Colombia’s Ecopetrol renews joint venture with Occidental Petroleum in Permian basin

Colombian energy company Ecopetrol said on Monday it has reached an agreement to renew its oil joint venture with Occidental Petroleum in the U.S. Permian basin in Texas.

There had been uncertainty over the future of the joint venture after Ecopetrol, which is majority state owned, backed out of a separate deal last August to acquire $3.6 billion of other assets in the Permian basin from Occidental on the orders of Colombia's President Gustavo Petro.

Petro has made weaning the Andean country away from fossil fuels a key goal of his government.

"With this investment plan in 2025 from Ecopetrol Permian, to develop assets in the Midland and Delaware sub-basins, we could be drilling about 91 development wells, with an investment that exceeds $880 million," Ecopetrol's chief executive Ricardo Roa said in a statement.

The agreement for the Midland sub-basin includes the possibility of extending the contract again in the future, depending on macroeconomic conditions, the industry environment and the two companies' interest, the statement said.

The two companies agreed a separate contract to develop the Delaware sub-basin until 2027, the statement added.

Ecopetrol's operations in the Permian basin have boosted the company's production significantly.

In the first nine months of 2024, the company's oil and gas output in the Permian rose by just under 62% to 95,200 barrels of oil equivalent per day (boed), according to Ecopetrol's third-quarter report published last November, even as the company's production declined elsewhere.

The contract extension and subsequent work will allow Ecopetrol to produce close to 90,000 boed, Roa added, without specifying if that was in addition to already established production.