Colombian President Gustavo Petro has ordered Ecopetrol to cancel its fracking operations in partnership with Occidental Petroleum in the Permian Basin, reflecting a long-standing opposition to fracking by his administration. The decision aims to redirect finances towards clean energy, but concerns arise regarding Ecopetrol’s future and market implications, indicated by the decline in its share value.
Colombian President Gustavo Petro has directed Ecopetrol to terminate its partnership with U.S.-based Occidental Petroleum over fracking activities in the Permian Basin, a significant oil-producing area across Texas and New Mexico. This directive reflects Petro’s ongoing opposition to fracking, which his administration believes poses environmental hazards.
Petro has actively blocked fracking projects in Colombia and now expands this stance to Ecopetrol’s international operations, advocating for a shift toward renewable energy investments instead. He stated that the funds from the canceled operation should be redirected towards clean energy alternatives.
Recent agreements had extended Ecopetrol’s collaboration with Occidental until June 2026 with a commitment of $880 million to develop 91 oil wells, which accounted for a crucial portion of Ecopetrol’s production. Following Petro’s remarks, shares of Ecopetrol fell significantly, raising concerns about the overall growth strategy of the company, which heavily relied on production from the Permian Basin.
Even though the board approved the agreement extension, uncertainties loom regarding the company’s future in light of Petro’s directives. Analysts believe the potential market value of the Permian assets exceeds $5 billion, indicating substantial financial implications for Ecopetrol under the current climate of disapproval for fracking.
Colombian President Gustavo Petro’s cancelation of Ecopetrol’s fracking operations with Occidental Petroleum highlights a significant policy shift against fracking. This action underscores the administration’s commitment to transitioning towards renewable energy and raises questions about the financial stability and growth strategy of Ecopetrol amid market uncertainties.
Original Source: www.newsbreak.com
