Agreement to promote energy transition

Company News, Renewables    Jan 17, 2021 12:26 PM

Ecopetrol (NYSE: EC) and the government announced an agreement to promote energy transition.

The business magazine Dinero said that the goals of the agreement are the construction of research, technological development and innovation capacities for energy transition, carbon capture and its conversion to valuable products, among other objectives.

ECP committed to investing US$30M over the next three years to achieve these goals.

“This agreement responds to our purpose of being the energy that transforms Colombia and is aligned with our 2020 to 2022 business plan,” CEO Felipe Bayón said.

The expert recalled that the energy transition, decarbonization and the efficient use of energy and water are a priority for the Ecopetrol Group.

The NOC expects to close the identified gaps in technology transfer capabilities, thanks to this agreement.

ECP plans to strengthen the capacities of technology companies and develop financial leverage for technology transfer processes.

The agreement’s work plan consists of three phases: construction of ecosystems and capacities for energy transition, closing of gaps for the scaling up of manufacturing processes and the development of a technology transfer pilot.

“We have one of the most important innovation and technology centers in Latin America with more than 30,000m² dedicated to the development of new technologies in oil, gas and alternative energy sources,” Ecopetrol highlighted.

Bottom-Line: Ecopetrol is Colombia’s National Oil Company. So on the one hand, this is yet another example of an oil company looking to diversify its portfolio in the face of long-term trends to reduce dependence on fossil fuels in the energy matrix. On the other hand, ECP really does not have a lot of strategic independence: if the Colombian government orders it to invest its shareholders’ money in renewables, it must do so.

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