Colombia: Omar Camacho, the Controversial New Mines Minister

The cabinet of President Gustavo Petro has not yet been consolidated; with the departure of Irene Vélez, eleven ministers have resigned from his government. Now, to the Ministry of Mines and Energy comes the president of the National Hydrocarbons Agency, Omar Camacho Morales, who is responsible for carrying out the energy transition, but not without a dose of controversy due to his political and ideological positions.

Who is Omar Camacho?

He is an electrical engineer, physicist, and doctor in engineering from the Universidad Distrital Francisco José de Caldas, in addition to having a master's degree in energy management and renewable sources from the Instituto Tecnológico de Estudios Superiores Monterrey. As a professional, he was a legislative advisor and professor at his alma mater. Regarding public positions, his experience is limited to a little more than a month as president of the National Hydrocarbons Agency and his appointment as Minister of Mines and Energy, replacing Irene Vélez.

Like her predecessor, she arrives with the uncertainty caused by her little experience in the public career, which casts doubt on her expertise in the ministry she occupies. There are two metaphysical issues in this portfolio in Gustavo Petro's cabinet: on the one hand, to successfully carry out the energy transition, a primary objective of the current administration. On the other hand, the management of exploration and exploitation contracts in mining and oil mainly which have the entrepreneurs of the sector in constant tension that is reflected in the value of their shares. The closest case is that of Ecopetrol, which is waiting to be able to continue with oil exploration.

Finally, Camacho must face another problem: himself. His affiliations, actions, and statements on "radical" leftist issues, such as Chavismo, Castroism, socialism, guerrilla, and others, have put him in a complicated situation. This has been reinforced especially in front of the business sector, which distrusts his impartiality when making decisions to manage the exploitation of resources in the country. His old tweets in support of Hugo Chávez and Fidel Castro and his candidacy for Comunes, the party that became the political arm of the FARC after the peace process and considered radical left-wing, have returned to public opinion.

The Petro Energy Transition

Former President Iván Duque committed at COP26, held in 2021 in Edinburgh, to reduce greenhouse gas emissions by 51% by 2030. The protection of Colombia's biodiversity and the country's alignment with international efforts to combat climate change drove this agenda, and Petro's government is continuing with the energy transition. During the Duque administration, he was singled out for pushing his agenda without considering indigenous peoples affected by mining and the ravages of guerrilla warfare and environmental and civil society organizations. Omar Camacho's task is to promote the transition to clean energy to produce 8 gigawatts by the end of the government; Colombia currently has only 0.8 gigawatts, barely 10% of this first goal.

Unlike the Duque government, Petro showed a conciliatory interest in the inhabitants of areas with the potential to produce energy, mainly La Guajira, which, according to Petro, can produce up to 20 gigawatts of clean energy. The other pillar of the transition in the Petrista government is a sustainable economic environment concerning Colombia's new energy model, which is yet to be tested by linking companies, value chains, and the inhabitants and small producers who may benefit. In this sense, Camacho's social profile coincides with the Petrista vision due to his knowledge of the population in these conditions. However, his inexperience plays against him; he will face great scrutiny of his actions, especially by the business class, who knows his views on the market, companies, and his relationship with Cuba and Venezuela.

Ecopetrol

Another relevant issue on Camacho's agenda is the case of Ecopetrol; the company is at a crossroads; renewable energies are gaining ground in the country, and with it, the company is losing it. If Colombia is oriented to reduce its energy consumption and expand the use of renewable energies, it will inevitably reduce the size and capacity of Ecopetrol. Oil and coal account for over half of the country's exports, but the transition seems to doom the sector. Ecopetrol has lost a quarter of its stock market value and is pressing for new exploration and exploitation contracts to give it a future growth perspective despite the limitations of the transition. The company affirms that it has reserves equivalent to eight years of production, so exploring new deposits is urgent. With Camacho and Petro in power, it will be challenging to deliver new mining and oil extraction contracts; which worries investors the most; the radical position of the new minister could be an obstacle to negotiating.