Colombia Revives Oil And Gas After Four-Year Renewable Energy Push
Tue, August 11, 2026 at 2:00 AM GMT+3 5 min read
Over the past couple of years, Colombia's clean energy transition has shifted into overdrive under President Gustavo Petro's "Just Energy Transition" agenda, with the country pivoting away from fossil fuels towards wind and solar energy. Petro, Colombia's first ever left-wing president, instituted a strict ban on signing new oil, gas and coal exploration contracts while securing multi-billion-dollar international funding partnerships for clean energy projects. This strategy helped Colombia's renewable energy capacity to explode from 200 megawatts (MW) in 2022 to over 4,300 MW by 2026. The solar sector, in particular, enjoyed a major boom under Pedro, with solar energy generation in Colombia officially surpassing coal-fired electricity generation for the first time in history in 2025. Colombia is South America's largest coal producer and its second-largest petroleum and liquid fuels producer, trailing only Brazil.
However, Colombia's fossil fuel sector is about to regain its dominance under the country's newly elected, right-wing leader.
In his inauguration speech in Cali on Friday, Colombia's President Abelardo de la Espriella pledged to revive the nation's oil and gas sector, authorize fracking under strict standards, and restore state-owned energy company Ecopetrol S.A. (NYSE:EC) in an about-face from Petro. According to the new president, Colombia would still pursue an energy transition, but not at the expense of the country's oil and gas industry, "I believe in the energy transition. But that transition must be built from strength, not from weakness, from self-sufficiency and not from dependence," de la Espriella said.
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Ecopetrol, Colombia's national oil company (NOC), faced falling profits and growing government interference during Petro's presidency. Petro repeatedly clashed with management over investment and strategy, disrupting the company's long-term oil and gas expansion plans.
Last year, Petro ordered the termination of a potentially lucrative U.S. Permian Basin joint venture with Occidental Petroleum (NYSE:OXY), claiming fracking represented a huge environmental hazard. Petro previously blocked a $3.6 billion deal to buy a 30% stake in shale producer CrownRock. High-profile board members quit in protest, citing mixed messaging and government resistance to investing capital abroad. Petro's government also replaced hundreds of technical staff with political appointees, while higher income-tax surcharges on hydrocarbons and new corporate wealth levies increased Ecopetrol's tax burden.
Ecopetrol's total transfers to the government, consisting of taxes, royalties, and dividends spiked under Petro to 35 trillion Colombian Pesos (~$11.1 billion) annually, far outpacing the comparative historical windows of prior administrations like Iván Duque and Juan Manuel Santos. Ecopetrol accounts for nearly two-thirds of Colombia's fossil fuel production.
Not surprisingly, Ecopetrol faced sharp profit contractions from its 2022 record highs down through 2025, hitting pandemic-era lows weighed down by heavier local tax burdens, halts on new hydraulic fracturing and exploratory block contracts, and low oil prices. Last year, Ecopetrol's full-year profits dropped nearly 40% to roughly COP 9 trillion (~$2.85 billion), the lowest level since 2017, while revenues dropped 10.2% year-over-year to COP 119.7 trillion (~$38.0 billion).
Petro's anti-fossil fuels policies had far-reaching effects.
According to industry data cited by Reuters, foreign direct investment in the country's mining and oil sectors fell by 34% to approximately $6.9 billion in the 2023-2025 period. Average domestic oil output fell 4% to 746,000 barrels per day; Colombia's total crude oil reserves shrank by 54 million barrels while natural gas imports skyrocketed to 31% of domestic consumption by 2025, up from just 3% in 2023.
Still, de la Espriella is unlikely to dismantle the renewable energy industry that expanded rapidly under Petro. Instead, his government appears set to pursue wind and solar alongside renewed investment in oil and gas, replacing Petro's strategy of phasing out fossil fuels with one that uses Colombia's hydrocarbon resources to support energy security and help finance the country's longer-term energy transition.
Thankfully, Colombia's oil and gas sector is now looking forward to a new dawn. Ecopetrol is executing its 2026 Annual Investment Plan, now being adjusted to align with the new president's expansion mandates. The plan is targeting total investments between COP 22 and 27 trillion (approximately $5.7 billion to $7 billion), with approximately 70% of the budget (around COP 17.2 trillion) dedicated to upstream hydrocarbons, targeting the drilling of up to 430 development wells primarily within Colombia. The company will also allocate 30% of the budget (COP 7.1 trillion) toward power transmission, road infrastructure, and cleaner energy initiatives, with direct renewable energy projects expected to make up only about 3% of this segment as the focus recalibrates heavily toward fossil fuel production. Ecopetrol can now leverage cash flows from its international assets, such as its newly expanded holdings in Brazil independent operators, to reinvest directly back into aggressive hydrocarbon development.
By Alex Kimani for Oilprice.com
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