Felipe Bayón: “The energy transition is not a destination, it’s a journey”

The executive sees great potential in oil—and also in gas—given the conditions across the continent.

By: RICARDO ÁVILA
Senior Editor, El Tiempo
First published in El Tiempo

At the beginning of last month, Felipe Bayón began a new chapter in his professional career. After a break of just over two years from managerial responsibilities, the former president of Ecopetrol accepted an offer from GeoPark, a mid-sized company whose main operation is in Colombia. EL TIEMPO spoke with him.

Why did you accept this position?

Over the past two years, I’ve done many things, including entrepreneurial activities, external consulting, and long-term national energy issues—looking 10, 15, or 20 years ahead. I was considering a job offer in India when the opportunity at GeoPark came up—a company I’ve always admired. Among independent oil companies in Colombia, it’s one that does things right, operates safely, and has been able to grow.

What else attracted you?

I thought it was a great opportunity to contribute to the industry, and in particular, to protect and enhance GeoPark’s business—to make it more efficient and sustainable over time, and to help it return to a growth path. That challenge is very appealing.

What are the most concrete objectives now that you’re “in the saddle”?

GeoPark already has a defined strategy, and part of what we’re doing now is analyzing opportunities, reviewing the existing portfolio, identifying how to optimize operations, and finding new potential. So the first goal is to strengthen the company’s existing base—just under 30,000 barrels of daily crude oil production—where over the years we’ve achieved very good exploration and efficiency results. That said, the company needs to return to growth, which means we need to refocus.

In this business, you can grow in two ways: organically, with your own assets, or through inorganic acquisitions. We’re looking at the second option, without limiting ourselves geographically, though still focused on this continent. We’re mainly in Colombia, and we’re looking very closely at Argentina and the Vaca Muerta region in particular, including unconventional resources.

A few days ago, you decided to adopt what’s called a “poison pill.” Why?

Coincidentally, that was my first day in the office, and we had a board meeting early that morning. We adopted what’s known as a Shareholders Rights Plan, or a “poison pill.” Its goal is to protect the company because there was an Argentine energy group, called Pampa, that had acquired a significant stake—just over 10%. Shortly after, I met with them in Buenos Aires in a good, respectful, and constructive conversation, where the clear objective was to see what things we could do together. They are an operator with a strong presence in Argentina, and they’re developing gas and oil projects in Vaca Muerta.

How do working conditions for a hydrocarbon company compare between Colombia and other countries in the hemisphere?

I’ve worked across the continent: in Colombia, Venezuela in its time, Argentina, Bolivia, some in Brazil, and some in the U.S. There are subsurface issues, related to geology and potential, and surface issues too. Each country has distinct conditions that must be understood. Colombia—while not an oil country per se, but a country with oil—has an important tradition. It has respected contracts, achieved self-sufficiency, and expanded its refining capacity. It has also developed human capital in this field, with deep expertise. But right now, there is uncertainty. That’s undeniable, and for an investor—especially in this long-term business—certainty is always critical.

You mentioned the interest in Argentina and the Vaca Muerta region. Why?

I’ve already met with the Governor of Neuquén, Rolando Figueroa, and expressed GeoPark’s interest in investing and operating in that province. About 15 to 20 years ago, Argentina lost its self-sufficiency in gas and had to install floating LNG import terminals, which are very expensive. Today, Neuquén is producing nearly 500,000 barrels of oil and about 3 billion cubic feet of gas per day. For reference, that’s more than triple Colombia’s output. They turned the situation around without it becoming a political debate.

They’re attracting major investments…

Just between last year and this year, Neuquén has received $10 billion in investment, thanks to an estimated potential of 16 billion barrels of oil in Vaca Muerta—eight times our reserves. For gas, the ratio is 150 to one. So it’s an enormous potential, and there’s determination to develop it to improve national conditions. That includes using unconventional technologies and fracking, in particular, in a safe way—the same ones that made the U.S. the world’s largest oil and gas producer.

By the way, how closely do you follow what’s happening at Ecopetrol?

