Canadian oil producer Frontera Energy, headquartered in Calgary, has announced a commercial and prepayment agreement with Chevron Products Company, a unit of US-based Chevron Corporation. The agreement commits Frontera’s Colombian subsidiary to supply part of its crude oil production over a two-year period, for a total value of up to $120mn.
Immediate $80mn advance
Under the terms of the deal, Frontera will receive an initial $80mn advance in exchange for future deliveries of crude oil to Chevron. This amount will support the company’s operational cash flow, as it remains active primarily in Colombia and Ecuador. The company also stated it may seek an additional $40mn advance for up to six months on a fully committed basis.
The agreement replaces a previous prepayment facility that is set to expire at the end of January 2026. No specific details were disclosed regarding the exact crude volumes covered or pricing conditions, but the structure of the agreement aims to maintain continuity in cash flow and deliveries between the two companies.
Operational context in Latin America
Frontera Energy focuses its operations on oil-producing regions in Colombia and Ecuador, where it operates several exploration and production blocks. Earlier this year, the company faced a setback in Guyana when the local government cancelled its joint offshore exploration licence with CGX Energy for the Corentyne block.
The conclusion of this agreement with Chevron Products Company strengthens Frontera’s commercial position by securing a stable outlet for a portion of its production. The use of prepayment also provides operational funding leverage without equity dilution.
Stability in contractual relations
This type of arrangement reflects a common strategy among mid-sized hydrocarbon producers seeking to secure liquidity while maintaining exposure to the physical oil market. The renewal of the relationship between Frontera and the Chevron unit suggests ongoing cooperation between the two entities, both logistically and financially.
