Exclusive Q&A: Oxy’s Hollub Pleased with Permian Basin JV

LONDON—Vicki Hollub, president and CEO of Houston-based Occidental Petroleum Corp., spoke briefly with Hart Energy on the sidelines of the Energy Intelligence Forum about her company’s operations in the Permian Basin.

In the Permian Basin, Occidental and Colombia’s state oil company Ecopetrol are jointly developing Oxy’s Midland Basin unproved properties. The pair also have a joint venture (JV) focused on the natural gas potential offshore Colombia’s Caribbean coast.

The Permian Basin venture offers Oxy a way to move development plans in the basin forward while retaining production and cash flow from its existing operations there. The two companies recently agreed to enhance their Midland Basin JV and expand their partnership to cover acres in the Delaware Basin.

“What we’ve been able to do together in the Midland Basin was something I didn’t think we could do. The wells are better than we expected and the development’s been positive for both of us.”—Vicki Hollub , Occidental Petroleum Corp.

In Colombia, Oxy and Ecopetrol plan to jointly participate in exploration activities in four blocks located in deep waters offshore the South American country’s Caribbean Coast. The blocks include COL 1, COL 2, COL 6 and COL 7.

Future activities offshore Colombia will come after two high-profile discoveries already this year which could lead to development of a gas province in the southern Caribbean. Such a development could contribute to supporting Colombia’s energy security and opens the possibility of future gas exports, a fundamental energy source for the energy transition that Ecopetrol has been developing.

What follows are excerpts from Hollub’s short interview.

Pietro D. Pitts: How is your JV with Ecopetrol advancing in the Permian Basin? 

Vicki Hollub: We just expanded the Ecopetrol JV to the Delaware Basin and it’s going really well.

Ecopetrol has been a valued partner for a long time. They’re a company that advances technology. We advance technology, we share. So, this JV has been a benefit to both of us, and we’re continuing to improve it.

But what we’ve been able to do together in the Midland Basin was something I didn’t think we could do. The wells are better than we expected and the development’s been positive for both of us.

PDP: So, it’s been kind of a learning experience for Ecopetrol, a newcomer to the Permian. Do you see yourself being more in a teacher role as Ecopetrol gains experience participating in U.S fracking operations with the idea of transferring that experience and know-how back to Colombia someday? 

VH: I think they’ve learned from the shale, but we learned from Ecopetrol too. That’s why the partnership has been strong because we share and we know that they know things and can do things better than we can. We don’t have an ego in that we’re the best here. We try to work with them to learn from them as they learn from us. So, that’s the reason our work is so well [as] we are sharing with each other and learning from each other.

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PDP: Ecopetrol has announced two successful finds this year offshore Colombia in partnership with Petrobras at the Uchuva-1 well and with Shell Colombia at the Gorgon-2 well. Now Colombian ministry officials and executives with the companies are talking about a new offshore gas province. What’s your view on the discoveries this year and talk about Colombia’s gas potential?

VH: I'm excited about those discoveries. And I think Colombia should be excited, too. I think it’s great… [and] we’re not sure whether our blocks will have oil or gas [but] we originally wanted oil, but now seeing how the gas situation’s playing out in the world… it’s OK either way.