Occidental Agrees to Sell Anadarko Assets to Total

Laxman Pai
Monday, May 6, 2019

Texas-headquartered Occidental Petroleum has reached an agreement to sell Anadarko Petroleum's oil and gas assets in Africa to French oil major Total for $8.8 billion.

The binding agreement with Occidental to acquire Anadarko’s assets in Africa (Algeria, Ghana, Mozambique, South Africa) is contingent on a successful completion of Occidental’s ongoing bid for Anadarko.

Wood Mackenzie research director Nicholas Browne says the move would make Total the second largest international oil company (IOC) LNG seller after Shell, and the fourth largest LNG seller after Qatargas, Shell and PETRONAS.

Should Occidental's deal be accepted and be approved by the relevant authorities, it would be expected to close in 2020.

The assets that would be acquired are:
- Algeria: 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud and El Merk fields) in the Berkine basin in which Total already owns 12.25%. These fields represented a gross production of 320 kboe/d in 2018.


- Ghana: 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143 kb/d in 2018,


- Mozambique: 26.5% participating interest and operatorship in Area 1 where a 12.8 million tonne per year LNG project is largely derisked and close to sanction. Area 1 contains more than 60 Tcf of gas resources, of which 18 Tcf will be developed with the first two train project which is expected to come into production by 2024,


- South Africa: exploration licences, close to Total’s recent Brulpadda discovery.

Overall, these assets represent around 1.2 billion boe of 2P reserves, of which 70% is gas, plus 2 billion boe of long term natural gas resources in Mozambique. 2018 equity production was 96 kboe/d and is expected to grow to around 160 kboe/d by 2025.

“If completed, the acquisition of Anadarko by Occidental offers us the opportunity to acquire a world class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent. We have said consistently that our M&A activities will add value by playing to our strengths and focussing on upgrading our portfolio. This is exactly what we would do here," Patrick Pouyanne, Chairman and CEO commented on the announcement.

"We would be able to leverage our expertise in LNG by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner. We would also be able to generate value through adding volumes to our growing LNG portfolio where we are already the 2nd largest private player. We have demonstrated the success of this strategy through the recent acquisitions of Maersk Oil,” he added.

“Total is committed to execute smoothly this transaction, should Occidental be successful in its offer to acquire Anadarko. The proposed transaction is a win/win for Total and Occidental. Total would get access to around over 3 billion boe of resources and Occidental would be able to strengthen its post completion balance sheet by monetising immediately the international assets of Anadarko,” Patrick said.

Despite the capital investment in Mozambique LNG, the acquisition is expected to be free cashflow positive from 2020 even at a Brent price of less than 50 $/b and to generate more than 1 billion $/year of free cashflow from 2025 onwards after start-up of Mozambique LNG.

As a consequence, Total confirms that the previously announced shareholder return policy from 2018 to 2020 will be maintained in terms of dividend increase (10% over 3 years) and share buyback (5 billion dollars).

Categories: People & Company News Legal Mergers & Acquisitions Offshore Energy

Related Stories

Aesen, DOC JV Targets Subsea Cable Logistics

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

China Rolls Out 17MW Floating Wind Turbine Prototype

EnQuest Acquires Harbour Energy’s Vietnamese Assets

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

Fugro Expands Geotechnical Testing Capabilities in Indonesia

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com