Colombian President Orders State-Owned Oil Company to Scrap Joint Venture With US firm Over Fracking Concerns

Colombian President Gustavo Petro on Tuesday ordered state-run oil company Ecopetrol to terminate a joint venture with US-owned Occidental Petroleum (Oxy) that aimed to produce approximately 90,000 barrels of oil per day, The Associated Press reports.

Speaking in a nationally televised address, Petro voiced his opposition to the recent extension of the deal between Ecopetrol and Oxy in the Permian basin, a lucrative oil-producing region spanning Texas and New Mexico. He cited environmental concerns surrounding fracking, the controversial extraction technique used in the project. Fracking has long been criticized by environmental groups for its potential to pollute water sources and trigger tremors.

“I want that operation to be sold, and for the money to be invested in clean energies,” Petro declared during a live-streamed Cabinet meeting. “We are against fracking, because fracking is the death of nature, and the death of humanity.”

Ecopetrol had announced just the day before that it would be renewing its operations with Oxy, investing over $880 million to develop 91 oil wells in the Permian basin. According to Ecopetrol, its Permian basin projects yielded an average of 95,200 barrels of oil per day in the first nine months of the previous year, representing roughly 12% of the company’s total production.

The announcement of the deal initially boosted Ecopetrol’s stock price on Tuesday, with shares rising by 2%. However, they experienced a slight dip following Petro’s call for the agreement’s cancellation. Ecopetrol is controlled by the Colombian government but also trades on the New York Stock Exchange.

While Colombia has consistently refused to authorize fracking projects within its own borders, this marks the first time the government has intervened to prevent Ecopetrol from participating in fracking ventures abroad.