Colombia’s Petro Orders Ecopetrol to Sell $880M US Fracking Assets

President Gustavo Petro has demanded state-run Ecopetrol sell its U.S. fracking operations, redirecting proceeds to renewable energy projects in Colombia.

The directive, issued during a televised cabinet meeting, clashes with Ecopetrol’s newly expanded $880 million partnership with Occidental Petroleum (OXY) to drill 91 wells in Texas’ Permian Basin through 2026.

Petro labeled fracking “the death of nature” and urged investment in solar, wind, and geothermal energy. The Permian operations produced 95,200 barrels of oil daily in 2024—12% of Ecopetrol’s total output—and generated $2.1 billion in 2023 revenue.

These assets offset declining yields in Colombia’s aging oil fields, which have struggled to maintain output. The announcement sparked immediate market reactions. Ecopetrol’s shares initially rose 2% after the OXY deal but dipped as investors assessed political risks.

Analysts warn the move introduces uncertainty, particularly after Ecopetrol’s board lost two independent directors this year. This marks Petro’s second intervention in the company’s U.S. strategy after blocking a $3.6 billion Permian acquisition in 2023.

Energy Minister Andrés Camacho now faces balancing Petro’s climate agenda with Ecopetrol’s contractual obligations. The OXY agreement includes plans for 34 new wells starting in 2025, with drilling rights locked until 2027.

Colombia’s Energy Future

Ecopetrol CEO Ricardo Roa defended the Permian’s “robust infrastructure” in a recent statement, while OXY remained silent on the potential divestment. Colombia’s push comes as oil-dependent regions report a 7.8% GDP drop, intensifying pressure to diversify the economy.

Critics argue fracking risks groundwater contamination and earthquakes, while industry groups caution against abandoning profitable assets. The International Energy Agency estimates Colombia requires $40 billion by 2035 to replace fossil fuel income with renewables.

Ecopetrol’s board has yet to formalize Petro’s order, leaving analysts divided on whether it will sell assets or renegotiate terms. The decision could redefine Colombia’s energy exports, 55% of which rely on oil.

It will also test investor trust in Petro’s market interventions. For policymakers and energy firms, this underscores the tightrope between environmental goals and economic realities in a shifting global market.