The board of Colombian oil and gas giant Ecopetrol, which recently partnered with other firms to win two bids for joint exploration projects off the coast of Mexico, has approved the establishment of a subsidiary in Mexico.
The state-controlled firm says that its new arm will have two shareholders. Ecopetrol Global Energy SLU, which is incorporated in Spain, will have a 99% equity interest, while Ecopetrol America Inc., incorporated in the United States, will have the remaining 1% equity stake. Both companies are owned by Ecopetrol S.A.
“This new subsidiary, the sole corporate purpose of which will be the exploration and extraction of hydrocarbons, will be responsible for the subscription and execution of the petroleum contracts in which Ecopetrol participates in Mexico, starting with the recently awarded Blocks 6 and 8,” said Ecopetrol in a statement.
This decision to form a Mexican subsidiary is part of Ecopetrol’s exploration strategy, the firm said. This builds on the two shallow-water blocks in Mexico, Blocks 6 and 8, that the company won the right to explore last month.
As it continues to open up its oil industry, Mexico put 10 holdings up for bidding in June. Ecopetrol will develop one of its new blocks, which has an area of 559 square kilometers, with PC Carigali Mexico, a subsidiary of Malaysian company Petroliam Nasional Berhad (Petronas).
The second block, Area 8, measures 586 square kilometers and will be developed with Mexican state-owned oil company Petróleos Mexicano (Pemex) as a partner. The Mexican government will receive an operating profit of 20.1%.
Photo: Ecopetrol headquarters in Bogotá, Colombia (Credit: Dvalencia)