Aug 1 (Reuters) - Occidental Petroleum ( OXY ) said on

Thursday that Colombia's Ecopetrol will not buy a stake

in shale oil producer CrownRock after the U.S. company said last

month they were in talks for a potential stake sale.

Last year, Occidental agreed to buy CrownRock in a $12

billion cash-and-stock deal.

State-owned Ecopetrol was in talks to possibly buy a 30%

stake in CrownRock, in a transaction potentially worth $3.6

billion, Occidental said last month in a regulatory filing.

If a deal on the transaction is not reached, "Ecopetrol will

have an option to elect for the Rodeo Midland Basin Joint

Venture to acquire the CrownRock assets," according to the

filing.

The CrownRock deal is adding more debt onto Occidental's

balance sheet and the proceeds from Ecopetrol were expected to

help quickly lower the debt.

Occidental, which had $18 billion in debt at the end of the

first quarter, had reaffirmed in May that it plans to sell about

$4.5 billion to $6 billion of assets within 18 months of closing

the CrownRock purchase.

The CrownRock deal is expected to close by August.

Occidental's shares were down 1.5% at $59.80.