French oil and gas giant Total has signed an agreement with Occidental Petroleum to acquire the African assets of Anadarko Petroleum for $8.8bn.
Under the binding agreement signed by the parties, Total will move ahead with the deal should Occidental Petroleum enter into and complete its $57bn proposal to acquire Anadarko.
Currently, Occidental Petroleum and Anadarko are yet to enter into a definitive agreement for their transaction. Prior to receiving Occidental Petroleum’s bid, Anadarko had signed an agreement with Chevron to be acquired by the latter in a deal valued at $50bn.
However, Anadarko has kept its options open following a higher consideration from Occidental Petroleum.
As per the binding agreement, Total proposes to buy Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa, which put together represent about 1.2 billion boe of 2P reserves.
Total chairman and CEO Patrick Pouyanne said: “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.”
In Algeria, the French energy company will acquire 24.5% stake and operatorship of blocks 404a and 208 in the Berkine basin where it already holds 12.25% stake. Block 208 contains the Hassi Berkine, Ourhoud and El Merk fields, which had a combined gross production of 320 kboe/d in 2018.
In Ghana, Total will acquire 27% stake in the Jubilee field and 19% stake in the TEN fields. Altogether, the Ghanaian fields in the deal had registered 143 kb/d in gross production in 2018.
In Mozambique, the French company will acquire 26.5% stake and operatorship in Area 1 where a 12.8 million ton per year LNG project is expected to begin operations by 2024.
In South Africa, the oil and gas giant will acquire exploration licences, located in proximity to its recent gas and condensate discovery on the Brulpadda prospects in Block 11B/12B in the Outeniqua Basin.
Occidental Petroleum expects the proceeds of the sale of the non-strategic assets in Africa to partly fund its proposed acquisition of Anadarko. The sale also accelerates the company’s divestiture plan to generate the majority of the $10-15bn of planned asset sales.
Occidental president and CEO Vicki Hollub said: “The $8.8 billion value to be received for Africa represents an attractive value based on our extensive evaluation over the last 18 months. Given our long history of working together productively, I am confident we can execute this sale quickly and efficiently.
“Total has extensive experience working in Africa and is well positioned to maximize value from these assets.’’