Oxy continues contract extension negotiations

US company Occidental Petroleum (NYSE: OXY) is "still in discussions" with Colombia's government to extend its production contract on the Cano Limon oilfield, Oxy spokesperson Larry Meriage told BNamericas. At present, the contract expires in 2008. Talks are in their final stages and the parties could reach agreement in "a couple of weeks," Meriage said, while declining to comment on the terms of the extension. Reuters quoted Colombia's energy minister, Luis Ernesto Mejia, as saying Thursday that the government had already extended the contract, but Meriage said the report was unfounded. Mejia said the extension would be formally announced later this month and that the delay in the announcement stems from a disagreement between national hydrocarbons agency ANH and state oil company Ecopetrol. The government is negotiating a similar extension agreement with British oil major BP for its Cusiana-Cupiagua oilfield contract, Mejia said. BP's contract on the Cupiagua block expires in 2010, a BP source told BNamericas, confirming the Reuters report. "Now is the time" for companies to negotiate contract extensions because the current administration favors such moves and "you never know if the next administration will have the same kind of stance," according to one source, who preferred not to be named.