Ecopetrol says no to buying part of CrownRock from Occidental
Ecopetrol SA leaders have decided against buying a minority stake in the CrownRock LP assets Occidental Petroleum Corp., Houston, is preparing to acquire.
Colombia’s national oil company had the right to take part in Occidental’s roughly $12 billion deal for CrownRock per a joint venture the two firms set up in 2019. Occidental last month disclosed that Ecopetrol officials had indicated an interest in buying 30% of CrownRock in a deal the Houston-based company said would be worth about $3.6 billion (OGJ Online, July 22, 2024). On July 31, the Ecopetrol team said it will not move forward with that plan.
Ecopetrol option
But Ecopetrol could still snap up a sizable stake in CrownRock: The companies’ Rodeo Midland Basin Joint Venture arrangement gives it the option to have that entity acquire all of CrownRock. If Ecopetrol exercises that option—which expires this month—it would end up owning 49% of CrownRock’s assets, which are expected to produce about 170,000 boe/d this year from 94,000 acres in the Permian basin.
In an Aug. 1 filing with the US Securities and Exchange Commission, Occidental said there is no assurance Ecopetrol “can or would exercise such an option.”
Occidental leaders have said the proceeds of any deal for part of CrownRock would be dedicated to paying down some of the company’s debts. In a similar vein, the company earlier this week announced it will sell a portfolio of Delaware basin assets to Permain Resources Corp. for about $818 million and had completed several other sales for about $152 million (OGJ Online, July 29, 2024). The company has committed to sell $4.5-6 billion worth of assets by early 2026.
Shares of Occidental (Ticker: OXY) were down about 3% to $58.85 in midday trading Aug. 1. They are still up slightly from 6 months ago, growing the company’s market capitalization to more than $52 billion.
Geert De Lombaerde | Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.
