The Colombian president called for a technical and economic study of the option of selling the oil company's stake in the Permian basin.
On Monday, Ecopetrol reported that it had agreed with OXY to extend its Midland development plan in the Permian basin, located in Texas, United States. The contract was established in July 2019 in one of the basins with the largest hydrocarbon reserves and which, according to unions and experts, is key for Colombia. However, President Gustavo Petro questioned on Tuesday that the company is betting on this type of project in his government and even put on the table the sale of the stake, although the extension of the contract has already been made.
"We are against fracking because it is the death of nature and humanity. I want this operation to be sold to invest in clean energy, and for it to be discussed technically and economically," said the president during a cabinet meeting broadcast live from the Casa de Nariño.
According to Ricardo Roa, president of Ecopetrol, with the 2025 investment plan of Ecopetrol Permian for the development of assets in the Midland and Delaware sub-basins, nearly 91 development wells could be drilled, with an investment exceeding US$880 million and which would allow for production of nearly 90,000 barrels of oil equivalent per day.
The state oil company acknowledged in Monday's statement that after five years of operation, Ecopetrol Permian and OXY "have achieved positive operational and financial results, reflected in the growth of production and its contribution to the results of the Ecopetrol Group." If the president's statements affect the development of this business, the corporate governance of the largest company in the country would be called into question.
This topic has a history.
On August 1, Ecopetrol announced that after analysis and evaluation, the company decided not to acquire the stake in the assets of CrownRock, owned by OXY. This decision not to expand fracking operations in the United States generated some doubts in the market about the future of the company and its corporate governance.
On August 30, the company published the letter in which Juan José Echavarría and Luis Alberto Zuleta presented their resignations from their positions as independent members of the board. In the document, they said that in February of this year, the company's business and audit committees unanimously recommended to the board that it advance efforts to acquire between 20 and 30% of the assets of that project, located in the Permian basin of the United States. In May, the board approved by majority to acquire 30% of the project and in July the market was informed that negotiations were moving forward.
According to Echavarría and Zuleta, on July 31, in an informal conversation in Santander during the launch of ICPET, President Gustavo Petro told Ricardo Roa, president of Ecopetrol, and several members of the board that he did not agree with the project, and then the decision was made not to go ahead. For the two directors, the business was key to protecting the future of the company, the largest in the country, and its more than 250,000 shareholders.
In the presentation of the results for the first half of 2024, Roa denied that President Petro had put the “handbrake” on the project and argued that the Ministry of Finance did not endorse the business due to its debt capacity. Amidst statements for and against the decision (more against, to tell the truth), it was questioned whether the board of directors put the future of the company and its shareholders above the president's orders, as it is supposed to be.