I had the honor of being part of the company’s team for seven years, and I’m deeply grateful—both professionally and personally—to the country and to the employees I worked with. Besides being a former employee, I’m also a shareholder of the company and I want it to do well, to grow, to get stronger, to innovate, and to stay at the forefront—as it has been in many areas. I’ve said it many times: if Ecopetrol does well, the country does well. By far, it remains the most relevant company in Colombia. From a fiscal standpoint, in terms of transfers to the regions and its weight in the economy, it’s absolutely critical.

What do you think about the energy transition, in light of recent developments? First, it’s essential to guarantee that there’s enough energy for Colombians to have a better quality of life, mobility, access to education—and even something as basic as food refrigeration. But I’ve noticed that the addition of new energy capacity has been below expectations. We have a relatively clean energy mix because it’s mostly hydro, which is also vulnerable to climate factors. On the renewables front, projects haven’t advanced at the expected pace. In solar, only 10 to 15% of the expected capacity is being added each year. Wind farms are delayed, as are transmission lines.

“Colombia has been a success story in the widespread adoption of gas. Between 50 and 60 percent of cooking gas users are from socioeconomic strata 1 and 2,” says Felipe Bayón, CEO of GeoPark.

And what does that diagnosis tell you?

That each country must decide how it wants to handle the transition. There’s no single recipe, and it has to be a long-term plan, because many of these projects take much longer to build than the length of a government term. Thinking about solar, wind, geothermal, or even nuclear is necessary—but so is understanding that the enemy is not the energy source, but the greenhouse gas emissions. I insist that the transition must be orderly, and it must not worsen people’s living conditions. I believe countries need reliable energy systems adapted to their circumstances.

What risks are we taking by going down the current path?

We’re already facing gas shortages, and Colombia had been a success story in terms of gas expansion. Let’s remember that 50–60% of gas users for cooking are in socioeconomic strata 1 and 2. So the impact could be significant—even if there’s an option to import gas, it would be more expensive. Back to Argentina—they changed their destiny using unconventional resources. We need to develop the fields we already have, both onshore and offshore, though that will take years. The fastest way to address the gas issue in Colombia would be to adopt unconventional techniques. We need to think about this dispassionately.

Accept fracking?

More people are talking about it, including several presidential pre-candidates. I think it’s a matter of necessity and reality. Of course, it needs to be done properly, and I’m convinced it’s possible to develop unconventional resources responsibly—with sound water footprint, CO₂ emissions control, and proper regulation. We can safely harness a resource we already have.

When you talk with others in the industry, what do they say about investment conditions in Colombia?

There’s caution about several issues—for example, access to new exploration areas and the pace of permit approvals. Foreign investors have other options and are closely evaluating the viability of any medium- and long-term initiative.

Have operating conditions become more difficult for you?

Historically, we’ve had good operating methods, including relationships with communities, contractors, and other stakeholders. In general, the security situation is tough in some areas of the country, but I believe this industry has been resilient—able to overcome many obstacles.

Beyond today’s complexities, how optimistic are you about what’s ahead?

I’m optimistic. As I said at the beginning, I could have gone to India under good conditions. But I’m here with a regional responsibility in a company that operates across the continent. I still see tremendous potential—mainly in oil, but also in gas—and there are interesting conditions in many countries across the region. In Colombia, we’ve proven to be resilient, and that makes me look to the future with optimism.

Where do you expect GeoPark to be by the end of this decade?

I envision a company that grows in volume and value generation, with a presence in various geographies. Beyond what I’ve already mentioned, this is a company where all employees are shareholders. I hadn’t seen that anywhere else, and it creates a huge sense of commitment. As people say these days, everyone “steps up their game”—and that will translate into results.

And regarding Colombia’s energy future?

There’s significant work to be done in generation, transmission, and energy distribution—as well as in maintaining hydrocarbon self-sufficiency for as long as these resources remain relevant. There are issues to address, but I believe that in the next decade we’ll build a reliable, robust, and sustainable energy matrix based on one fundamental truth: the transition must be done in an orderly way—not by force.

Put another way, the energy transition is not a destination—it’s a journey. And it’s up to us to walk it wisely.