Colombian President Gustavo Petro has stirred controversy by demanding that the state-run oil company, Ecopetrol, cancel its joint venture with U.S.-owned Occidental Petroleum (Oxy), a deal that was set to produce about 90,000 barrels of oil per day. Petro justified his decision by citing environmental concerns surrounding fracking, a method of oil extraction that has become a lightning rod for debate.
In a nationally broadcast speech, Petro expressed strong opposition to the extension of Ecopetrol’s agreement with Oxy, stating that the technique of hydraulic fracturing, or fracking, poses a grave environmental threat. “We are against fracking because it is harmful to nature and human life,” Petro declared. He further demanded that the partnership be sold off and that the proceeds be invested in cleaner energy alternatives.
Ecopetrol had recently announced plans to renew its partnership with Occidental Petroleum in the Permian Basin, a major oil-producing region straddling Texas and New Mexico. The deal involved the development of 91 new oil wells, with an expected investment of over $880 million. Ecopetrol’s operations in the Permian Basin counted for about 12% of its total oil production in the previous year, generating around of 95,000 barrels daily in the first nine months of 2024.
Petro’s announcement has sparked a mixed response. While Ecopetrol’s stock rose by 2% following the news of the partnership with Oxy, the president’s call to cancel the agreement caused the stock to dip slightly. This move underscores Colombia’s increasingly strict stance on fracking, with the government having previously blocked fracking projects within the country, although Ecopetrol has been allowed to continue such ventures abroad.
Critics of fracking argue that it can pollute water supplies and trigger seismic activity, raising concerns about its long-term impact on the environment and local communities. However, some view Petro’s move as a setback for global energy partnerships, potentially jeopardizing future investments in Colombia’s oil sector.