Occidental Petroleum Corp. yesterday agreed to sell 50 percent of its oil holdings in eastern Colombia to the Royal Dutch-Shell Group for $950 million in cash.
Occidental is a 50-50 partner with the Colombian government in the eastern oil fields, where the Cano Limon field alone has 1.3 billion barrels of oil reserves. About 600 million barrels of reserves in the field are thought to be easily recoverable.
In New York, Occidental spokesman Philip Wallach said the Los Angeles-based oil company will sell its 50 percent interest in the Colombian oil properties to Shell Petroleum N.V. for $750 million in cash when the deal is closed July 1 and will pay Occidental an additional $200 million in cash.
Shell Petroleum is the holding company for the Royal Dutch-Shell Group, the world's second-largest oil company after Exxon Corp.
The sale by Occidental of its 50 percent stake in 14 wells in Colombia's eastern jungles near Venezuela gives Shell Petroleum 25 percent of the joint Occidental-government reserves in the area.
The Occidental-Shell transaction was announced the same day that Shell was in the final stages of returning control of oil fields in northwest Colombia to the Colombian government.