Shearman And Sterling

News November 14, 2019

Ecopetrol and Occidental Close Deal to Form Joint Venture

Shearman & Sterling advised Ecopetrol on its joint venture with Occidental Petroleum Corporation to develop 97,000 net acres in the Permian Basin in west Texas. Ecopetrol will pay $750 million in cash plus $750 million of carried capital in exchange for a 49-percent interest in the new venture. Occidental will own a 51-percent interest and operate the joint venture. The deal closed on November 13, 2019.

The joint venture gives Ecopetrol shares of future production from the development acreage, while also allowing the company to advance its expertise in shale development and ensure technology and knowledge transfer from the Permian Basin to its assets in Colombia. Strategically aligned to Ecopetrol's priorities, the deal also focuses on reserves and production growth, under a strict capital deployment plan.

Ecopetrol is the only vertically-integrated crude oil and natural gas company and the largest company in Colombia as measured by revenue, profit, assets and shareholders’ equity. It is engaged in a broad range of oil and gas-related activities, including exploration and production, refining and petrochemicals, transportation, distribution and marketing and natural gas.

The Shearman & Sterling team below included associate Brianna Lozito and land professional Sajan Abraham.

The Team