Colombian state-controlled oil giant Ecopetrol (NYSE: EC) signed an memorandum of understanding with Malaysian state oil company Petronas last week to further their combined exploration efforts in the Americas. While no new projects have been announced, the agreement looks to “consolidate a strategic alliance” that took a step forward this summer.
The two firms have already partnered to look for resources off the coast of Mexico after wining a joint bid in one of the key auctions held by the government in Mexico City since it opened up its sector following a near-century-long national monopoly. That bid was won in June, with the companies formally signing on to explore “Area 6” block on September 25. (Ecopetrol won a second joint bid with Mexican oil company Pemex to jointly explore “Area 8” block.)
The new strategic alliance, which was formalized with a signing by Ecopetrol President Felipe Bayón and the Petronas executive Datuk Mohd Anuar Taib in Bogotá during the Colombian Congress of Oil and Gas, also includes a provision to evaluate possible natural gas projects, including commercial opportunities for the negotiation and sale of both oil and natural gas in the international market.
The agreement also goes beyond working together on exploration. Ecopetrol and the Kuala Lumpur-based Petronas also pledged to share technical information related to extraction, offshore production, petrochemicals, and cost optimization.
In addition, they will exchange best practices on enhanced recovery techniques used to get more resources out of wells, which has been a key focus area for Ecopetrol as it looks to replenish its falling reserves.
Photo: Ecopetrol President Felipe Bayón and the Petronas executive Datuk Mohd Anuar Taib in Bogotá during the Colombian Congress of Oil and Gas. (Credit: Ecopetrol)