Canadian oil producer Frontera Energy announced a new agreement Monday. Its Colombian unit signed a two-year crude oil supply deal. The agreement is with a subsidiary of U.S. oil major Chevron. This commercial pact carries a value up to $120 million.
Agreement Overview
Under this new arrangement, Frontera will receive an initial advance payment of $80 million. Frontera commits a portion of its crude oil production. It will supply this output to Chevron’s unit over the two-year period. This deal strengthens operational ties between the two energy companies.
Financial Structure
The agreement’s financial framework includes a substantial upfront investment. Frontera benefits from an $80 million initial advance. This prepayment supports its operations. The deal value could reach $120 million, reflecting the long-term supply commitment. This structure provides financial stability for Frontera’s Colombian operations.
Supply Commitment
Frontera’s Colombian unit will dedicate a share of its crude oil output to Chevron. This consistent supply ensures a steady flow of resources. The two-year duration establishes a reliable partnership. Both companies anticipate mutual benefits from this collaboration.
Company Context
Frontera Energy operates as a prominent Canadian oil and gas company. It focuses on exploration and production activities. Its Colombian unit plays a crucial role in its portfolio. This agreement highlights Frontera’s ongoing production capabilities in the region. Furthermore, it demonstrates Chevron’s interest in securing diverse crude oil sources.
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