Ecopetrol, Colombia’s state-owned oil company, is looking to extend its fracking partnership with Occidental Petroleum (OXY) in the U.S. Permian Basin. This collaboration has become a key contributor to Ecopetrol’s production figures. The current agreement is set to expire in March 2025, but negotiations are underway to continue the partnership.
Ricardo Roa, Ecopetrol’s president, confirmed that two options are being considered. The first is to continue the existing joint venture with OXY. The second involves a joint operation agreement if critical conditions arise. Roa expressed optimism about the ongoing talks, stating that negotiations are progressing well.
The Permian Basin has become crucial for Ecopetrol’s production levels. It accounts for 80% to 85% of Ecopetrol Americas’ output, which represents 13.6% of the group’s total production. In the first nine months of 2024, the Permian Basin yielded 95,200 barrels per day, a 61.6% increase from the previous year.
Ecopetrol’s overall production reached 752,000 barrels per day between January and September 2024. This marks a 3% increase compared to the same period in 2023. The Permian Basin played a significant role in this growth, with a 54.8% year-on-year increase in the third quarter alone.
Ecopetrol Seeks to Extend Fracking Partnership with OXY
Experts believe maintaining the partnership is vital for Ecopetrol’s future. Julio César Vera, president of Xua Energy Foundation, suggests that extending the agreement would be best for the company and its shareholders. He emphasizes the need for increased activity to support future results and Ecopetrol’s energy transition strategy.
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The negotiations come amid other developments in Ecopetrol’s fracking operations. The company recently withdrew from the CrownRock acquisition, which would have strengthened its hydraulic fracturing business. This decision, along with the government’s stance on fracking, may influence the ongoing talks with OXY.
As Ecopetrol navigates these challenges, the future of its Permian Basin operations remains a topic of debate. The company must balance its production goals with evolving energy policies and market conditions. The outcome of these negotiations will likely shape Ecopetrol’s strategy in the coming years.
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