of the coalition’s posts, and the page protagonist is a cartoon character. It’s just not serious.

On their coalition Twitter account, in response to this tweet comparing soccer players in Colombia and Argentina (WTF?) one responder replied: “All the ways to defend Fracking and you come out with this silliness? Not this way. Sustain yourselves with questions of Engineering.”

??tiene a Messi✅
??tiene a James✅
??tiene a Fito Paez✅
??tiene a Juanes✅
??tiene autosuficiencia energética✅
??…?❌

¡Hace 10 años?? decidió desarrollar los no convencionales con fracking, esto le permitió pasar de importar recursos a exportarlos! ¿Y ?? por qué no?? pic.twitter.com/gyj72DYRTS

— La Verdad del Fracking (@VerdadFracking) October 2, 2019

As far as the individual companies, most upstream exploration and production enterprises, including Colombia’s state-controlled Ecopetrol (NYSE: EC, BVC: ECO) are silent on their Spanish-language Colombian websites, except for ConocoPhillips (NYSE: COP), which provides a thoughtful argument in support of hydraulic fracturing.

Outside of industry events where executives largely “preach to their choir,” inadequate public engagement is taking place and the companies, singly or in the aggregate, do not currently own the initiative on this issue. A lot more can be done to foster an honest discussion.

Perhaps after such a dialogue, Colombians, Guyanese, Britons, Romanians, Bulgarians and others may still vote no on hydraulic fracturing, but it should be their decision, not Vladimir Putin’s.

2016 Anti-Fracking carnival in San Martín, Cesar photos credit: “Esperanza Próxima” on Flickr, kindly licensed under Creative Commons, Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Headline (front page) photo Image by Fajrul Falah from Pixabay 

The unconventional petroleum and gas extraction method involves injecting water, sand and surfactants (such as detergent) into deep underground shale rock formations to release petroleum and gas trapped within the mineral formations.

“MinEnergía will study the viability of the exploration and production of unconventional deposits. To do this, it will form an independent and multidisciplinary committee of experts that will evaluate and give recommendations. Additionally, the ANH (National Hydrocarbons Agency) will carry out studies led by independent experts to update, deepen and complement the technical knowledge of the exploration and production of these resources, as well as the environmental and social impacts associated with the development of this activity, says the bill.

The proposed legislation mandates that the ANH establishes exploration zones, and ministries of Energy and Environment will update as necessary technical and environmental regulation covering any such exploration and production.

Hydraulic Fracturing is controversial in Colombia, even though to date there has been no hydraulic fracturing in Colombia. During the legislative session, Liberal Party representative Julián Peinado falsely charged that “Fracking caused earthquakes in 8 different states in the United States and has the ability to damage tectonic plates, or to “activate” them. The politician went on to claim that fracking is “toxic chemicals, 75%” attributing his claim to the “Massachusetts Association of Physicians” or as Peinado claimed, the “Asociación de Médicos de Massachusetts.” Even though the US state of Massachusetts “Has no natural gas reserves or production,” according to the US Energy Information Administration.

Peinado’s motion to strike the Fracking provision from the bill was defeated 84 to 25. The bill now goes to the Colombian Senate.

Finance Colombia could not successfully verify the existence of a “Massachusetts Association of Physicians” though there is a Massachusetts Medical Society and a Massachusetts Association of Physician Assistants.

Colombian publication El Colombiano was referred to as a source for this reporting.