Colombia has elected ex-rebel fighter and former mayor of capital city Bogota, Gustavo Petro as its new president, becoming the country’s first leftist leader to rise to power.
His narrow victory over real-estate mogul Rodolfo Hernandez in a runoff election could represent a blow to investors in the oil and gas sector, as Petro has already expressed plans to halt new hydrocarbon developments and phase out fossil fuels.
Petro, a current senator, won 50.47% of the votes, while Hernandez garnered 47.27%, according to results released by Colombian election authorities.
“Today is a day of celebration for the people. Let them celebrate the first popular victory. May so many sufferings be cushioned in the joy that today floods the heart of the homeland,” Petro tweeted on Sunday night after results came in.
Petro’s election marks a seismic shift for Colombia, and the lurch to the left follows similar victories in 2021 in Peru, Chile and Honduras.
In Brazil, former president Luiz Inacio Lula da Silva is leading the polls against incumbent Jair Bolsonaro ahead of October elections, although Lula’s brand of socialism tends to exalt the virtues of state-controlled Petrobras and leans on the oil industry as a lever for national development.
Petro also made history in another sense in Colombia, as his running mate Francia Marquez, a single mother and former housekeeper, will become the country’s first black woman to hold the position of vice president.
Outgoing conservative president Ivan Duque congratulated Petro after results were announced, and Hernandez quickly conceded his defeat.
Petro pledged during his campaign to fight inequality, carry out pension reforms and seek negotiations with the still-active National Liberation Army (ELN) rebel group.
For the energy sector, Petro campaigned on a radical manifesto promising to transform an economy dependant on oil and coal into one that becomes a regional leader in renewable energy and a positive actor in the battle against climate change.
Petro has said he is against granting new exploration licences and is in favour of banning unconventional oil and gas production outright.
Oil exports are among Colombia’s largest sources of revenue and a shift in policy could potentially impact the country’s coffers.
Petro’s campaign pledges also raise questions about the future role of Colombian state-owned energy company Ecopetrol, which produced about 692,000 barrels of oil equivalent per day in the first quarter of this year.
Petro is expected to bring sweeping management changes to Ecopetrol in an attempt to turn the company into a protagonist of the energy transition.
Colombia’s proven oil reserves reached 2 billion barrels at the end of 2021, enough to last 7.6 years at current levels, while proven gas reserves topped 3.2 trillion cubic feet, enough for eight years, according to the country’s Mines & Energy Ministry.
Petro believes it will take Colombia 12 years to manage the transition to a decarbonised economy-based, which would involve using up remaining oil and gas reserves.
He has made it clear that he will respect existing oil and gas concessions, and refrain from breach of contract.
On the offshore arena, European supermajor Shell and Brazilian oil giant Petrobras are currently drilling the Gorgon-2 and Uchuva-1 wells, respectively.
As for onshore work, Ecopetrol and US-based ExxonMobil are pursuing two pilot fracking projects — Kale and Platero — with drilling earmarked for 2023.
Ecopetrol said it expects to receive the environmental permit for Kale in the new few months. The company is awaiting the public consultation hearing regarding the environmental impact study for Platero.
For the time being, Ecopetrol is sticking to its guns.
“We are convinced of the importance that unconventionals represent for the country’s energy security, and, as such, we will continue pursuing activities related to the pilots, including multiple discussions with local communities and other stakeholders to provide details about the projects’ progress and clarify their concerns,” the company said.