Total Shelves Plan to Acquire Oxy's Ghanaian Assets
French oil super-major Total SA has decided not to complete its previously announced purchase of Occidental Petroleum Corp.’s assets in Ghana, a transaction that had resulted from an agreement that followed Occidental’s acquisition of Anadarko Petroleum Corp. last year.
“Given the extraordinary market environment and the lack of visibility that the Group faces, and in light of the non-operated nature of the interests of Anadarko in Ghana, Total has decided not to pursue the completion of the purchase of the Ghana assets and, as a consequence, to preserve the Group’s financial flexibility”, the French company said in a statement released on Monday.
In May last year, Total and Occidental had entered into an agreement for the sale of Anadarko’s entire African portfolio. The deal included oil & gas assets in Algeria, Ghana, Mozambique and South Africa, and had originally been valued at around US$8.8 billion. The transaction with Total had been conditional on the completion of Occidental’s corporate acquisition of Anadarko, which subsequently closed in August 2020.
Anadarko’s assets in Africa included a 24.5% operated interest in Blocks 404A and 208 located in the Berkine Basin in Algeria. In Ghana, the company held a 27% participating interest in the Jubilee field and 19% in the Tweneboa Enyenra Ntomme (TEN) field. In Mozambique, Anadarko held a 26.5% operated interest in the gas-rich Offshore Area 1 concession and the Mozambique LNG Project with a planned capacity of 12.8 million tonnes per annum (MMtpa). The South African assets comprised of an 80% participating interest in offshore Block 5/6/7 in the southern Orange basin, located close to Total’s recent Brulpadda discovery in the Outeniqua basin.
Subsequently, in late September last year, Total had announced that it had closed the acquisition of Anadarko’s interest in the Mozambique LNG project for a purchase price of US$3.9 billion.
However, in December, Algeria’s national oil company Sonatrach SpA decided to exercise its right of first refusal to acquire Anadarko’s Algerian interests. The decision came after the country’s Minister of Energy declared that the agreement between Total and Occidental was not in accordance with Algerian legislation. The sale of the assets in Ghana had been conditional upon the sale of the Algerian assets.
In late February, Occidental disclosed that it had also closed the sale of Anadarko’s operations in South Africa, for net proceeds of US$332 million.
Occidental had hoped to raise up to US$5 billion through the disposal of the assets in Algeria and Ghana. The company remains under intense pressure to pare debt, especially in light of the recent crash in oil prices that has left the company vulnerable to the excess leverage taken on last year to fund its acquisition of Anadarko.