Petro washed his hands of Ecopetrol’s share price decline: “We need to get out of fossil capital as quickly as possible”

On September 25, 2024, JP Morgan decided to cut the recommendation on Ecopetrol shares from “Neutral” to “Underweight” and set a new target price for its listing in the United States.

Among the reasons, the company cited a challenging operating environment marked by constant blockades by guerrilla groups, difficulties with fuel price increases and a decision by a Colombian refinery not to stake CrownRock assets, which would have allowed it to increase its fracking. operations in a North American country.

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With this decision, the value of Ecopetrol’s share on the Colombian Stock Exchange (BVC) fell by 5.15%.the price of each title increased from 1,940 to 1,840 Colombian pesos.

After the reduction of the target price of the Ecopetrol share, there were several criticisms of the energy policy of the President of the Republic, Gustavo Petr, and the management of Ricardo Roa, the president of the oil company.

Felipe Campos, investment and strategy manager at Alianza Valores, in an interview with Republiche said the measure reflects that Ecopetrol doesn’t have a plan with “upside potential, but rather the possibility of an even bigger drop from current prices.”

For Andrés Duarte, manager of financial analysis at Corficolombiana, there is “a negative impact in the short term and I don’t see compelling reasons for a quick recovery based on the variables considered by JP Morgan,” he told the aforementioned media. .

The head of state posted a photo of himself washing his hands on his X account showing the property collapse, which he says is not a problem that arose during his mandate, but has been happening for years. .

By the way, he accompanied the picture with a strong message in which he assured that “this is a long-term development of the value of Ecopetrol’s shares. Record high oil prices. The oil boom in Colombia in 2013 and the depletion of the fossil model, which I denounced and was part of my campaign statements,” the publication says.

At the same time, Petro said that the decline in the company’s shares over the past 10 years confirms its position in the fight to support the transition to renewable energies such as wind and solar.

“The data confirms my orientation: we need to get off fossil capital and move as quickly as possible to a decarbonized economy where Ecopetrol can play a central role.”

In the same vein, Ricardo Roa, president of Ecopetrol, pointed out that the drop in Ecopetrol’s share price corresponds to a global phenomenon that is not limited to the country. “All the oil companies are down, they’re all recording losses, because of the drop in the price of Brent,” he said in an interview with FM.

In turn, Finance Minister Ricardo Bonilla said that Ecopetrol shares are rising. He also argued that the company was nowhere near a tipping point, as its worst moment was between 2012 and 2015, “when the stock lost 20% of its value,” he said.

The portfolio manager also insisted that stock movements are market and international price issues, so he does not rule out sudden changes in the price of Ecopetrol’s assets, as happened in 2018 and 2019.

That’s why he recalled that “the stock never reached the $5,000 level ($5,850 was its all-time high). It even dropped to $881 and no one was talking about a huge collapse,” he concluded.