Colombia's Ecopetrol extends joint venture agreement with Occidental Petroleum for Permian Basin

Ecopetrol, a Colombian energy firm, announced on Monday that it had reached an agreement with Occidental Petroleum to renew their oil joint venture in the U.S. Permian Basin in Texas.

The future of the joint-venture was uncertain after Ecopetrol – which is majority owned by the Colombian government – backed out from a separate agreement last August, to purchase $3.6 billion worth of assets in the Permian Basin from Occidental, on President Gustavo Petro's orders.

Petro's government has set as a priority the weaning of Andean countries off fossil fuels.

Ecopetrol Permian's CEO Ricardo Roa stated in a press release that with this investment plan, Ecopetrol Permian could drill 91 wells to develop assets within the Midland and Delaware basins in 2025, with an estimated investment of $880 million.

In the statement, it was stated that the agreement for the Midland Sub-basin included the option to extend the contract in the future depending on the macroeconomic conditions, industry environment, and the interest of the two companies.

In the statement, it was noted that the two companies had signed a separate agreement to develop the Delaware Sub-Basin until 2027.

Ecopetrol has seen its production increase significantly since it began operating in the Permian Basin.

Ecopetrol’s third quarter report, published in November last year, shows that the company’s oil and natural gas production in the Permian increased by just over 62%, to 95,200 barrels equivalents per day (boed) during the first nine-month period of 2024. This was despite the fact that the company’s other areas of production decreased.

Roa said that the contract extension and work to follow will allow Ecopetrol's production to reach close to 90,000. He did not specify if this was an addition to existing production. Reporting by Oliver Griffin, Editing by Susan Fenton

(source: Reuters)