Colombia’s state-run oil giant, Ecopetrol, is in advanced negotiations with Occidental Petroleum over a potential acquisition of a 30% stake in the U.S. shale oil producer CrownRock. The deal, which could be valued around $3.6 billion, reflects Ecopetrol’s continued expansion into international shale assets despite ongoing domestic controversies surrounding fracking.
Occidental Petroleum, which reached a $12 billion cash-and-stock deal to acquire CrownRock last December, has confirmed the discussions in a recent securities filing. The proposed deal would see Ecopetrol taking a direct 30% interest in CrownRock’s assets. However, if the agreement is not finalized, an alternative arrangement would allow Ecopetrol to acquire an indirect 49% stake through its Rodeo Midland Basin Joint Venture with Occidental.
The potential transaction is subject to further analysis and regulatory approvals, as noted by both companies. Ecopetrol has confirmed its involvement in the talks but has yet to disclose specific details or the anticipated timeline for finalizing the deal.
Occidental’s move to divest some of its newly acquired assets is part of a broader strategy to sell between $4.5 billion and $6 billion worth of assets over the next 18 months. The proceeds from any sale are expected to be used to reduce Occidental’s term loans. This divestiture plan follows Occidental’s substantial acquisition of CrownRock, which included debt as part of the purchase.
Shale oil and gas production remains a contentious issue in Colombia, where President Gustavo Petro’s government is pushing for a ban on fracking, citing environmental concerns. Despite this, Ecopetrol, Colombia’s largest company, is actively involved in U.S. shale operations, particularly in the Permian Basin, demonstrating its commitment to expanding its international footprint.
The outcome of the negotiations will be closely watched, given the significant financial stakes involved and the broader implications for both Ecopetrol’s global strategy and Occidental’s asset management.
